Inside the Elon Musk Apple Deal That Tim Cook Regretted Declining

Elon Musk presented Apple with a $5 billion offer in 2022. Even by his own standards, his ambition was lofty. The idea was to give hundreds of millions of users an exclusive route to space-based communication by directly integrating SpaceX’s Starlink satellite connectivity into Apple’s iPhones. Musk gave Apple seventy-two hours. He would take the technology somewhere else if you didn’t accept the offer.

Apple declined, turning away from a potentially game-changing partnership rather than simply walking away from a deal. Tim Cook carefully considered the repercussions and decided not to proceed. He was right. Apple had previously experimented with satellite dreams through Project Eagle, a 2015 partnership with Boeing. However, despite being incredibly inventive at its core, that endeavor was ultimately abandoned. The potential backlash from telecom partners like AT&T and Verizon was not insignificant, and the regulatory pressures were severe.

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Apple discreetly adopted a more cautious strategy in its stead. The outcome was Emergency SOS via satellite, a very obvious feature introduced in collaboration with Globalstar. It made it possible for iPhone users to send distress signals from far away. Although this service was incredibly useful in emergency situations, its reach was much more constrained than Musk’s goal of complete cellular operation from orbit.

Musk reacted as was to be expected, quickly and strategically. He teamed up with T-Mobile just weeks before Apple unveiled the iPhone 14. Together, they unveiled “Starlink Direct to Cell,” a ground-breaking service that would enable regular smartphones to make, receive, and send data calls and texts directly to satellites. Musk’s proposal to Apple was remarkably similar to this one, but it didn’t need Cupertino’s approval this time.

Ironically, if the user had a T-Mobile subscription, iPhones could now use this new satellite feature. Users of Apple were able to access a network that their company had purposefully circumvented through this unexpected backdoor. The result demonstrated how technological competition is layered, with a rejected proposal potentially resurfacing in a form that is remarkably effective.

Elon Musk has perfected this strategy over the last ten years. He turns rejection into dominance by using tactical pivots. It was the same this time. His satellites are orbiting above, silently powering the gadgets of a company that once told him no, now that Starlink is operational across far-flung regions, from Amazonian rainforests to the Himalayan peaks.

Musk’s operational style adds even more complexity to this story. He does more than just sign contracts. He is their embodiment. Musk wrote that he would “walk the line personally” in Samsung’s Texas plant to speed up production after Tesla and Samsung recently reached a $16.5 billion deal to produce AI chips. His “founder mode” is a pattern of behavior rather than a trendy term. During the Model 3 ramp-up, he famously slept on the floor of Tesla’s factory. He is now promising to exercise the same level of caution with Samsung’s factories, which are conveniently located a few miles from his Austin home.

Tim Cook is at the other extreme of the spectrum. He became well-known by subtly controlling Apple’s supply chain. He excels at maximizing complexity rather than opposing it. To guarantee a flawless iPhone delivery, Cook dispatches his lieutenants on redeye flights to Shenzhen and Zhengzhou, while Musk personally negotiates chip yields and satellite ranges. Although both men pay close attention to details, their approaches are very different.

There has been a lot of conjecture lately regarding whether Apple regrets rejecting Musk. After all, they had a major delay in their own satellite venture. In contrast, Starlink has launched over 6,000 satellites and is still growing quickly. Missing the connectivity wave could come at a huge cost to early satellite adopters. Musk’s audacity has paid off in terms of influence as well as alliances. Starlink is currently being used to keep lines of communication open during emergencies from Peru to Ukraine, establishing Musk as a vital component of the world’s infrastructure in addition to being an entrepreneur.

Musk avoided administrative red tape and directly met customer needs by working with T-Mobile rather than Apple. When it comes to extending digital access, Starlink Direct to Cell is a significantly better option than Apple’s constrained emergency capabilities. Additionally, Musk strengthened Starlink’s reputation as a platform that is not restricted by the ecosystem of a single manufacturer by maintaining the technology accessible on any smartphone.

A broader change in the tech sector is revealed by this dynamic. Businesses are now vying for control of the underlying infrastructure rather than creating the greatest product. Musk desires ownership of the sky. Cook is trying to save the earth. Although both approaches are effective, only one of them beams down data from low-Earth orbit at the moment.

Musk has repositioned Starlink as a communications backbone rather than just an internet service by forming strategic alliances and being quick to take action. The stakes are high for Apple. There are rumors that future devices, like the Apple Watch Ultra 3, will have more satellite capabilities. However, it might be much more difficult than anticipated to catch up to Musk’s lead.

The satellite communications industry has the potential to completely upend telecom in the upcoming years, much like streaming did for cable. Apple might improve its emergency features or even make a comeback to the constellation race. However, for the time being, Musk’s satellites are what provide internet access to hikers, climbers, and remote workers.