Steve Jobs says Apple must 'think big' with $40 billion in cash

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  • Reply 21 of 323
    Apple's Tim Cook (from AppleInsider Post a few days back):



    Keeping it simple



    One focus for Apple, Cook revealed, is to keep matters simple. The Cupertino, Calif., company hasn't been interested in doing large acquisitions because of value and compatibility issues.



    "We've always been about making the best product, not having the highest market share or the highest revenue," he said. "And so acquiring a company so our revenue gets larger isn't something that drives us."



    The same philosophy applies to Apple's product line. Cook said the company doesn't want to overextend itself, and noted that the company's entire line of products could fit on one table. The only other high-revenue, publicly traded companies that could likely say that would be oil companies, he said.



    Most companies, he said, simply aim to get bigger as they become more successful, but Apple has intentionally avoided that approach.



    "The management team at Apple would never let that happen," Cook said. "That's not what we're about."



    Steve Jobs:



    Jobs reportedly said Apple must "think big"



    Huh, seems like opposite ends of the spectrum!
  • Reply 22 of 323
    melgrossmelgross Posts: 33,237member
    Quote:
    Originally Posted by zmac View Post


    Jobs is the largest disney share holder, he owns more than 7% of DIS. Buy Disney would allow Apple to re-invent the TV and media business. F**K the cable guys. Disney's market cap is about 60bn, Apple can buy with 50% cash (~30bn) and 50% in Apple stock.



    This would also force other media companies which Apple must do business with to move away from Apple. It's best if Apple doesn't directly involve themselves in this.



    A few years ago, I asked Canon's marketing director why Canon didn't make higher end camcorders. The response was that as the largest seller of lenses to the companies that make those pro models, they wouldn't do that, because those companies would see Canon as competing with them, and that would drive them into the arms of Fuji.



    The same thing applies here.
  • Reply 23 of 323
    blastdoorblastdoor Posts: 2,652member
    Quote:
    Originally Posted by anantksundaram View Post


    All unwise, unnecessary, or unfocused.



    1. There is **nothing** that Netflix brings to the table that Apple couldn't replicate today, if it wanted to.



    2. Attempts to marry content by hardware/software companies have invariably ended in disaster (e.g., Sony). Moreover, content is a slow-growth business.



    3. See (1) above.



    4. See (1) above. Also, could raise antitrust eyebrows.



    5. See (2) above.



    Agreed. These ideas run totally counter to what Apple is all about. These are the kinds of things that MBA CEOs do to impress their friends.



    Having said that, the cash hoard is too big -- they need to make some good investments with it. But I suspect it will be more of the same --- more locking in of long term component supplies through large up-front payments; more R&D (developing in-house CPUs, for example); and more very targeted acquisitions of small companies.



    The most radical idea I have is for them to make a targeted push into certain types of business environments. Tim Cook noted the other day that if a Mac can improve the productivity of someone making $150,000 a year by 1%, then the Mac pays for itself in one year. I think that statement indicates that Apple sees some potential to get into businesses in a very targeted way -- the highly educated, highly payed workers who have the clout to demand whatever computer they want. Apple is well positioned now to go after that market. That would require some more investment in support and marketing infrastructure to go after that business, also maybe some in-house development of software for that market.



    My very rough sense is that they should get the cash hoard down to about $20 billion. That still gives them a nice margin for error in case their next big thing is a massive flop.
  • Reply 24 of 323
    Quote:
    Originally Posted by macshark View Post


    Ideas for Apple acquisitions:



    1. Buy Netflix. Netflix is worth less than $3.5B and is a profitable company. This is the way to turn AppleTV from a hobby to an industry leading product.



    2. Get into content distribution business by buying one or more content distribution companies.



    3. Buy Adobe, though Adobe is nearly worth $18B and has a very high P/E ratio. This would settle any problems with flash and mobile MacOS devices once and for all. Apple ends up with a set of duplicate products on the CS side, but that can be fixed over time...



