Apple acquired 15 companies this year, but the identity of 6 remain a mystery
Over the past 12 months of Apple's fiscal 2015 (ending in September), the company "completed 15 acquisitions to enhance and accelerate our roadmap for products and services," noted its chief executive Tim Cook in the company's quarterly earnings call. However, the identity of only nine of these are known, and some of those haven't been confirmed.
Apple Infinite Loop Campus
A year ago, Cook offered some mystery in addressing the companies Apple had acquired, saying of their identity, "some of which we'll try to keep quiet and some of which seems to be impossible to keep quiet."
That highlights the competitive nature involved with identifying and wooing potential companies to become part of Apple in an environment where some firms may be seeking to remain private, while others are being targeted for acquisition by other tech firms in parallel, as they also strive to expand their talent pool.
Nine of the firms Apple is believed to have acquired in fiscal 2015 include U.K. digital audio effects maker Camel Audio, U.K. media analytics startup Semetric, Virginia-based NoSQL database maker FoundationDB, multi-aperture Israeli imaging firm LinX, high-precision satellite GPS firm Coherent Navigation from California, German augmented reality firm Metaio, mapping data analytics and visualization firm Mapsense, car-focused British speech tech firm VocalIQ and machine learning partnership Perceptio located in Palo Alto.
That leaves another six companies that Apple has acquired over the past year that nobody seems to know anything about. This appears to be a significant departure from the often broadly advertised acquisitions made by many other tech companies.
In 2013 and 2014, the old Google had been spending well over $1 billion per year on lots of smaller acquisitions, in addition to major deals like the $2.5 billion it paid for hardware maker Nest. Over the first six months of 2015, however, it only spent $149 million on acquisitions.
This summer, the company's chief financial officer Ruth Porat noted she was focused on "the levers within our control to manage the pace of expenses." That reduction in spending enabled the search giant to "beat expectations" for revenue and earnings.
Alphabet's "acquisitions, net of cash acquired," over the last nine months of 2015 were $244 million, a huge drop over the corresponding months of 2014, during which it reported spending $4.6 billion. If it had continued spending so much on acquisitions this year, over the last quarter it would have erased $1 billion in profits, or effectively all of its operating income increase over the previous year ago quarter.
Apple's annual costs related to business acquisitions over the last six years has remained at around $350 to $500 million, apart from its one time splurge in buying Beats last year. That's about half as much as Google has spent historically (when you also exclude Google's largest, multi-billion acquisitions such as Nest). However, that also means Apple is now spending more than Alphabet on business acquisitions.
Across the first nine months of 2015, Alphabet spent only 5 percent more than the corresponding period of 2014 on property and equipment (around $10 billion per year), and over the last three months its capex investments actually were lower than in the year ago quarter.
Apple hired 17,400 full-time employees in fiscal 2015, an increase of 5,000 more than were hired in 2014. The world's largest public company now directly employs over 110,000 people. Apple opened 26 new retail stores in 2015, each of which employs on average a staff of 100, indicating that only about 2,600 (or 15 percent) of Apple's new employees were retail workers.
Alphabet now employs 59,976 people, an increase of 8,412 over last year. So Apple is also hiring new people at more than twice the rate of Alphabet, which includes Google and its "Other Bets," a broad range of experimental moonshots.
Apple has also "acquired" a big chunk of itself, spending $14 billion to buyback its own stock over the past quarter, expanding its total expenditures on buybacks since 2012 to an incredible $104 billion. Through March 2017, Apple has allocated another $36 billion to spend on stock buybacks. Alphabet just announced plans to spend nearly $5.1 billion on buybacks over the next two years, after years of preferring to only invest its revenues in other companies.
Apple Infinite Loop Campus
A year ago, Cook offered some mystery in addressing the companies Apple had acquired, saying of their identity, "some of which we'll try to keep quiet and some of which seems to be impossible to keep quiet."
That highlights the competitive nature involved with identifying and wooing potential companies to become part of Apple in an environment where some firms may be seeking to remain private, while others are being targeted for acquisition by other tech firms in parallel, as they also strive to expand their talent pool.
Nine of the firms Apple is believed to have acquired in fiscal 2015 include U.K. digital audio effects maker Camel Audio, U.K. media analytics startup Semetric, Virginia-based NoSQL database maker FoundationDB, multi-aperture Israeli imaging firm LinX, high-precision satellite GPS firm Coherent Navigation from California, German augmented reality firm Metaio, mapping data analytics and visualization firm Mapsense, car-focused British speech tech firm VocalIQ and machine learning partnership Perceptio located in Palo Alto.
That leaves another six companies that Apple has acquired over the past year that nobody seems to know anything about. This appears to be a significant departure from the often broadly advertised acquisitions made by many other tech companies.
Apple vs Alphabet
Apple has been on an acquisition and "acqui-hiring" binge for several years now, after long trailing the rapid acquisition pace of other Silicon Valley firms, particularly Google (now known as Alphabet). But while Apple's acquisition pace has increased, Alphabet's have slowed down.In 2013 and 2014, the old Google had been spending well over $1 billion per year on lots of smaller acquisitions, in addition to major deals like the $2.5 billion it paid for hardware maker Nest. Over the first six months of 2015, however, it only spent $149 million on acquisitions.
While Apple's acquisition pace has increased, Alphabet's have slowed down
This summer, the company's chief financial officer Ruth Porat noted she was focused on "the levers within our control to manage the pace of expenses." That reduction in spending enabled the search giant to "beat expectations" for revenue and earnings.
