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With more than $70B in cash, Apple could buy Nokia, RIM, HTC & Motorola

post #1 of 281
Thread Starter 
Apple's cash is expected to top $70 billion at the conclusion of its current fiscal quarter, a sum so massive it could buy out rivals Nokia, Research in Motion, HTC and Motorola Mobility, according to a new analysis.

Collectively, the enterprise values of the four companies that make up 75 percent of all phones sold are $66 billion. And as noted by Horace Dediu in an analysis for Asymco, Apple is likely to have $70 billion in cash when its quarter ends at the end of the month.

The major players left out of the list of four are Sony Ericsson, which has an estimated worth of $3.0 billion, and Samsung, valued at $53 billion. LG's phone business, which has not been profitable the last four quarters, was given a value of $10 billion.

"As market values of phone vendors continue to decline, Apple's cash will continue to grow dramatically," Dediu wrote. "indeed, a time may soon come when Apple's cash will be worth more than the entire phone industry."

In fact, at their current valuations, Apple could acquire every mobile phone vendor with cash alone, except for Samsung.

Apple's growing war chest stems from the fact that the Cupertino, Calif., company is by far the most profitable in both the PC and phone hardware markets. In fact, Apple overtook the market leader, Nokia, in terms of profit in the smartphone business in late 2009, just over two years after the company entered the market with the iPhone.



That lead has steadily grown, with an analysis from Dediu in February showing that Apple's lead over the top mobile phone vendors continues to widen. Since the iPhone appeared, Nokia's profits dropped from an industry-leading $3.5 billion per quarter to $1.3 billion or less.

In the last quarter alone, Apple sold 18.65 million iPhones, a record for the company, with sales growing 113 percent year over year. And even with what was said this January to be a 4 percent share of total mobile phone units sold, Apple takes in more than half of the mobile industry's profits.
post #2 of 281
Or they could manufacture their products in the US and create some jobs.

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post #3 of 281
If Apple didn't buy Sun when they had the change, I don't see them trying to buy anyone else out unless its on the cheap.

Freescale and Nvidia might be good targets. Though Apple already bought a IP from Freescale, so that might rule them out.
Nvidia would give them first dibs at the latest GPU's. I'd like to see Apple acquire ARM Holdings.
post #4 of 281
Nokia and Motorola would give Apple some nice patents.
RIM and HTC would be some what pointless.
post #5 of 281
Quote:
Originally Posted by z3r0 View Post

If Apple didn't buy Sun when they had the change, I don't see them trying to buy anyone else out unless its on the cheap.

Freescale and Nvidia might be good targets. Though Apple already bought a IP from Freescale, so that might rule them out.

I would think they would target Imagination Technologies over nvidia but IIRC they already bought part of them.

I think their next big purchase is going to be Nortel.
After getting beat on Palm and AdMob, there is no way Apple is going to let this one slip through its fingers.

It makes sense for Apple to buy it because they actually make things. Google on the other hand doesn't so not really sure why they would other than to shield Android manufacturers.
post #6 of 281
Apple couldn't because the government(s) involved almost certainly wouldn't allow it--even if Apple was interested.
post #7 of 281
They need to find something to do with that cash.

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post #8 of 281
Quote:
Originally Posted by MJ1970 View Post

They need to find something to do with that cash.

If I were Steve Jobs, I would invest in R&D some more and develop more talents and products.
post #9 of 281
Quote:
Originally Posted by techno View Post

Or they could manufacture their products in the US and create some jobs.

Couldn't agree more. Be a real leader. Being jobs home. Period.

Talk about something you could brag about.

"Jobs bring jobs..." Does a headline get any better than this?
post #10 of 281
This is OT, but where does that $70 billion live? Is it at Bank of America, or multiple banks? Can Jobs walk up to an ATM and withdraw from the Apple account ($300 at a time, of course)? Can he write a check against that $70 billion? If he buys a company, is it an electronic debit? Is there an iMattress?
post #11 of 281
Quote:
Originally Posted by jj.yuan View Post

If I were Steve Jobs, I would invest in R&D some more and develop more talents and products.

That will certainly be part of it...but they've been doing pretty well already on that.

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post #12 of 281
Quote:
Originally Posted by frankie View Post

Couldn't agree more. Be a real leader. Being jobs home. Period.

Apple has created plenty of jobs in the US. Most of them are pretty high-paying, high-tech jobs. This fetish over manufacturing jobs baffles me.

