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Apple buying small companies every other month but constantly evaluating larger acquisitions

post #1 of 35
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Speaking at Goldman Sachs' Technology and Internet Conference on Tuesday, Apple CEO Tim Cook pointed to the company's "deliberate, thoughtful" mantra as a reason it doesn't typically acquire large companies but admitted it's not opposed to such purchases if the right one comes along.

Tim Cook


Instead, Cook noted how Apple has actively been acquiring smaller companies that it finds as a better fit.

"If you look at the past three years," Cook said, "we've averaged about an acquisition every other month. They're companies where they have really smart people and/or IP. Generally speaking, we've been in many cases taking something they're working on and move the skills to work on something else."

Cook went on to cite the example of Apple's acquisition of PA Semiconductor.

"This was an incredibly skilled group of guys, and they could supplement an incredible group of folks and they were working on PowerPC at the time. We didn't have an interest in that, so we moved the skills to work on our iPhone and other engines. We will do more of those."

As to large companies, Cook said the company's patient and deliberate approach to acquisitions typically precluded such purchases, despite Apple's cash holdings in excess of $125 billion.

"We have looked at large companies. In each case, it didn't pass our test. Will we look at more? I think so. But we're disciplined and thoughtful, and we don't feel a pressure to go out and acquire revenue. We want to make great products. If a large company could help us, then that would be of interest. But, again: Deliberate, thoughtful is our mantra."
post #2 of 35

"Deliberate, thoughtful" is our mantra. 

 

LOVE hearing this. 

 

It was Steve's as well.

post #3 of 35
Quote:
Originally Posted by AppleInsider View Post

Deliberate, thoughtful is our mantra.

 

As opposed to, "Gosh, I just bought Motorola for $12.5 Billion. No idea what we'll do with it, but, hey, I couldn't stop myself."

post #4 of 35

I hope you're going to report on the other things Cook talked about, including his initial slam on Greenlight. What I find remarkable is that Cook and Apple continue to push support for their customers above all else. They want to provide products and all the garbage supposed investors are spewing is being pushed to the side, as it should be. I support Apple by buying their products and helping others who do as well. I do not support the fanatic stock market or any of those insane people who feel Apple owes them money because they trade. Apple doesn't need that money, they have enough of their own and the people who buy Apple products gave Apple that money. No investment fund ever helped Apple sell anything or provide Apple with any money to sell.

 

I don't own any Apple stock but I'm definitely long on Apple.

post #5 of 35

Sounds very reasonable to me on the big acquisition front.

 

On the small company front, with what Cook says they are doing, I am wondering how long the lockup period for key employees to stay on board?

 

I also hope they discuss with the company what plans they have for them. It would be a terrible shock to get bought for doing one thing and then find out you are going to be doing something else. I would think that is something that Apple would have to do in order to keep the new employees happy. 

 

While this thoughtful approach is a good one to take, it may also lead to some companies slipping away. I remember about 2 years ago, Apple was in some preliminary talks with the company that had the Kinect technology that eventually got bought out by MSFT. You may lose some opportunities but overall, I think the Apple approach is the better one to take. You make fewer costly mistakes that lead to a less happy company.

post #6 of 35
Quote:
Originally Posted by Quadra 610 View Post

"Deliberate, thoughtful" is our mantra. 

LOVE hearing this. 

It was Steve's as well.

The problem is that Wall Street doesn't want deliberate and thoughtful. Stock's down again today - almost 2% - because Cook said that they won't make crappy products and that Apple doesn't rely solely on hardware to generate revenues.

Wall Street is full of idiots.
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post #7 of 35
Quote:
Originally Posted by anonymouse View Post

As opposed to, "Gosh, I just bought Motorola for $12.5 Billion. No idea what we'll do with it, but, hey, I couldn't stop myself."

Here's their game plan:
1. Run it as a separate company
2. Lose money
3. Sue competitors using Motorola patents

"Apple should pull the plug on the iPhone."

John C. Dvorak, 2007
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"Apple should pull the plug on the iPhone."

