Miscellaneous Ramblings

Is the Mac the Volkswagen of Computers?

Charles Moore - 2009.02.16 - Tip Jar

As a lifelong car nut, I have a weakness for automotive analogies. The Mac has often being called "the BMW or computers" or "the Porsche of computers" - and sometimes "the Volvo of computers", the latter more in reference to the perceived political preferences and and aesthetic tastes of Apple users being weighted disproportionately toward urban, college-educated liberals.

Apple and Volvo both rate mention on Christian Lander's hilarious Stuff White People Like blogsite, Apple getting a whole dedicated article.

I hasten to add that the reference to "White People" is probably not what you're thinking, rather a gentle but devastatingly witty send-up of the foibles, follies, and fatuousness of (mostly) white, well-educated (so to speak) urban liberals by a Canadian living in Los Angeles. As The Atlantic Monthly's Benjamin Schwartz notes, Lander's "White People aren't always white, and the vast majority of whites aren't White People."

How About Volkswagen?

However, it occurred to me this week, while reading a syndicated review of the new Volkswagen Tiguan crossover/SUV, that Apple might more accurately be called "the Volkswagen of computers".

The article's author, G. Charles Williams, notes that VW has priced the Tiguan substantially higher than its vehicle class competition, between $23,000 and $32,000 as opposed to, for example, the Toyota RAV4 ($,20,500 to $28,000) and the Mitsubishi Outlander ($20,000 to $25,200), and that "Volkswagen says the extra cost of the Tiguan over its competitors is justified because it's intended to be more rugged and durable, and to offer a more exciting driving experience, one of the hallmarks of VW vehicles."

That sort of rationalization of pegging prices higher than the competition has a familiar ring to it!

"However, the downside for VW putting these extra - cost 'qualities' in Volkswagen vehicles, then setting their prices well above the competition," Williams observes, "is a policy that has turned VW into a niche marketer in the United States."

Arguably, it's a strategy that has worked out rather better for Apple than Volkswagen, but Williams' point is valid, and it's questionable how much further above the 10% market share threshold Apple can rise - or in this economy whether they can't even sustain 10% - while keeping its prices well above those of the PC competition.

There are, of course, other interesting VW-Apple parallels. For example, both companies started out with a much more proletarian market focus than they respectively evolved into. Volkswagen translated literally means "people's car", and Apple's early days slogan was "the computer for the rest of us," although it didn't specify what demographic "the rest of us" was referring to.

The iCar

Another Apple/VW connection is that in 2007 Steve Jobs met in California with Volkswagen AG CEO Martin Winterkorn to discus an alliance to produce an Apple-branded (or at least themed) "iCar" automobile to be built by Volkswagen with close integration of the iPod, iPhone, and other Apple products. A VW spokesman told the news agencies at the time that "scores of ideas" were tossed around, and the CEOs planned to hold more meetings. (The images accompanying this article are concepts of what an iCar might have been.)

artist's concept for a possible iCarOf course, VW and many other car makers already offer in-car connections for the iPod, but an integrated design would take the technology to another level.

Sounds cool, but it was a concept fraught with difficult obstacles. A report at the time by California-bases market research firm iSuppli Corporation notes: "While there appears to be strong consumer desire for an iCar, the potential Apple/Volkswagen collaboration faces a set of daunting challenges, and is not likely to yield an actual automobile for three or four years, iSuppli Corp. believes."

could this be an iCar prototype?If ever at all. Sadly, a few weeks later the German magazine Capital reported that discussions between Apple and Volkswagen had failed to result in a joint product-development deal and were over.

The advantages for Apple would be extension of the iPod (and subsequently iPhone) ecosystem into the automotive orbit, while for Volkswagen the iCar had presumer potential to be an iconic hot seller. As iSuppli noted, just the rumors of an iCar generated significant cachet for Volkswagen - so it isn't hard to imagine the amount of interest that would be catalyzed by an actual iCar product introduction.

On the other hand, contradicting my Apple/VW parallels theory, iSuppli argued that a major challenge to the success of a potential Apple/Volkswagen iCar collaboration would be the vastly different cultures of the two corporations.

artist's concept for a possible iCar"Although the old cliché says 'opposites attract,' the cultural divide between Apple and Volkswagen may be too wide to bridge," said Richard Robinson, principal analyst, automotive electronics, for iSuppli.

"Apple is a highly innovative and dynamic consumer electronics company that generates significant profits from living off its wits and supplying niche markets with the next big thing in music players, mobile phones and personal computers. VW, on the other hand, is from an entirely different tradition: the more conservative world of automotive, with its solid four- to five-year development cycles, tight margins and production-standard compliance requirements that would bring even the most enthusiastic designer from Cupertino to his knees."

"Thus, vehicle manufacturers are not interested in the next big thing and instead are focused on producing solid, tried and tested products that will be reliable for years," Robinson noted. "While consumer-electronics warranty returns might eat into a company's profits, automotive recalls are the stuff of nightmares in a car industry that operates at the very margins of profitability."

"If your iPod fails, it's your problem, and you must shell out a meager $120 to buy a new one - which is okay because you probably wanted to get the latest model anyway," Robinson observed. "However, if your two-year-old car's built-in infotainment system fails while driving in 20-below temperatures on an Alaskan highway, it's not your problem - it's a problem for the company that sold you the car and it must bankroll the repairs. Automakers must bear this responsibility throughout a car's entire warranty period, which typically lasts three to five years....

"While Volkswagen would expect a car [it manufactured] to be perfectly serviceable 10 year later, does anyone seriously think the current iPod and iPhone ranges will be anything more than museum relics a decade from now?" Robinson observed.

"This wide variation in business philosophies and dynamics could have major negative repercussions for the iCar," iSuppli concluded.

The VW of Computers

Touché on that point, but I still think Apple could be the Volkswagen of computers within the limitations of a necessarily inexact analogy, or if you prefer, "the Audi, Bentley, Lamborghini or Bugatti of computers" (all Volkswagen brands) if you prefer 0 and for that matter, Porsche recently tool a controlling interest in the VW empire.

And on the other side of the branding crossover equation, a Bentley, Bugatti, or Porsche-themed MacBook Pro in the motif of the very successful Acer Ferrari and Asus Lamborghini PC laptops would be über-cool.

One can always dream, and it still may be a realistic dream from a marketing perspective. Last week a report by Reuters' Bob Burgdorfer noted that according to a Ford Motor Co. study, the 16-to-31 age cohort will constitute the largest class of drivers in the United States by 2010, which is one reason automakers are loading their products with an eclectic array of electronic plug-ins and ports, hoping to stimulate sales and improve the long-term viability of their struggling industry.

When boomers like myself, now in our 50s and 60s, bought our first wheels back in the 1960s and 1970s, we were interested horsepower, wide tires, and dual exhausts, but the so-called Millennial Generation - people born between 1982 and 2000, which includes my kids - is more interested in music and entertainment technology, which would make an Apple iCar a promising enterprise.

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Charles Moore has been a freelance journalist since 1987 and began writing for Mac websites in May 1998. His The Road Warrior column was a regular feature on MacOpinion, he is news editor at Applelinks.com and a columnist at MacPrices.net. If you find his articles helpful, please consider making a donation to his tip jar.

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