Apple to buy McLaren (2nd Update)

Zak Brown

UPDATE (GMM) Zak Brown thinks his impact at McLaren can be felt immediately in 2017.

The former F1 sponsorship guru has now left that role to become the new executive at the Woking team, whose founder and long time chief Ron Dennis was ousted amid a shareholder dispute.

"There's trouble between (them)," Brown confirmed to the Financial Times. "It doesn't take a rocket scientist to figure that out. I've deliberately kept my space and know that what all shareholders want are world championships."

He said that title ambition is on track for this decade.

However, he admitted that F1's most successful teams out-spent McLaren-Honda by $100 million in 2016, and that is compounded by a dip in results-based official prize money.

So Brown plans to do what he does best, and find new sponsors.

"I definitely would be shocked if I didn't have some commercial contribution in 2017," the American said.

But amid rumors of a buyout by Apple or a Chinese consortium, Brown played down talk McLaren will be sold.

"That's for the shareholders to decide," he insisted.

"I would not be surprised to be sitting in a McLaren uniform at a grand prix ten years from now."

09/21/16 The earlier claims initially published by the Financial Times and independently backed up by The New York Times claimed that Apple started negotiations to purchase McLaren for between £1 billion and £1.5 billion ($1.3 billion to $2 billion) several months ago, around the time that rumors were circulating about Apple buying McLaren's racing team.

McLaren has since issued a statement, declaring that the company "is not in discussion with Apple in respect of any potential investment" at this time. Apple has declined comment on the matter.

Apple's "Project Titan" was discovered in early 2015. AppleInsider discovered the automotive project was being run out of a top-secret facility in Sunnyvale, Calif. in early 2015.

Project Titan allegedly involved more than 1,000 employees, including existing Apple engineers extracted from other divisions, incorporated with auto industry specialists hired away from other car companies.

In early September, Apple was said to have laid off dozens of workers from the as-yet unannounced Apple Car project. The layoffs were said to be because of a shift away from a bumper-to-bumper plan, with the future Project Titan focus homing in on automotive software like self-driving cars.

09/21/16 Apple is considering buying the British automotive manufacturer McLaren Technology Group, and is currently in talks with the company, according to a new report from Matthew Garrahan and Tim Bradshaw at the Financial Times.

Apple is also bouncing around the idea of a strategic investment as another option, though the FT's sources say an acquisition is also being discussed.

The price for McLaren Technology Group? Between £1 billion ($1.3 billion) and £1.5 billion, according to the report.

McLaren makes supercars, and it runs a British Formula 1 racing team. But it also does a fair amount of research and work with manufacturing processes and data collection and analysis.

Earlier this year, F1 blogger Joe Saward floated the possibility that Apple was laying the groundwork to buy the entire racing series.

F1 was eventually sold to Liberty Media for $8.5 billion, although the deal is not final.

McLaren lost £22.6 million on revenue of £265 million in 2014, the most recent figures that are publicly available, according to the Financial Times.

The news of talks between McLaren and Apple will renew speculation about what products and services the technology company is planning in the automotive industry.

Project Titan

Apple famously has a car department, codenamed "Project Titan," but the company has never confirmed that it is in fact working on an electric car or self-driving software.

Apple has recently focused its attention on self-driving car software instead of on the manufacturing processes that would go into making its own car, according to a slew of reports.

But Apple's core corporate strengths are design, supply chain management, and manufacturing processes, all of which lend strength to the argument that if Apple were to make a car, it would design both the hardware and software, as it does for the iPhone.

An investment or purchase in McLaren would give Apple an injection of racing technology, as well as a team of automotive-focused engineers. McLaren also owns several valuable patents, especially for high-tech materials such as carbon fiber and aluminum. It does manufacturing research and studies materials in its McLaren Applied Technologies group.

McLaren also does substantial work with sensors and data in a department called McLaren Electronic Systems. For example, the company compares real-time data collected during races with historical data, which means that it can solve several problems with dealing with the flood of data that a connected car can generate.

One of the challenges Apple's car project faces is dealing with and analyzing the flood of data generated by its sensor-laden vehicles currently driving around California. Those vehicles can produce 2 GB of data per mile.

Apple has already invested in a transportation company. It invested $1 billion earlier this year in Didi Chuxing, a Chinese ride-hailing company.

"From a Didi point of view, we see that as, one, a great financial investment. Two, we think that there are some strategic things that the companies can do together over time," Apple CEO Tim Cook said in July.