Steve Jobs: Apple will use $51B for big moves, not 'stupid' ones
Apple Chief Executive Steve Jobs hinted this week that his company is eyeing a few major acquisitions with its massive $51 billion in cash, with just "one or more" deals possible in the near future, rather than a spending spree.
In his appearance during Apple's conference call for the fourth fiscal quarter of 2010, Jobs was asked by analyst Tony Sacconaghi of Bernstein Research what his company plans to do with its $51 billion in cash and reserves. The analyst inquired whether Apple would return some of the money to investors in the form of a dividend, a possibility that Jobs dismissed as always.
"We strongly believe one or more strategic opportunities will come along we're in a unique position to take advantage of," Jobs said. "We don't let the cash burn a hole in the pocket or make stupid acquisitions. We'd like to continue to keep our powder dry because we think there are one or more strategic opportunities in the future."
Jobs' comments have led to speculation as to what kind of company Apple could be looking to buy. Given Jobs' reported recent meeting with Mark Zuckerberg, chief executive of social networking site Facebook, a potential deal between the two has been presented as a possibility.
Peter Kafka of MediaMemo suggested that such a deal could be a good fit for Apple and its stash of $51 billion in cash, given Apple's desire to fend off Google.
"It's a company that has yet to compete with or brush up against Apple in any significant way," he wrote. "And it's one that Apple seems unlikely to be able to move aside, even if it wanted to. And it's one that's already competing directly with Google, which has to make Jobs like it even more."
Apple has shown a great deal of patience with its cash and reserves, despite the fact that analysts and investors have attempted to push the company on the subject. In February, at an annual shareholder meeting, Jobs said Apple would use the money for "big, bold" risks. At the time, its war chest was at $40 billion.
But Apple has made a number of relatively small key acquisitions in recent years, including two digital mapping companies (Placebase and Poly9), personal assistant software developer Siri, chipmaker Intrinsity, and digital streaming music service Lala.
While the benefits of many of those purchases have not yet been fully realized in Apple's products, the company's acquisition of Quattro Wireless in early 2010 paved the way for the launch of the iAd mobile advertising network in July. Apple has said it expects iAds to take up half of the mobile ad market by the end of 2010.
In his appearance during Apple's conference call for the fourth fiscal quarter of 2010, Jobs was asked by analyst Tony Sacconaghi of Bernstein Research what his company plans to do with its $51 billion in cash and reserves. The analyst inquired whether Apple would return some of the money to investors in the form of a dividend, a possibility that Jobs dismissed as always.
"We strongly believe one or more strategic opportunities will come along we're in a unique position to take advantage of," Jobs said. "We don't let the cash burn a hole in the pocket or make stupid acquisitions. We'd like to continue to keep our powder dry because we think there are one or more strategic opportunities in the future."
Jobs' comments have led to speculation as to what kind of company Apple could be looking to buy. Given Jobs' reported recent meeting with Mark Zuckerberg, chief executive of social networking site Facebook, a potential deal between the two has been presented as a possibility.
Peter Kafka of MediaMemo suggested that such a deal could be a good fit for Apple and its stash of $51 billion in cash, given Apple's desire to fend off Google.
"It's a company that has yet to compete with or brush up against Apple in any significant way," he wrote. "And it's one that Apple seems unlikely to be able to move aside, even if it wanted to. And it's one that's already competing directly with Google, which has to make Jobs like it even more."
Apple has shown a great deal of patience with its cash and reserves, despite the fact that analysts and investors have attempted to push the company on the subject. In February, at an annual shareholder meeting, Jobs said Apple would use the money for "big, bold" risks. At the time, its war chest was at $40 billion.
But Apple has made a number of relatively small key acquisitions in recent years, including two digital mapping companies (Placebase and Poly9), personal assistant software developer Siri, chipmaker Intrinsity, and digital streaming music service Lala.
While the benefits of many of those purchases have not yet been fully realized in Apple's products, the company's acquisition of Quattro Wireless in early 2010 paved the way for the launch of the iAd mobile advertising network in July. Apple has said it expects iAds to take up half of the mobile ad market by the end of 2010.
Comments
I could see the same happening to Facebook.
Facebook would seem to be a strange buy to me. Social network users are incredibly flickle, and I think Facebook is a short term thing. MySpace seemed worth paying a lot of money for to News International a couple of years ago, then everyone moved to Facebook and it seemed like a lousy buy.
I could see the same happening to Facebook.
probably a slowdown, but i think facebook will be around awhile. but facebook just seems so un-apple.
Facebook would seem to be a strange buy to me. Social network users are incredibly flickle, and I think Facebook is a short term thing. MySpace seemed worth paying a lot of money for to News International a couple of years ago, then everyone moved to Facebook and it seemed like a lousy buy.
I could see the same happening to Facebook.
I am not so sure Facebook is the next Myspace.
Myspace always had weak links between users. The people you "friended" on MySpace was not your next door neighbor, your classmate, or your mother.
Facebook has strong links. Your friends on facebook are people you meet on a daily basis. Folks you go on holidays with, colleagues, and distant relationships. It will not be as easy to break links with these people as it was for Myspace.
I have, for example, almost completely stopped using FB. Yet, I keep a profile available, because its the best (often only) way to keep in touch with distant friends and family. The only time I log on is when I get a message, and want to reply. Despite disliking facebook tremendously, its really unlikely I will ever delete my profile (worst case, i use it only to get people's numbers, etc).
probably a slowdown, but i think facebook will be around awhile. but facebook just seems so un-apple.
I am not thrilled simply because I personally don't like FaceBook's UI or much else about how it works. However, if this did happen maybe Apple could make a silk purse out of the pig's ear and I can see iTunes and FaceBook having some strong potential ties.
Buy ADOBE !!!!
That might be a good idea although I suspect it might have to be a hostile take over
buy google.
That would definitely be hostile!
Doesn't Microsoft already have a stake in Facebook?
Yes I believe this is the case, they invested $240M a while back and PayPal invested too. I doubt that would matter.
Buy ADOBE !!!!
Yeah - I agree! That would be so funny and stir up the entire tech community in an unprecedented way. Simply because Steve would make true what he said recently: kill flash.
(This doesn't mean I think it was the best move of Apple to abandon it - but this would surely kill it.)
Doesn't Microsoft already have a stake in Facebook?
yes but your enemy's enemy is your friend. Msft and Apple versus Google? Bring it on.
yes but your enemy's enemy is your friend. Msft and Apple versus Google? Bring it on.
Or is that Bing it on!
Yeah - I agree! That would be so funny and stir up the entire tech community in an unprecedented way. Simply because Steve would make true what he said recently: kill flash.
Indeed.
A. Kill Flash, and
B. terminate CS development for Windows.
Yeah - I agree! That would be so funny and stir up the entire tech community in an unprecedented way. Simply because Steve would make true what he said recently: kill flash.
(This doesn't mean I think it was the best move of Apple to abandon it - but this would surely kill it.)
It is a pretty neat idea when you think of the talent at Adobe and the need for more apps for Mac and iPad in the creative arena that could be trusted to be 100% Apple.
Indeed.
A. Kill Flash, and
B. terminate CS development for Windows.
No, not terminate CS for Windows just make them less capable and late.
Apple Chief Executive Steve Jobs hinted this week that his company is eyeing a few major acquisitions with its massive $51 billion in cash, with just "one or more" deals possible in the near future, rather than a spending spree ...
He's probably still got a hard on for Sony and will buy them out when they start to seriously decline. Either that or he's saving up to buy a movie company like Paramount.