Alphabet's "acquisitions, net of cash acquired," over the last nine months of 2015 were $244 million, a huge drop over the corresponding months of 2014, during which it reported spending $4.6 billion. If it had continued spending so much on acquisitions this year, over the last quarter it would have erased $1 billion in profits, or effectively all of its operating income increase over the previous year ago quarter.
Apple's annual costs related to business acquisitions over the last six years has remained at around $350 to $500 million, apart from its one time splurge in buying Beats last year. That's about half as much as Google has spent historically (when you also exclude Google's largest, multi-billion acquisitions such as Nest). However, that also means Apple is now spending more than Alphabet on business acquisitions.
Acquiring Apple
In addition to acquiring other businesses, Apple is also expanding faster than Alphabet in its appetite for internal expansion. Apple's capex investments in property and equipment have been growing annually by more than 15 percent, from $8.2 billion in 2013 to 9.6 billion in 2014 and $11.25 billion in fiscal 2015. Next year, Apple expects to spend $15 billion, which would represent growth of more than 33 percent. Just five years ago, the company was only spending just over $2 billion in capex.Across the first nine months of 2015, Alphabet spent only 5 percent more than the corresponding period of 2014 on property and equipment (around $10 billion per year), and over the last three months its capex investments actually were lower than in the year ago quarter.
Apple hired 17,400 full-time employees in fiscal 2015, an increase of 5,000 more than were hired in 2014. The world's largest public company now directly employs over 110,000 people. Apple opened 26 new retail stores in 2015, each of which employs on average a staff of 100, indicating that only about 2,600 (or 15 percent) of Apple's new employees were retail workers.
Alphabet now employs 59,976 people, an increase of 8,412 over last year. So Apple is also hiring new people at more than twice the rate of Alphabet, which includes Google and its "Other Bets," a broad range of experimental moonshots.
Apple has also "acquired" a big chunk of itself, spending $14 billion to buyback its own stock over the past quarter, expanding its total expenditures on buybacks since 2012 to an incredible $104 billion. Through March 2017, Apple has allocated another $36 billion to spend on stock buybacks. Alphabet just announced plans to spend nearly $5.1 billion on buybacks over the next two years, after years of preferring to only invest its revenues in other companies.
Comments
The impact comes later if the acquisition increases costs of operation without an equal increase in revenue, or if the assets loose value.
Apple is the machine that Steve created to ingest technology and output innovation. Mostly, this machine evolves at a fairly conservative pace, sprinkles little bits of brilliance in every iteration, and at least a few times so far, has leapt to disrupt; an efficient market mechanism for maximizing opportunities.
This machine wouldn't be possible without a strong cultural identity, nor efficiency management; it is fueled by profits of previous success, but seems to thrive with a war chest at its disposal.
Yesterday, I found this link on John Gruber's site;
http://ben-evans.com/benedictevans/2015/11/7/mobile-ecosystems-and-the-death-of-pcs
"Things are best when they are obsolete"
"The old way of doing things reaches perfection just at the time it is being replaced"
It's interesting in reflection, that iOS has been such a beneficiary of these absorbed technologies and not PC's; of course it would be.
Apple still has a small number of highly profitable products. The build up over the past year and what looks like into the near term future means that Apple has more then just a car release planned for us pro Apple consumers
Apples future can be incredibly bright as long as it is managed well. Tim Cook is probably the best leader Apple could have at this point!
Just added 500 shares this morning at $115.3995.
When I began my investing career I read about how Peter Lynch suggested you should be able to communicate your investment thesis with a piece of paper and a crayon. It should be succinct and readily apparent what advantage a business has.
My first investment, back in 1993, was Avon Products. My investment thesis was, 'Avon is the Coca Cola of the cosmetics world.' It summed up the fact that Avon was, in 192 countries, a ubiquitous and accessible brand, a bit of first-world luxury available to everyone.
My investment thesis on Apple has been, 'If it seems like Apple products are from the future, that's because they are.' This is a recognition of Apple's ability to develop complex manufacturing technologies, like when they purchased dozens of expensive industrial lasers to burn those hexagonal grids of invisible-to-the-eye holes in the aluminum bezel of the MacBook Air, behind which resides the green LED indicator for the webcam. It still amazes me when I see a section of what looks like solid aluminum light up in green to indicate my webcam is active.
But now I think someone has come up with an even more succinct description of the machine that is Apple. Well done, sir!
http://ben-evans.com/benedictevans/2015/11/7/mobile-ecosystems-and-the-death-of-pcs
"Things are best when they are obsolete"
"The old way of doing things reaches perfection just at the time it is being replaced"
At first, I was impressed at the insight too. Then it occurred to me that people normally stop developing the existing technology once the superseding tech arises (and is proved viable), so yeah, a technology is best when it becomes obsolete. And "perfection" in tech has a murky definition so the second assertion is clever but meaningless.
The assertions are similar to "Strange, I always find missing stuff in the last place I look!"
Mario, Pokemon, Animal Crossing, Wii, Donkey Kong, Zelda, Metroid, Smash Bros, Brain Age, Nintendogs, Duck Hunt.
The amount of popular IP they own is ridiculous. Every time a fake Pokemon game is released on iOS it shoots straight to the top.
Plus they have a ton of innovative engineers. Every gaming controller used today is a Nintendo invention.
It appears that unlike Apple, Alphabet's recent increase in share price is due to aggressive use of YouTube ads & their new mantra of "stop doing stupid sh*t."
Unlike Apple, they do not have a long term growth strategy.
... and a controlling interest in Tesla in order to fast-track development of really affordable AppleCar.?