John C. Dvorak, 2007
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post #8 of 35
Quote:
Originally Posted by jragosta View Post

The problem is that Wall Street doesn't want deliberate and thoughtful. Stock's down again today - almost 2% - because Cook said that they won't make crappy products and that Apple doesn't rely solely on hardware to generate revenues.

Wall Street is full of idiots.

If Wall St analysts ran Apple, they'd push out the creative types, make a quick buck using the brand's allure, and when it's all rotted out and no longer creditworthy, they'll sell the carcass in pieces to competitors to repay the creditors they stole from.

"Apple should pull the plug on the iPhone."

John C. Dvorak, 2007
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"Apple should pull the plug on the iPhone."

John C. Dvorak, 2007
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post #9 of 35
Originally Posted by Suddenly Newton View Post
Here's their game plan:
1. Run it as a separate company
2. Lose money
3. Sue competitors using Motorola patents

 

4. Profit!

 

Wait…

Originally posted by Marvin

Even if [the 5.5” iPhone exists], it doesn’t deserve to.
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Originally posted by Marvin

Even if [the 5.5” iPhone exists], it doesn’t deserve to.
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post #10 of 35

And the stock is down almost 2%.  I guess Wall Street won't be satisfied unless Apple starts doing things just to grow the top line (whether it makes good business sense or is profitable doesn't matter).

post #11 of 35
Twitter, Sky Sports, ESPN.
Citing unnamed sources with limited but direct knowledge of the rumoured device - Comedy Insider (Feb 2014)
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Citing unnamed sources with limited but direct knowledge of the rumoured device - Comedy Insider (Feb 2014)
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post #12 of 35
Quote:
Originally Posted by jragosta View Post


The problem is that Wall Street doesn't want deliberate and thoughtful. Stock's down again today - almost 2% - because Cook said that they won't make crappy products and that Apple doesn't rely solely on hardware to generate revenues.

Wall Street is full of idiots.

I honestly don't get Wall Street.   What exactly did they expect Cook to say today?  He's not going to give details on product roadmap.  And if there are larger acquisitions they're thinking about he's not going to announce anything at a Goldman Sachs conference.  Same thing with a lower cost iPhone.  If Wall Street didn't know this before Cook spoke then they really are idiots.  As far as Cook's comment that Apple isn't a hardware company, I think that was to distinguish from Samsung without mentioning them by name.  And to remind people that even if there's pressure from companies flooding the market with cheap hardware Apple has other avenues for generating revenues and growth.

post #13 of 35
Wall Street's love affair with Amazon says it all.
post #14 of 35
Quote:
Originally Posted by rob53 View Post

I hope you're going to report on the other things Cook talked about, including his initial slam on Greenlight. What I find remarkable is that Cook and Apple continue to push support for their customers above all else. They want to provide products and all the garbage supposed investors are spewing is being pushed to the side, as it should be. I support Apple by buying their products and helping others who do as well. I do not support the fanatic stock market or any of those insane people who feel Apple owes them money because they trade. Apple doesn't need that money, they have enough of their own and the people who buy Apple products gave Apple that money. No investment fund ever helped Apple sell anything or provide Apple with any money to sell.

 

I don't own any Apple stock but I'm definitely long on Apple.

 

Last year, we replaced all the grandkids phones with new iPhones -- They had various feature phones and SIMless hand-me-down iPhones used as as iPods.

 

The 3 kids would lose or break, on average, of two phones per year,

 

Last night, the oldest (my 17-year-old granddaughter) said:  "At first I didn't want an iPhone for a phone -- I was afraid it would break and it was kind of cool to get a new phone when the old one broke.  I am so glad you got me an iPhone (4) -- it is so much better than the crummy phones my friends have".

 

That made my daughter's and my day!

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post #15 of 35
No wonder I have zero faith in the stock market, bunch of damned parasitic so-and-sos. 1rolleyes.gif

To echo the herd, I'm really hoping they drive the stock price down far enough that Tim can take the company private again...
post #16 of 35

Every other month? So that would be 6 acquisitions in the last year? Interesting that we have not heard about all of them. The technorati spends time speculating (and even rendering or mocking up) what non-existent Apple products might look like, but they miss out on real events like acquisitions.

post #17 of 35
Quote:
Originally Posted by Stoobs View Post

No wonder I have zero faith in the stock market, bunch of damned parasitic so-and-sos. 1rolleyes.gif

To echo the herd, I'm really hoping they drive the stock price down far enough that Tim can take the company private again...

