And You Thought The iPhone 7 Was Expensive

You can see that "cars" and "technology" are two of the biggest tags on my blog, so I'll take ant chance to combine the two. And today I have a great opportunity to do that, with rumours that Apple is planning to buy McLaren, makers of race cars and high-end sports cars.  Later in the day, McLaren shot that down, saying there were no discussions between the two companies.  But they would say that, wouldn't they?

Mainstream business reporters are taking the rumours as further proof that Apple is planning to build a self-driving car. But people more closely following the issue are saying, huh? It had seemed that Apple was determined to go it alone and do everything themselves, however crazy that sounded. A few weeks ago they reorganized their automotive department, with big layoffs. That was taken as evidence that they were scaling-back their automotive ambitions. Partnering with an established car company would seem to be further evidence of this reduction of plans.

My new McLaren

But there's the further question: Why McLaren? After all, this is a company that makes a small number of very expensive cars, so it's hardly the ideal partner to start a technology revolution. The other potentially revolutionary news on the car front is that GM is closer to delivering the Chevy Bolt, an all-electric car. It's going to be competing against Tesla's upcoming Model 3, as the best attempts yet at building practical, reasonably-priced electric cars. So if Apple is serious about competing as an electric car maker, they'll have to compete against a huge company trying to convert to making electric cars, and a small electric car company ramping up to mass-produce cars. So a company that hand-builds cars out of carbon fibre isn't in the best position to compete.

This brings up an interesting point: Back before portable devices made them super cool, Apple was just a company that made computers, and a tiny percentage of computers at that. Whenever Apple execs were asked if they were worried about having such a small share of the market, they responded by drawing an analogy to the car market. They pointed out that Apple's share of the computer market was more than BMW and Mercedes' combined share of the car market. Those two car companies weren't worried about having such a small share, because they were positioned as the luxury manufacturers, and made more money on each unit, much as Apple did on its relatively expensive computers. (And much as it still does on its phones and tablets.) But even applying that analogy doesn't work here. Even if you assume that Apple now wants to take BMW and Mercedes' positions literally as well as figuratively, McLaren still doesn't have the size to do it.

There is another aspect to this that may explain it. As a really dedicated racing fan will know, all Formula One cars have electronics supplied by McLaren, regardless of the car's manufacturer. McLaren actually makes a wide variety of high tech things, so a purchase might not be all about cars. Or at least, not about the manufacture of cars. So I guess it's conceivable that this could make sense, in as much as Apple making a car makes sense.