    4. Buy Palm to consolidate the smart phone market. Palm is worth pocket change ($1B)



    5. Buy Disney? Or another large media corporation like Liberty?



    1.) Why would Apple (computer/consumer electronics company) get into the physical media delivery business? Apple already has the 'on demand' functions of Netflix built in with a higher margin.

    2.) Apple IS a content distribution business - why would they move from the paradigm of 'content distribution to support our hardware/software agenda' to lower margin general distribuion.

    3.) Why? Adobe is already one of the largest suppliers of apple software, why buy them? For Flash? no.

    4.) Buy Palm - No. just... No (Former Treo Owner, now iPhone owner)

    5.) Buy Disney(Disney, ESPN, ABC) -- why expend the cash to move into a market that Apple is not suited to running. Especially when the CEO of Apple is ALREADY the single largest stock holder of Disney.



    Apple could buy a high end audio/TV/etc manufacturer [to produce Apple TVs, literally TVs] but Apple has steadfastly avoided owning the manufacturing assets, preferring contract manufacturers.



    No, apple is developing an Engineering competency to bring iOS to other products - TVs being an obvious starting point. Why buy a company when you can just leverage your culture and design ethos.



    besides, having 40 billion in the bank means that Apple can FUND the engineering competency I referenced above for YEARS without it having to deliver a product until the product is 'right' [Tech Level + Manufacter cost + User Accpetance].
  • Reply 25 of 323
    tundraboytundraboy Posts: 1,814member
    Quote:
    Originally Posted by reliason View Post


    So, Steve, what are you going to do with that $40 Billion war chest that Apple has...



    I'm thinking of buying a small developing nation and making myself god emperor....



    Something like the Sudan, Luxembourg or Slovinia... [three random countires with a GDP LESS than 40 Billion...] :-)



    Luxembourg a developing nation, that's new. A Western European country with a per capita GDP 37.5% higher than the U.S.



    Ladies and Gentlemen, I give you the U.S. educational system . . .
  • Reply 26 of 323
    solipsismsolipsism Posts: 25,726member
    Quote:
    Originally Posted by tundraboy View Post


    Luxembourg a developing nation, that's new. A Western European country with a per capita GDP 37.5% higher than the U.S.



    Ladies and Gentlemen, I give you the U.S. educational system . . .



    That is per capita which doesn't give us the GDP of the country, though I think his numbers are off since I'm seeing each of those being in the 50s.
  • Reply 27 of 323
    hill60hill60 Posts: 6,992member
    Buy $10 billion in Microsoft shares and spend $1 billion advertising the "bail out".



    Just for sh*ts and giggles.



    Cost = $11 Billion.



    Result = priceless.
  • Reply 28 of 323
    melgrossmelgross Posts: 33,237member
    Quote:
    Originally Posted by Rot'nApple View Post


    Apple's Tim Cook (from AppleInsider Post a few days back):



    Keeping it simple



    One focus for Apple, Cook revealed, is to keep matters simple. The Cupertino, Calif., company hasn't been interested in doing large acquisitions because of value and compatibility issues.



    "We've always been about making the best product, not having the highest market share or the highest revenue," he said. "And so acquiring a company so our revenue gets larger isn't something that drives us."



    The same philosophy applies to Apple's product line. Cook said the company doesn't want to overextend itself, and noted that the company's entire line of products could fit on one table. The only other high-revenue, publicly traded companies that could likely say that would be oil companies, he said.



    Most companies, he said, simply aim to get bigger as they become more successful, but Apple has intentionally avoided that approach.



    "The management team at Apple would never let that happen," Cook said. "That's not what we're about."



    Steve Jobs:



    Jobs reportedly said Apple must "think big"



    Huh, seems like opposite ends of the spectrum!



    I see no conflict.



    Cook was saying that the intent of many companies was to get bigger by any means possible. That getting bigger was the goal in itself. I agree that that's what many companies do.



