Apple still acquires 15-20 companies per year, Cook says no size is too large to consider
Apple CEO Tim Cook revealed on Tuesday that his company's ambitions as far as acquisitions continues apace, with no acquisition apparently too big or too small for the company to consider from a strategic standpoint.
When Cook was asked about a possible cash repatriation, he initially cautioned to "lets wait and see exactly what it is," as it remains unclear as to how or when tax reform would happen under a new U.S. leadership. However, he also noted that acquisitions were a big part of Apple's business model in the past, currently, and in the future.
"There's not a size that we would not do, based on just the size of it," said Cook. "It's more of the strategic value of it."
Cook stopped short of discussing potential avenues of acquisition for the company, saying that "we are always looking at acquisitions." Apple has purchased between 15 and 20 companies per year, for the last four years.
Notable acquisitions in 2016 include artificial intelligence firms Turi and Tuplejump, and global music platform provider Omnifone. The company also made a $1 billion investment in Chinese ride hailing company Didi Chuxing, as well as another billion into SoftBank's "Vision Fund" for tech business growth.
On Tuesday, Apple reported that its holiday 2016 quarter was the company's biggest ever, soaring to new heights on sales of 78.3 million iPhones following the launch of the blockbuster iPhone 7 series, exceeding Wall Street expectations by all measures.
Apple currently has $246.1 billion on hand, with 94% of it held overseas. Five years ago, the company held $81 billion, with about two-thirds held off shore.
"Apple buys smaller technology companies from time to time, and we generally do not discuss our purpose or plans," Apple typically says in response to acquisition rumors, and today's remarks shed some light, but not much, on Apple's strategy.
When Cook was asked about a possible cash repatriation, he initially cautioned to "lets wait and see exactly what it is," as it remains unclear as to how or when tax reform would happen under a new U.S. leadership. However, he also noted that acquisitions were a big part of Apple's business model in the past, currently, and in the future.
"There's not a size that we would not do, based on just the size of it," said Cook. "It's more of the strategic value of it."
Cook stopped short of discussing potential avenues of acquisition for the company, saying that "we are always looking at acquisitions." Apple has purchased between 15 and 20 companies per year, for the last four years.
Notable acquisitions in 2016 include artificial intelligence firms Turi and Tuplejump, and global music platform provider Omnifone. The company also made a $1 billion investment in Chinese ride hailing company Didi Chuxing, as well as another billion into SoftBank's "Vision Fund" for tech business growth.
On Tuesday, Apple reported that its holiday 2016 quarter was the company's biggest ever, soaring to new heights on sales of 78.3 million iPhones following the launch of the blockbuster iPhone 7 series, exceeding Wall Street expectations by all measures.
Apple currently has $246.1 billion on hand, with 94% of it held overseas. Five years ago, the company held $81 billion, with about two-thirds held off shore.
"Apple buys smaller technology companies from time to time, and we generally do not discuss our purpose or plans," Apple typically says in response to acquisition rumors, and today's remarks shed some light, but not much, on Apple's strategy.
Comments
Let the tea leaf reading begin...
They should buy Sony, just as a big FU to the 1990s Apple naysayers.
Culturally, Apple will likely never understand how to produce new content as well as Netflix, without acquiring them. It's not Apple's forte, at all. Acquire Netflix, let them run independently of Apple and have a over 2-year transition plan to rebranded and relaunch Netflix as "Apple TV" (the service). With special pricing for Apple customers and even better pricing if a person subscribes to both Apple TV & Apple Music. Along with all new redesigned, well designed, intuitive apps across a range of devices. It'd put AM and ATV (the puck) on the map over night—everyone would want an Apple TV. They could optionally intro a second option for ATV (the service)—a slightly higher pricing tier (above $9.99; 6-person family plan) with a 2-year contract for ATV with a free puck included ($14.99; 6-person family plan). AM family plan $14.99 also.
Both streaming services together $24.99 per month ($29.99 minus the $4.99 combi-plan discount). Or without the complimentary puck and contract it's $19.99 per month for family ATV & AM.
Concurrently, produce a truly great first party gaming controller at least as good as the Xbox and PlayStation controllers and beef up the processing and graphics power of the puck and lower the price to $99 (barely break even).
Cut to 5 years from today, Apple own the living room and have moved past Spotify in music: they own web streaming of TV, music, are the go-to device for living room gaming and inadvertently a huge amount of people suddenly have a HomeKit hub in their home.
Botton line: acquire Netflix Tim, otherwise these documentaries on AM are a distraction, Apple TV sales dwindle, AM subscriber numbers don't hockey-stick as they should and Apple has no viable steaming plan for TV.
I sincerely mean this when I say if I was Apple and they could work out a deal to keep the content contracts Neflix already has in place I'd pay $100B for the company. When it comes to streaming TV or films there's Neflix and there's everyone else. They are in a league of their own. That and a decent gaming controller are what are holding back Apple TV from taking off and being truly desirable. When you own the platform you can price it lower on your box to entice sales of said box. And then a combined subscription plan for AM & ATV would be genius, but that only works if the "ATV" part in that combination is Netflix.
It allows Apple to focus on what it's great at: hardware, apps, ease of use, and new products like Car. Just as if Apple were to go social in a meaningful way they should just buy Twitter, to take on video streaming meaningfully, Netflix is where it's all. Every film, TV show and doc series makers want to be on Netflix. It's the only game in town.
Could have bought Yahoo - but it got to a point where Apple's capability in cloud was better than Yahoo.
It's rapidly becoming obvious Apple will only buy companies that are in core research, as well as companies that have made huge progress in capturing market share in priority markets.
NetFlix seems like a natural fit for Apple TV
I believe Apple would be more likely to buy companies that have their own proprietary technology that could be used to enhance Apple's existing core markets. I don't know what that is, but I'm pretty sure it is not buying T-Mobile. Buying T-Mobile would also mean inheriting their Android and Windows handset business which does nothing for Apple.
Dish would be a logical buyer of T-Mobile though, because Dish is US centric and has a huge piece of the US wireless spectrum that they are not even using.
This is why Apple won't buy companies like Netflix.
Netflix makes tons of sense but the price tag doesn't. If they bought the service I feel like renaming it "Apple TV" would kill the household name and familiarity. Leave it a short Netflix and take money from the android/windows people.
I would love to see Apple buy Canon and Immersions Corp(an innovative company that licenses tech).
Immersions created haptic feedback that mimicked real life situations years ago. Now we have the Taptic Engine and soon the Nintendo Switch which allows you to feel things like ice in a cup and marbles in the controllers provided by Immersions technology.
Canon makes beautiful camera tech and once created TVs that were clearer than OLED back in 2007. The TVs couldn't release due to a patent issue.
I talked about this a few weeks ago.
it would be better for Apple to offer their own service as Apple Mobile.
Apple already has tons of Stores in place and their proprietary network would solve tons of issues from crappy customer service to eliminating the ugly sim tray.
Apple is selling way too many iPhones to not be providing their own service at Apple Stores. Imagine the ease of use, customer satisfaction and innovation.
The move to capping mobile data usage for users has already begun. ISPs and carriers are also fighting to get companies like Apple, Google etc to pay them as they consider they cause them bandwidth issues. A ridiculous claim but it comes up every year at MWC all the same.
If you can't find a way to guarantee that your services reach your clients and at sufficient speed you are in trouble. What's the point of having data centers or content delivery agreements if your users are being capped at the point of delivery?
It's the kind of problem that takes money to resolve.