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post #13 of 281
Quote:
Originally Posted by MJ1970 View Post

They need to find something to do with that cash.

Buy Spotify and Twitter and be done with it....

...and buy Messi from Barcelona and give him to Man Utd for free!
post #14 of 281
Quote:
Originally Posted by Cpsro View Post

Apple couldn't because the government(s) involved almost certainly wouldn't allow it--even if Apple was interested.

Of course Apple wouldn't. The whole point of this is to demonstrate exactly how much cash Apple have.
post #15 of 281
Quote:
Originally Posted by macinthe408 View Post

This is OT, but where does that $70 billion live? Is it at Bank of America, or multiple banks?

Probably dozens of banks and various short-term securities (I doubt it's all really cash in a bank account...that's just a short hand way of referring to highly liquid cash-like assets.)

Quote:
Originally Posted by macinthe408 View Post

Can Jobs walk up to an ATM and withdraw from the Apple account ($300 at a time, of course)? Can he write a check against that $70 billion?

Of course not. It's not Steve Jobs' money, it is Apple's money (and, in turn, the shareholder's money).

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post #16 of 281
Quote:
Originally Posted by MJ1970 View Post

They need to find something to do with that cash.

Sometimes I think they're saving up to buy microsoft

More seriously, Apple have such a huge cash pile that they can go develop almost any product conceivable and take the risk of launching it, which has certainly worked well with the iPad. I have no idea what they could do next though, maybe an iOS car? It's hard to think of a profitable consumer market that they can enter.


Quote:
Originally Posted by MJ1970 View Post

Probably dozens of banks and various short-term securities (I doubt it's all really cash in a bank account...that's just a short hand way of referring to highly liquid cash-like assets.)

It's apparently mostly in US T-Bills and short maturity bonds.
post #17 of 281
Buy Microsoft and fire the other Steve!

Quote:
Originally Posted by MJ1970 View Post

They need to find something to do with that cash.
post #18 of 281
Quote:
Originally Posted by cloudgazer View Post

Sometimes I think they're saving up to buy microsoft

More seriously, Apple have such a huge cash pile that they can go develop almost any product conceivable and take the risk of launching it, which has certainly worked well with the iPad. I have no idea what they could do next though, maybe an iOS car? It's hard to think of a profitable consumer market that they can enter.

It is hard to imagine right now.

Camcorders, digital cameras, digital music players, GPS devices and phones all seem to be converging into one device (e.g., iPhone and/or iPod touch.)

Apple is re-inventing personal computing into truly personal computers with iPad and the rest is likely on a long, slow road to death.

There are TVs, but these are becoming commodities it seems and Apple seems intent on making their play just a small device you attach to your TV.

I don't see them seriously getting into the content or phone (service) business.

I think Apple launched their next vector of technology, income and product growth with iCloud. I suspect there will be a lot more to iCloud before all is said and done.

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post #19 of 281
Quote:
Originally Posted by techno View Post

Or they could manufacture their products in the US and create some jobs.


It would also reduce higher skilled jobs because Apple products would get even more expensive, and fewer people would buy them. Apple would then have to lay off people working in the US. It may be a net increase in job creation, but it's questionable whether the US would be better off for it (tax revenue, productivity value, etc)

BTW, there are lots of jobs out there. It's just that people are unwilling to do them. How many unemployed people are willing to be janitors or field workers because it is beneath them, or their skillset is too high?
post #20 of 281
Quote:
Originally Posted by techno View Post

Or they could manufacture their products in the US and create some jobs.

It's a noble sentiment, but can you walk me through how that would work? Would Apple accept a loss on every product sold where now they have a profit, and burn through their cash reserves that way? Or would they raise prices to some kind of breakeven point and lose sales and market share?

It seems like you're basically suggesting that they operate as a charity, accepting losses for social good. If that's what you're after, why all the complexity of moving production and losing money (and tanking the share price)? Why not just suggest they give money away outright?
post #21 of 281
Quote:
Originally Posted by MJ1970 View Post

Apple has created plenty of jobs in the US. Most of them are pretty high-paying, high-tech jobs. This fetish over manufacturing jobs baffles me.

I think the fetish is about having jobs beyond flipping burgers and greeters at Walmart for people that aren't qualified (or capable) for jobs in high-tech or, as our former illustrious leader often liked to speak about, bio-tech. Look at our current trade deficits (some of which looks worse because of accounting practices, but which is still truly horrific), tax-base problems, currency issues, and it makes perfect sense to have a bit of a fetish to actually improve the US economy, particularly when corporate profits are up dramatically in the past decade while real income for workers over the past 20 years has stagnated or fallen.