    Jobs wasn't saying that. Apple has grown to become big by developing excellent and innovative products. Growth is inevitable. Because of that, they've accumulated big bucks. When it comes to decide what to do with them, Apple has bought small companies for their technology and employee knowledge and skill. But with the money just coming in, Apple must be realistic about what to do with it. That means "thinking big".



    That doesn't mean, by default, buying another big company. It could be a big step for Apple. More large data centers, increasing R&D substantially, increasing the number of stores more quickly, etc. Possibly moving to constructing an advanced manufacturing facility. Increasing investment in processors, memory, LCD panels, AMOLED, or other parts they need.



    But it COULD mean buying, or investing in a large company. I had thought, several years ago, that buying Sun, when it was still doing well, would have given them the credibility in the back offices they don't have, and ownership of several technologies that they were using, or thinking of using, but that didn't happen.
  • Reply 29 of 323
    Quote:
    Originally Posted by tundraboy View Post


    Luxembourg a developing nation, that's new. A Western European country with a per capita GDP 37.5% higher than the U.S.



    Ladies and Gentlemen, I give you the U.S. educational system . . .



    You sir, obviously miss the humor. I just went down the GDP chart and found those nations under 40MMM. I assure you, I hold the Grand Duchy of Luxembourg in high esteem. I figured I'd get MORE hate including Syria...



    All I have to say to you about the American Education system is... It's f'n Broke.



    But let me ask you this, While I can find Luxembourg on a Globe, can you Find Nebraska? :-D We're a US, midwestern State with more population and land than Lux. [and probably more cattle than Lux has population also :-)]
  • Reply 30 of 323
    tundraboytundraboy Posts: 1,814member
    Quote:
    Originally Posted by macshark View Post


    Ideas for Apple acquisitions:



    1. Buy Netflix. Netflix is worth less than $3.5B and is a profitable company. This is the way to turn AppleTV from a hobby to an industry leading product.



    2. Get into content distribution business by buying one or more content distribution companies.



    3. Buy Adobe, though Adobe is nearly worth $18B and has a very high P/E ratio. This would settle any problems with flash and mobile MacOS devices once and for all. Apple ends up with a set of duplicate products on the CS side, but that can be fixed over time...



    4. Buy Palm to consolidate the smart phone market. Palm is worth pocket change ($1B)



    5. Buy Disney? Or another large media corporation like Liberty?



    Buy Sony's consumer electronics business for a song, integrate iPhoneOS and iTunes in them and watch as competitors shit their pants when Apple/Sony becomes the default TV/Audio/Camcorder choice of all those people who already use iTunes.
  • Reply 31 of 323
    gazoobeegazoobee Posts: 3,754member
    Quote:
    Originally Posted by macshark View Post


    Ideas for Apple acquisitions:



    1. Buy Netflix. Netflix is worth less than $3.5B and is a profitable company. This is the way to turn AppleTV from a hobby to an industry leading product.



    This makes no sense IMO. They can replicate what Netflix does without buying Netflix itself. Mostly what they would be buying if they buy Netflix is the customer base and a bunch of physical buildings and infrastructure that they probably don't want.



    Quote:
    Originally Posted by macshark View Post


    2. Get into content distribution business by buying one or more content distribution companies. ...



    This is closer to what I think will happen.

    Apple will buy Amazon or create something similar with online retailing.
  • Reply 32 of 323
    melgrossmelgross Posts: 33,237member
    Quote:
    Originally Posted by tundraboy View Post


    Luxembourg a developing nation, that's new. A Western European country with a per capita GDP 37.5% higher than the U.S.



    Ladies and Gentlemen, I give you the U.S. educational system . . .



    I give you a very small country, with a population of less than a half million, which depends on its income, mostly from banks which house hundreds of billions from tax evaders, just like Switzerland. The rest is from tourism and income from casinos.