That would be good for stockholders?

post #18 of 35
"We have looked at large companies. In each case, it didn't pass our test. Will we look at more? I think so. But we're disciplined and thoughtful, and we don't feel a pressure to go out and acquire revenue. We want to make great products. If a large company could help us, then that would be of interest. But, again: Deliberate, thoughtful is our mantra."

It's quotes like this that reassure me that Cook has the right philosophy.
post #19 of 35
Quote:
Originally Posted by Ireland View Post

Twitter, Sky Sports, ESPN.

 

Mmm... AFAICT, ESPN is owned by Disney and worth about $40 Billion... 

 

http://www.forbes.com/sites/kurtbadenhausen/2012/11/09/why-espn-is-the-worlds-most-valuable-media-property-and-worth-40-billion/

 

What a coup it would if Apple/Disney could bring live sports and news to AppleTV.

"...The calm is on the water and part of us would linger by the shore, For ships are safe in harbor, but that's not what ships are for."
- Michael Lille -
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"...The calm is on the water and part of us would linger by the shore, For ships are safe in harbor, but that's not what ships are for."
- Michael Lille -
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post #20 of 35
Quote:
Originally Posted by stelligent View Post

That would be good for stockholders?

*shrug* Probably not, but then it'd also be the fault of nothing other than the system itself.

Fix the broken system and both issues go away.
post #21 of 35
Quote:
Originally Posted by Suddenly Newton View Post


Here's their game plan:
1. Run it as a separate company
2. Lose money
3. Sue competitors using Motorola patents

I don't think Google is pursuing any new litigation against any competitor since taking over Motorola, much less using Moto IP to do so.

 

There's a few inherited lawsuits to be finished up. With suits and countersuits involved that neither Apple nor Microsoft signaled a willingness to drop I can't imagine you think Google should tell Moto to drop those old IP claims filed well before Google even made a purchase offer. That doesn't sound at all wise without commitments from those two to do the same.
 


Edited by Gatorguy - 2/12/13 at 9:24am
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post #22 of 35
Quote:
Originally Posted by Gatorguy View Post

I don't think Google is pursuing any new litigation against competitor since taking over Motorola, much less using Moto IP to do so.

I don't think that's true.

post #23 of 35
Quote:
Originally Posted by stelligent View Post

I don't think that's true.

I believe the FCC or some other govt agency warned them about abusing FRAND patents.

 

As for the article, you mean Cook et al. aren't swimming in gold coins?

post #24 of 35
Quote:
Originally Posted by stelligent View Post

I don't think that's true.

A simple citation to show me wrong might be appropriate. I believe I'm right, but it's always possible I'm mistaken.

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post #25 of 35
Quote:
Originally Posted by Gatorguy View Post

A simple citation to show me wrong might be appropriate. I believe I'm right, but it's always possible I'm mistaken.

Or you can do a Google search. 

 

This notion that we must all provide a citation to make a point is silly, with all due respect. Did you provide a citation when you claimed that Google had never sued anyone? 

 

If you are not sure, search. If you don't believe me, I am fine with you remaining misinformed :)

post #26 of 35
Quote:
Originally Posted by jungmark View Post

I believe the FCC or some other govt agency warned them about abusing FRAND patents.

 

As for the article, you mean Cook et al. aren't swimming in gold coins?

 

What does that have to do with what I wrote?

 

FCC's warning is a warning; it does not stop them from doing anything particularly if the patents in question are not standards-essential.

post #27 of 35
Quote:
Originally Posted by stelligent View Post

Or you can do a Google search. 

 

This notion that we must all provide a citation to make a point is silly, with all due respect. Did you provide a citation when you claimed that Google had never sued anyone? 