I understand the 'well, they had to push it overseas because otherwise they couldn't compete', but they happen to have $70 billion in the bank that says they could compete just fine even if they only had $50 billion in the bank as a result.
post #22 of 281
Quote:
Originally Posted by MJ1970 View Post

Apple has created plenty of jobs in the US. Most of them are pretty high-paying, high-tech jobs. This fetish over manufacturing jobs baffles me.

Actually, every successful Apple product creates more jobs overseas than it does in the US. Andy Grove wrote about this 1 year ago and challenged American companies to build in America: http://bit.ly/jB6Sbz
post #23 of 281
Quote:
Originally Posted by z3r0 View Post

[...] I'd like to see Apple acquire ARM Holdings.

Me too z3r0. ARM Holdings' market cap is less than $7.5 billion now. That's a huge amount of money in one sense, considering Apple only paid $278 million for PA Semi. But ARM-based designs are crucial to Apple now (and presumably in the long term) so it's a steal. And $7.5 billion for ARM would be a far better investment than say, $8.5 billion for Skype. (Just couldn't resist that one.)

http://uk.finance.yahoo.com/q?s=ARM.L

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post #24 of 281
Quote:
Originally Posted by BrooksT View Post

It's a noble sentiment, but can you walk me through how that would work? Would Apple accept a loss on every product sold where now they have a profit, and burn through their cash reserves that way? Or would they raise prices to some kind of breakeven point and lose sales and market share?

It seems like you're basically suggesting that they operate as a charity, accepting losses for social good. If that's what you're after, why all the complexity of moving production and losing money (and tanking the share price)? Why not just suggest they give money away outright?

Really? So you figure that manufacturing in the US would have cost them 70 billion over the last decade? I don't have their production costs, but looking at how Jobs set up the NeXT manufacturing, I'm not sure I buy that they'd have to fold up shop and just give away their money. They have huge margins, huge cash reserves, and it's not because they manufacture in China, it's because they make better products.

I buy your argument for commodity manufacturing companies, but that's about the last thing that Apple is or wants to be.
post #25 of 281
You can't create a monopoly by buying out your competitors. All that happens is new competitors enter the market.

I would like to see Apple enter some completely new markets. I think they could use their Apple Store experience + tech knowhow to create a chain of private schools. Or they could move in to medical technology, with an eye to integrating an iOS device with the human body.
post #26 of 281
Quote:
Originally Posted by techno View Post

Or they could manufacture their products in the US and create some jobs.

Why? Do the Americans work harder? or better? or cheaper? Or you want Apple be run like a charity?
post #27 of 281
Apple doesn't need to buy any of those companies because they aren't any threat. It would be a waste of money.

The next step will be creating their own processor architectures or buying Intel.
post #28 of 281
Where other companies fail by concentrating on accusations, Apple is excelling in innovation. There is no need to buy old, tired companies.

Would like to see Apple develop applications so I can dump Adobe i.e. Photoshop and Illustrator.

Microsoft is fragmented. If the PC market continues to dip, Microsoft will fire Balmer.
post #29 of 281
Quote:
Originally Posted by MJ1970 View Post

Apple has created plenty of jobs in the US. Most of them are pretty high-paying, high-tech jobs. This fetish over manufacturing jobs baffles me.

In fact one of the biggest reasons for Apple's turnaround was the Tim Cook's decision to get out of manufacturing.

Apple has indeed created many jobs here in the United States although the majority of the growth in headcount these past few years have been in the retail sales division, not in engineering.
post #30 of 281
Quote:
Originally Posted by mrstep View Post

I think the fetish is about having jobs beyond flipping burgers and greeters at Walmart for people that aren't qualified (or capable) for jobs in high-tech or, as our former illustrious leader often liked to speak about, bio-tech. Look at our current trade deficits (some of which looks worse because of accounting practices, but which is still truly horrific), tax-base problems, currency issues, and it makes perfect sense to have a bit of a fetish to actually improve the US economy, particularly when corporate profits are up dramatically in the past decade while real income for workers over the past 20 years has stagnated or fallen.

I understand the 'well, they had to push it overseas because otherwise they couldn't compete', but they happen to have $70 billion in the bank that says they could compete just fine even if they only had $50 billion in the bank as a result.

