With more than $70B in cash, Apple could buy Nokia, RIM, HTC & Motorola
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.
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.
Comments
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.
RIM and HTC would be some what pointless.
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.
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.
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?
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.
Couldn't agree more. Be a real leader. Being jobs home. Period.
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!
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.
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.)
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).
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.
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.
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.
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.
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?
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?
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.