Jordan Golson, writing for The Verge:
An acquisition would give Apple a small but significant carmaker that has enormous amounts of technological expertise in building drivetrains, vehicle control systems, and navigating complicated supplier-OEM relationships. McLaren also has significant experience working with advanced materials like carbon composites, aluminum, and carbon fiber.
It’s a small but important firm, best known for its sports cars — it sold 1,654 road cars in 2015 — and its Formula One team. But the company is much more than just a car manufacturer. The 5,000 employees of the McLaren Technology Group work across six different divisions including automotive, racing, marketing, and as an automotive supplier for race teams and high-end performance cars.
McLaren has quietly been growing its consulting division as well. McLaren Applied Technologies works with firms across a number of industries — both automotive and otherwise — to provide R&D and technology expertise behind the scenes. McLaren is privately owned and one of the smallest independent carmakers, making an acquisition logistically simpler.
I am a big fan of McLaren and of Formula One. McLaren represents automotive state of the art, one of the few firms with the technological prowess to compete at the Formula One level, no easy task. Formula One lays out strict regulations for the design of every competing car, and changes those rules every season, requiring competitors to redesign a race car, sometimes from scratch, every year.
On the flip side, McLaren makes and sells vehicles you can buy (if you’ve got the wherewithal) and drive on the street. They’ve got invaluable experience with the automotive supply chain, and they have the kind of industry relationships that an Apple auto effort would benefit from.
I’ve long said supported the notion of Apple buying Formula One, en toto, purely as a brand play and investment. But buying McLaren makes even more sense. They’d have cherry picked just the right player, a rising star in the Formula One world with an old school brand.
No, it wouldn’t
Apple getting into the business of selling cars is totally ridiculous. AAPL is a large part of my portfolio so I hope they don’t get into business of manufacturing / selling cars. Please Apple, don’t do it.
Maybe this is just rumor to boost a car company in need of new sponsors.
Something no one, to my knowledge, has commented on is the fact that McLaren makes the electronic control units for ALL F1 teams. McLaren is uniquely positioned in the bleeding edge hybrid space in addition to their expertise in composite construction. I’m not saying it’ll happen, but I agree that the fit seems much better than most rumors.
It makes as much sense for Apple to get into car making as it did for Apple to make phones. The auto industry of 10 years from now will be as distinct from the current “car” as the current phone business is from that of 10 years ago. Can Apple pull it off? Nobody knows, but the industry is completely ripe for disruption.
While McLaren has said this buyout is not true, there arisesa rumor that Apple will be buying Lit Motors. http://litmotors.com/ I’ve been watching Lit with interest since they began, but they are moving a bit slow (due to funding but also due to the owner getting into a motorcycle accident that nearly killed him — and the tech he is working on probably would have saved or protected him much more).
This would be the dumbest move since the $12,000 gold edition watch. McLaren has zero experience in making a mass produced vehicle. I assume Apple wants to sell more than 2,000 cars a year. Just look at the difficulty Tesla has had going from high-end to mass produced. Tesla is doing it to fund the next phase, Apple doesn’t need to do that to fund it’s way down to the mass market.
Switching McLaren engineers from custom made sports cars to a mass produced vehicle would most likely cause most of them to quit. A few would probably stick around to try some thing new, but i suspect most would be out.
Owning a Formula One car for a company like Apple is mainly about PR, while for McLaren it’s about engineering that will then be used in a few high-end sports car. Apple gets more, and probably better, PR from a single one of it’s Apple Events than a Formula One car would get them.
If Apple is even contemplating making a gas car they’re crazy.
While everyone is talking about dumb moves and all, remember companies approach other companies all the time to discuss possibilities. That’s how they determine if they are a fit, how they could be a fit (buyout or working together or whatever), and whether to bother with it at all.
McLaren has said Apple is not buying them. From the BBC:
“Supercar maker McLaren denies Apple investment report”
http://www.bbc.com/news/business-37435865
The story really is just one word: Nope. The rest is the reporter speculating on everything anyway.
How are you going to get PC performance into a phone? – Everyone before 2007
Well, if you sell enough of anything, the R&D costs become insignificant. And now the iPhone 7 has CPUs rivaling laptops.
In 2014, McLaren made less than $20m, pre-tax. They spent $122m on R&D in 2015.
McLaren couldn’t mass produce cars with their technology if they wanted to, they simply don’t have the capital. Apple has the capital, but not the technology. It seems like a perfect match.
Apple has hired executives from companies mass producing cars (Chrysler, Tesla). That’s not what they want from McLaren. They want tech and relationships.
Also, Formula One is not just internal combustion.
Makes sense for Apple. Not sure what McLaren gets from it. I suspect there really is smoke being seen by some reporters but they’re reading the smoke signals wrong.
Maybe it’s a discussion over patent licensing or technology sharing, or a shared research initiative regarding batteries or body/frame materials.
Maybe McLaren is looking to unload some part of itself. McLaren has their Applied Technologies group, which has a toe in energy and health/wellness sectors.
Maybe McLaren will be a future Apple Watch partner alongside Nike and Hermes. My money was on Ferrari but McLaren would fit.
If you want to understand why this makes sense, here’s two articles you should read:
Wikipedia’s article on McLaren Applied Technologies and this BBC article.
From the article:
It’s important to note that McLaren Technology Group (of which McLaren Applied Technology is a wholly owned subsidiary) and McLaren Automative are completely different companies (MTG has a 3.6% stake in McLaren Automotive). It sounds like the denial came from McLaren Automative, but it makes much more sense that Apple would be trying to buy McLaren Technology Group. None of the reporting makes that distinction clear.
Good call about the tighter development cycles. I hadn’t considered that and (despite the lack of desktop or laptop updates) it’s a given to me Apple would want to emulate it.
There’s definitely a culture fit with the two companies. These companies think the same way about their area of expertise and how it fits within society.
Not sure what McLaren gets from it.
A massive payout. Last year McLaren Technology Group made $27.6m net income. In 2009, 40% of the company sold for about $660m. Apple would pay billions. It would easily be worth twice as much as Beats to Apple, if they are serious about building a car. Not sure Ron Dennis would sell (he’s been busily buying back shares), but if he could retain some leadership role, Apple could probably sell him on their vision.
Mclaren doesn’t mass produce cars because they don’t want to, not because they can’t afford to, they could easily drum up the money for that. You can’t focus on Formula One AND mass market at the same time. Tesla completely dumped the sports car market to make that pivot. Very, very few engineers working at McLaren are going to want to make that pivot.
And I guarantee you apple’s goal is NOT to get mclaren performance in a mass market car. Or even mclaren styling.
There is nothing at McLaren that matches up with what Apple’s goals in the past have been.
Apple will most likely make a few models, target the higher end of the market. Not a sports car targeting the highest end. And that’s what mclaren wants to make.