Apple doesn't buy companies to stop competition, says CEO Tim Cook
In an interview after the antitrust hearing on Wednesday, Apple CEO Tim Cook says that Apple buys companies to overcome obstacles, and not to limit competition.
Tim Cook has been under regulatory pressure over Apple's business model
After Tim Cook appeared in front of the House Antitrust Subcommittee on Wednesday, the company's various business practices have been called into question. Cook insisted that Apple was not making purchases to end competition, but to implement new technology or talent to better their platforms.
"If you look at the things behind the investigation, the things are acquisitions, and if you noticed, we didn't get any questions on acquisitions because our approach on acquisitions has been to buy companies where we have challenges, and IP, and then make them a feature of the phone," Cook said in an interview with CNBC.
The other companies in question, Facebook, Google, and Amazon, have all been questioned similarly. Acquisitions that appeared to end competition with their companies were all challenged by the subcommittee. Amazon was questioned over its purchase of Diapers.com, and Facebook about its purchase of Instagram.
At Wednesday's hearing, Cook was not questioned about any of Apple's major acquisitions. SRI was purchased to bring Siri to the iPhone, and Workflow enabled Shortcuts to become native to the iOS platform.
Apple's biggest public acquisition was the $3 Billion Beats By Dre takeover in 2014, which lead to the creation of Apple Music. The Beats platform still exists within Apple and competes directly with Apple's own AirPods brand.
"An example of that was Touch ID," Cook continued. "We bought a company that accelerated a Touch ID at a point."
Apple purchases a company every few weeks, and they do not always publicly announce such acquisitions. Dark Sky, the hyper-local weather app, was one such recent purchase. The weather service will be implemented in iOS 14, and its Android app removed from Google Play.
Tim Cook has been under regulatory pressure over Apple's business model
After Tim Cook appeared in front of the House Antitrust Subcommittee on Wednesday, the company's various business practices have been called into question. Cook insisted that Apple was not making purchases to end competition, but to implement new technology or talent to better their platforms.
"If you look at the things behind the investigation, the things are acquisitions, and if you noticed, we didn't get any questions on acquisitions because our approach on acquisitions has been to buy companies where we have challenges, and IP, and then make them a feature of the phone," Cook said in an interview with CNBC.
The other companies in question, Facebook, Google, and Amazon, have all been questioned similarly. Acquisitions that appeared to end competition with their companies were all challenged by the subcommittee. Amazon was questioned over its purchase of Diapers.com, and Facebook about its purchase of Instagram.
At Wednesday's hearing, Cook was not questioned about any of Apple's major acquisitions. SRI was purchased to bring Siri to the iPhone, and Workflow enabled Shortcuts to become native to the iOS platform.
Apple's biggest public acquisition was the $3 Billion Beats By Dre takeover in 2014, which lead to the creation of Apple Music. The Beats platform still exists within Apple and competes directly with Apple's own AirPods brand.
"An example of that was Touch ID," Cook continued. "We bought a company that accelerated a Touch ID at a point."
Apple purchases a company every few weeks, and they do not always publicly announce such acquisitions. Dark Sky, the hyper-local weather app, was one such recent purchase. The weather service will be implemented in iOS 14, and its Android app removed from Google Play.
Comments
An evil company.
Suing the little guy without patents is bad for PR (nobody wants to partner with bullies) and suing big companies is a software patent Cold War, so it just isn't done. Sherlocking is still a thing, but pick the right product and this won't happen. I personally have nothing wrong with Sherlocking since it is legitimate competition. It is just a risk you take when starting any business.
2. If “Apple is now so huge it just scooped up anything that is really new,” how are Google, Microsoft, and other large tech companies (IBM, Spotify, Amazon, et al) able to compete? Oh oops so much for that theory ...
3. “The chance of two guys starting up a new tech company in a garage and having it last are just about zero.” Again, this is not true. I’m sure that the vast majority of such firms (which don’t stay “two guys” for very long, as Apple didn’t) eventually get bought out by a larger firm (see also Nest selling out to Google), but that has been the way of businesses long before technology was an industry. All kinds of successful companies buy all kinds of startups and not-so-startup small companies all the time, always have done. This is one of the ways the rich get richer and the big firms get bigger.
This happens because of the reason a lot of “two guys” (or women, or a mix) start companies in the first place: build it up to a success, then sell it for a hefty profit and either a) start another startup or b) retire on the proceeds. But sometimes they don’t. Nando’s started off as a family business, so did Ben & Jerry’s (literally two guys!). Marco Arment has some successful apps, and as far as I can tell it’s still just him doing most of it. I’m sure he’s rebuffed offers to buy some of his products.
4. Finally, I have to point out the flaw in your last statement — “you wonder if anything new will come from anywhere else.” Did you read the article? Siri, Touch ID, Apple Music, Dark Sky, and a huge host of other things we think of as “Apple” things were all licensed or bought out from far smaller companies. The “carrot” of a big payoff and/or far more infrastructure/growth options/support for their vision is what motivated these and many other startups/small companies to join Apple, and you can rest assured that this will continue to motivate people who have big, great ideas to start up companies to realise their visions. Yes, sometimes acquisition hurts/ruins the rep a product or service had before (see also things bought by FB and Google, especially), but more often it gets that product/service where the original creators could not quite take it. M&A is one of the cornerstones of business, especially when done successfully.
Instagram is the perfect example of a small company rising because of iPhone. They CHOSE to sell to Facebook. Had they not sold they would have been larger than Snap Inc.
AI uses creepy Google. I'm starting to think Google also listens in. I mentioned a brand I'm not interested in by my work PC and now I get bombarded with ads from that brand on said computer.
in the meantime long AAPL, FB and thinking about an entry on GOOG and MSFT.
The elaborate tax schemes are legal because people in government are using the same tax schemes themselves.
I also try to pay as little tax as legally possible, and I'm pretty sure that you're not volunteering to pay extra.
Starts post with list of Apple products he owns, as if if this somehow proves he's right.
Then uses the phrase "Let's face it …" to indicate that a flimsy argument is on its way, before leading to phrases such as "they likely have" and "but could also" which points to speculation rather than fact.
How many IP protection suits has Apple taken out in the past fifteen years? In fact, how many has Google taken out? How about IBM? Microsoft? These massive tech firms do not use patents to attack the little guy: it's really bad PR. They use them to protect themselves from other big tech companies.
Rubbish. People are starting new small outfits all the time, and you're going to see a wave of them this year due to so many people being laid off. I pay a subscription for AnyList, which is a great app and is two friends working out of a living room.
And do you know what has facilitated a couple of friends starting up a business in one of their living rooms? The App Store.
In this case, you've regurgitated what Cook said in the article and tried to present it as some devious, hidden plan you've uncovered, ignoring that Cook has said that they buy companies to make their product better. People sell their companies to Apple, Apple uses the manpower and/or tech they've acquired in their products, and you have a problem with that. Oy.
Ridiculous. There are plenty of other Weather data sources and apps available for consumers on Android (and iOS) to choose from. There's nothing particularly unique about Dark Sky other than it's designed well — it's just a weather data aggregator from various sources. Users can easily switch to another app with the same functionality. The apps that currently pull data from Dark Sky's API can just switch to another source as well.