    What does education have to do with it?
  • Reply 33 of 323
    Tipper on the board? Oh god that's frightening. Good thing it was a joke.
  • Reply 33 of 323
    Quote:
    Originally Posted by reliason View Post


    1.) Why would Apple (computer/consumer electronics company) get into the physical media delivery business? Apple already has the 'on demand' functions of Netflix built in with a higher margin.



    Netflix is actually currently the leader in online media delivery for Video rentals. The reason why they were able to accomplish this was partly because they have better technology than others (e.g. real time h.264 streaming compared to Amazon's solution that has delays and requires local storage) but mostly because they had a good customer base through their mail order DVD rental business. Make no mistake, Netflix's long term goal is to switch to a pure online delivery model. They simply cannot do this today since many of the media companies do not allow their content to be distributed online. Apple could certainly change that.
  • Reply 35 of 323
    solipsismsolipsism Posts: 25,726member
    Quote:
    Originally Posted by reliason View Post


    But let me ask you this, While I can find Luxembourg on a Globe, can you Find Nebraska? :-D We're a US, midwestern State with more population and land than Lux. [and probably more cattle than Lux has population also :-)]



    That is a good point. Europe has 50 countries the US has 50 states, yet the US is considerably larger. It's not unreasonable to expect an American not to know much of the world when they drive all day and still not be out of their state, while there are only a few places in Europe can do that without crossing multiple countries.
  • Reply 36 of 323
    dreyfus2dreyfus2 Posts: 1,072member
    Jobs must have been in a good mood... at least he did not answer what keeps him awake at night with "Flash"...



    All against Tipper Gore on the Apple board though... Bringing that PMRC lady to the board will only ensure further advancements in censorship. Let Avon have her...



    I like that "think big" statement though. Guaranteed to create tons of hype and speculation for nothing.
  • Reply 37 of 323
    Quote:
    Originally Posted by Blastdoor View Post


    Agreed. These ideas run totally counter to what Apple is all about. These are the kinds of things that MBA CEOs do to impress their friends.



    Having said that, the cash hoard is too big -- they need to make some good investments with it. But I suspect it will be more of the same --- more locking in of long term component supplies through large up-front payments; more R&D (developing in-house CPUs, for example); and more very targeted acquisitions of small companies.



    The most radical idea I have is for them to make a targeted push into certain types of business environments. Tim Cook noted the other day that if a Mac can improve the productivity of someone making $150,000 a year by 1%, then the Mac pays for itself in one year. I think that statement indicates that Apple sees some potential to get into businesses in a very targeted way -- the highly educated, highly payed workers who have the clout to demand whatever computer they want. Apple is well positioned now to go after that market. That would require some more investment in support and marketing infrastructure to go after that business, also maybe some in-house development of software for that market.



    My very rough sense is that they should get the cash hoard down to about $20 billion. That still gives them a nice margin for error in case their next big thing is a massive flop.



    Good points/ideas; nice post.
  • Reply 38 of 323
    Build Apple Electric Cars. They will look like the original Venture One, has a range of 400+ miles. Go top speed of 180MPH, Charges in 15 minutes or less, has removable power modules available at all existing gas stations for those long trips. Built in iPhone/iPod Touch Dashboard Module Integration for that seamless built in look. Sell these all at 11K and if your a Windows users, your cost would be 80K.



    http://www.treehugger.com/files/2007...enture-one.php
  • Reply 39 of 323
    Quote:
    Originally Posted by tundraboy View Post


    Buy Sony's consumer electronics business for a song, integrate iPhoneOS and iTunes in them and watch as competitors shit their pants when Apple/Sony becomes the default TV/Audio/Camcorder choice of all those people who already use iTunes.



    Absolute fantasy.



    Why would they buy a failing consumer electronics company when Apple is already a highly successful consumer electronics company, better advertising, retail presence with all major vendors, and a very good history of being able to quickly scale manufacturing to their needs?



    "Ladies and Gentlemen, I give you the U.S. educational system . . . "



    I'd save the education comparisons.
  • Reply 40 of 323
    cu10cu10 Posts: 294member
    Early adopter refunds anyone?
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