 

If you are not sure, search. If you don't believe me, I am fine with you remaining misinformed :)

I always check before claiming something. I'm pretty certain I'm right.  It doesn't mean I'm always correct, but I am much more often than not. As far your suggestion of finding a citation that Google hasn't sued anyone, that sounds silly. Almost akin to you trying to prove you've never kicked a dog. How would you go about that? 

 

I'm looking forward to reading the ongoing Google-initiated IP claim you hint you're aware of, tho unable so far to cite. Just one since May of last year will suffice.

 

EDIT: You might be thinking of an ITC complaint filed by Google Motorola against Apple in August of last year. But several weeks later that one was dropped without explanation so it's not anything they're pursuing. I'm not aware of anything else you could be thinking of. If you know of one please correct me.


Edited by Gatorguy - 2/12/13 at 10:42am
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post #28 of 35
Quote:
Originally Posted by Rogifan View Post

And the stock is down almost 2%.  I guess Wall Street won't be satisfied unless Apple starts doing things just to grow the top line (whether it makes good business sense or is profitable doesn't matter).

Correct.  I like the way Apple doesn't let shareholders run the company.  That is always a bad idea.  Some people have said Apple has no respect for shareholders, but I would say the opposite (is always) true.  Shareholders do not care about product quality, or changing customers live or good design or any of the things that drive Apple DNA.  They only care about return.  In fact most corporations have a line at the very top of their charter that says the job of corporate officers is to "enhance shareholder value".  That simple requirement is what drives corporations to the bottom.  I'm thinking apple does not have such a clause or that it is worded in a more cagey manner.

 

All this being said, I don't buy Apple stock any longer because it is too unpredictable.  Perhaps because they don't kowtow to shareholders and Wall Street.

post #29 of 35
Quote:
Originally Posted by Quadra 610 View Post

"Deliberate, thoughtful" is our mantra. 

 

LOVE hearing this. 

 

It was Steve's as well.

 

Yep, and as a long-term stock holder I am more than content to see the ship steered with this mantra as the wind behind its sails.

post #30 of 35
Originally Posted by mdriftmeyer View Post
Yep, and as a long-term stock holder I am more than content to see the ship steered with this mantra as the wind behind its sails.

 

Also to not see any leaks at the top.

Originally posted by Marvin

Even if [the 5.5” iPhone exists], it doesn’t deserve to.
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Originally posted by Marvin

Even if [the 5.5” iPhone exists], it doesn’t deserve to.
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post #31 of 35

Hmm. 

 

I've always said that Apple should buy or merge with that secretive business entity which mysteriously calls itself simply... the "OTHERS". 

 

Whoever they are, their products are obviously incredibly appealing, since they outsell everyone else on the planet.   I mean, they're always tops in every phone sales or market share chart !!   Check it out...

 

post #32 of 35
Twitter and Pandora would be a good play I think. And I would love for them to get into gaming as well.
post #33 of 35
I predict Apple will buy AMD......
post #34 of 35
Well rather than buy large company's like google and Microsoft, to eliminate competition, they buy little ones to make them improve and defeat competition, a more costumer friendly way of things(vs. costumers throwing fits because of limited competition)
post #35 of 35
Quote:
Originally Posted by stelligent View Post

Or you can do a Google search. 

 

This notion that we must all provide a citation to make a point is silly, with all due respect. Did you provide a citation when you claimed that Google had never sued anyone? 

 

If you are not sure, search. If you don't believe me, I am fine with you remaining misinformed :)

Google yesterday filed it's first IP infringement suit in company history, as a counterclaim against a previous filing by British Telecom. So there you go, and it only took 15 years. About time IMHO. Florian sounds positively giddy that he can now claim Google has chosen to fall in line with all the other litigating techs.

 

I've even offered you a citation to prove you were "misinformed" if you believed Google was already pursuing other infringement claims.  This is the first.

 

http://news.cnet.com/8301-1023_3-57569279-93/google-countersues-british-telecom-over-networking-patents/?part=rss&subj=news&tag=title&utm_medium=twitter&utm_source=dlvr.it

 

http://www.fosspatents.com/2013/02/google-files-first-patent-infringement.html


Edited by Gatorguy - 2/14/13 at 4:29am
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