From the Financial Times

Ever since it was revealed that Apple would venture into the automotive industry alongside the likes of other tech giants such Baidu and Alphabet Inc’s Google, much speculation has incessantly surrounded the rumoured iCar, codenamed “Titan”. Is it an electric car that will go head-to-head with Tesla? Will it be fully autonomous? How will Apple even go about developing a car given that it has absolutely zero prior experience in auto?

While Apple has unsurprisingly remained firmly tight-lipped over the details of its secret project thus far,  there certainly hasn’t been any shortage of signs pointing towards the company seeking to revolutionize the automotive industry. First, there was the strategic $1 billion investment in the ride-hailing company, Didi Chuxing, and now Apple is reportedly seeking to acquire the British supercar maker, McLaren Technology Group.  The rumoured $2 billion takeover would no doubt substantially bolster any ambitions that Apple has in store for its iCar.

According to the article, the move would make “perfect sense” for Apple because McLaren – a world-renowned car manufacturer with arguably the most advanced technological expertise – would provide it with “instant credibility” in the auto sector. Similar to its acquisition of Beats in 2014, Apple is likely seeking to tap into McLaren’s top notch engineering team that has previously been responsible for developing industry-leading “lightweight electric motors” and “on-board computer systems”. Such kind of experience would likely take years for Apple to accumulate internally.

From the Verge

However, aside from McLaren’s  extensive patent portfolio and R&D that Apple can integrate, is it really correct to label the potential acquisition as making “perfect sense”? In fact, I personally think its the very opposite. Considering how just a week before Apple’s rumoured interest in McLaren surfaced, it was being reported that Apple was shifting the focus of its car project, the move for McLaren can even be argued to be absurd. Instead of producing its own car, Apple now wants to focus only on providing self-driving technology for existing car makers.

Unless Apple is planning to only serve 1500 – 1600 consumers a year for cars that cost at least $200, 000, there is little reason for Apple to acquire or even purchase a majority stake in McLaren. A much more sensible option for Apple would be to partner with an automaker that will allow its self-driving technology to reach the mass market. For example, Uber has partnered with Volvo to collaborate on autonomous car technology and Microsoft has inked a similar partnership with Toyota.  That way, Apple will be able to take advantage of an already mature mass production supply chain rather than establishing one itself from scratch as it would have to if it acquired McLaren.

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