If you really want more manufacturing in the US, then lobby for more employment deregulation, including any special legal privileges granted to unions.

But, in the end, this is the dynamic that happens. There are a wide array of jobs in the US that don't fall into the categories of "flipping burgers" (which are entry level jobs for teenagers) and high-tech doctorate jobs in hi-tech and bio-tech. Most of the people I work with are all pretty middle class. We all earn middle class wage and live in middle class homes. None of us manufacture anything. There are also tons of people working in manufacturing in the US, they are just manufacturing much higher value things than the stuff we outsource to places like China and Malaysia.

What we need is for the government to get out of the way of business and the economy will grow and create tons of jobs. But most of these will not be the jobs from yesteryear...and that's probably going to be okay.

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post #31 of 281
If that happened you would see the prices of your favorite Apple products double, unless you can find Americans that will be willing to work 60 hours a week below minimum wage.

Quote:
Originally Posted by techno View Post

Or they could manufacture their products in the US and create some jobs.
post #32 of 281
They should just buy Samsung, fire everyone, and set their corporate headquarters ablaze. Then at the next WWDC, Jobs could show slides onstage and say they'll do the same to any other company that decides to duplicate rather than innovate.
post #33 of 281
Quote:
Originally Posted by Jumpmaster View Post

It would also reduce higher skilled jobs because Apple products would get even more expensive, and fewer people would buy them. Apple would then have to lay off people working in the US. It may be a net increase in job creation, but it's questionable whether the US would be better off for it (tax revenue, productivity value, etc)

BTW, there are lots of jobs out there. It's just that people are unwilling to do them. How many unemployed people are willing to be janitors or field workers because it is beneath them, or their skillset is too high?

Why do you assume the products would get more expensive? You don't think profit margins could be slightly reduced and that the company would be just fine? I'm not singling Apple out here, btw., if you're going to buy a computer it may as well be theirs given that everyone manufactures overseas, but that doesn't mean it wouldn't be nice if the sticker said 'Designed and Manufactured by Apple in the USA'.

As for jobs, maybe because they don't speak Spanish and can't compete with un-insured illegals? I know the summer job I did years ago cleaning pools is likely done by a crew of people here illegally at this point, as seems to be manning the fast-food drive throughs. And that's for people looking for summer / after-school type jobs. And our government has pushed to move higher skilled jobs overseas where possible too.
post #34 of 281
Quote:
Originally Posted by stelligent View Post

Actually, every successful Apple product creates more jobs overseas than it does in the US. Andy Grove wrote about this 1 year ago and challenged American companies to build in America: http://bit.ly/jB6Sbz

Good for those in those other countries! Apple is helping people in those other countries as well as people in the US!

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post #35 of 281
Quote:
Originally Posted by techno View Post

Or they could manufacture their products in the US and create some jobs.

If you think Apple products are expensive now, wait til they're built in the US, with wages 5x or 10x that of China...
post #36 of 281
Quote:
Originally Posted by MJ1970 View Post


What we need is for the government to get out of the way of business and the economy will grow and create tons of jobs. But most of these will not be the jobs from yesteryear...and that's probably going to be okay.

Yeah, let business run wild since they obviously have American's best interests at heart.
post #37 of 281
Quote:
Originally Posted by bdkennedy1 View Post

If that happened you would see the prices of your favorite Apple products double, unless you can find Americans that will be willing to work 60 hours a week below minimum wage.

I'm really curious - how much of the cost of the products is the assembly, and would it really double the price? Are there actual numbers you're referencing to come up with that?
post #38 of 281
Quote:
Originally Posted by guch20 View Post

Yeah, let business run wild since they obviously have American's best interests at heart.

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post #39 of 281
Quote:
Originally Posted by guch20 View Post

Yeah, let business run wild since they obviously have American's best interests at heart.

Exactly. LOL.

Well, actually not a laughing matter given that no multinational company whose primary goal is to boost share prices is out to improve the US. And given the huge amounts of money involved and Supreme Court rulings letting companies buy politicians, it's no shock that we're seeing the massive systemic economic problems that we have.

On the other hand, if our goal is to be a 2nd world or 3rd world debtor nation at some point, we're on a pretty good path.
post #40 of 281
Quote:
Originally Posted by mrstep View Post

Why do you assume the products would get more expensive? You don't think profit margins could be slightly reduced and that the company would be just fine?

That won't happen.

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