Apple radically cuts down on acquiring firms for technology and talent

Posted:
in General Discussion
Apple bought seven times more firms in 2020 than it now has across both 2021 and 2022 so far, according to new regulatory filings.




Apple only rarely makes high-cost, high-profile acquisitions like its 2014 one of Beats. Nonetheless, it has been steadily and regularly buying up firms, until now.

Apple avoids revealing any details of acquisitions except when required by law. According to Bloomberg, one such requirement has led to regulatory filings that reveal Apple spent $33 million on acquisitions in its fiscal year 2021. So far in fiscal 2022, it has spent $169 million.

That does mean Apple's spending on buying firms in its current fiscal is up five times on what it was in 2021. But it's still a dramatic drop from the year before, when Apple reported spending $1.5 billion in fiscal 2022.

The filings report total spend rather than any breakdown, or any detail of specific deals. The only two confirmed Apple acquisitions in 2022, the UK's Credit Kudos, and AI Music.

In a rare comment regarding buying firms, Tim Cook said in 2019 that Apple was then typically acquiring a new company every two to three weeks.

Cook separately said in February 2022 that Apple had acquired 100 companies over the previous six years. Only a fraction of those deals were ever required to be made public, however.

Based solely on what deals have been confirmed, AppleInsider calculated that it typically takes 18 months for a firm's technology to appear in Apple's lineup. It's a necessarily approximate calculation, however, as even when a deal is known, it can result in behind-the-scenes improvements Apple doesn't reveal.

Compared to its rivals, Apple has traditionally spend less on buying other firms. For instance, Microsoft paid $69 billion for Blizzard in January 2022, and Google bought security firm Mandiant for $5.4 billion in March 2022.

Read on AppleInsider
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Comments

  • Reply 1 of 21
    byronlbyronl Posts: 246member
    probably for antitrust reasons
    M68000watto_cobra
  • Reply 2 of 21
    JP234JP234 Posts: 219member
    Growing earnings organically by making great products that everyone wants, rather than buying other companies? What a concept! Too bad some other S&P 500 corporations haven't learned this lesson. The great Magellan Fund manager Peter Lynch had a name for growth by acquisition: "Diworsification."
    sconosciutojony0bestkeptsecretwatto_cobra
  • Reply 3 of 21
    genovellegenovelle Posts: 1,392member
    So Microsoft paid $69 million for a game developer? And they are supposed to be one of the top game developers already. Odd. 

    For perspective, Apple’s single largest acquisition to date was Beats. They got a thriving brand, compatible hardware, a streaming service, and additional talent. Oh and a company that was already profitable and popular. 

    For just just a 9 billion more Apple could have acquired a Beats every year back to 1996 when they acquired Steve Jobs’ Next Computer for $400 million. 
    watto_cobra
  • Reply 4 of 21
    melgrossmelgross Posts: 33,299member
    byronl said:
    probably for antitrust reasons
    Definitely not. Nothing that Apple buys falls under that category. Microsoft buying Blizzard could. Apple buys small technology companies that give them some tech they don’t have, or are already working on.
    sconosciutojony0watto_cobra
  • Reply 5 of 21
    melgrossmelgross Posts: 33,299member
    JP234 said:
    Growing earnings organically by making great products that everyone wants, rather than buying other companies? What a concept! Too bad some other S&P 500 corporations haven't learned this lesson. The great Magellan Fund manager Peter Lynch had a name for growth by acquisition: "Diworsification."
    Do you know what type of companies Apple buys? Other than two exceptions, it small, usually unknown companies with some software if hardware that Apple needs for their products. It’s almost never to buy an actual product. The only time Apple really did that in a big way was buying Next and Beats. Otherwise they bought small software companies for their software, but totally changed for their use.
    sconosciutoJP234jony0watto_cobra
  • Reply 6 of 21
    genovelle said:
    So Microsoft paid $69 million for a game developer? And they are supposed to be one of the top game developers already. Odd. 

    For perspective, Apple’s single largest acquisition to date was Beats. They got a thriving brand, compatible hardware, a streaming service, and additional talent. Oh and a company that was already profitable and popular. 

    For just just a 9 billion more Apple could have acquired a Beats every year back to 1996 when they acquired Steve Jobs’ Next Computer for $400 million. 
    For the year ended December 31, 2021, Activision Blizzard’s net revenues presented in accordance with GAAP were $8.80 billion,

    https://investor.activision.com/news-releases/news-release-details/activision-blizzard-announces-fourth-quarter-and-2021-financial
    gregoriusmwatto_cobra
  • Reply 7 of 21
    mpantonempantone Posts: 1,903member
    melgross said:
    JP234 said:
    Growing earnings organically by making great products that everyone wants, rather than buying other companies? What a concept! Too bad some other S&P 500 corporations haven't learned this lesson. The great Magellan Fund manager Peter Lynch had a name for growth by acquisition: "Diworsification."
    Do you know what type of companies Apple buys? Other than two exceptions, it small, usually unknown companies with some software if hardware that Apple needs for their products. It’s almost never to buy an actual product. The only time Apple really did that in a big way was buying Next and Beats. Otherwise they bought small software companies for their software, but totally changed for their use.
    Apple didn't buy NeXT for the hardware which was discontinued in 1993 (the company renamed from NeXT Computer to NeXT Software) -- three years before Apple's acquisition. The acquisition was primarily for engineering talent and software IP. Some NeXTSTEP concepts ended up in OS X but the hardware certainly wasn't the reason.

    Note that there was a mysterious two-year delay between OS X Server 1.0 in 1999 and the initial desktop OS X release in 2001. There were persistent rumors that the delay was caused by a Jobs-enforced internal mandate that OS X run on x86 hardware. In 2006, Apple made the transition to Intel CPUs, presumably because they had been running OS X on x86 for years.

    It's highly disputable that Apple bought Beats for the hardware either. They really bought it for the brand/market presence to compete with Samsung for the youth market. Dr. Dre's name and likeness was worth way more than the hardware. Heck, Apple recently killed off the arguably best Beats hardware product: the Pill speaker.
    edited August 8 dewmeronnjony0byronlwatto_cobra
  • Reply 8 of 21
    felix01felix01 Posts: 282member
    If they stop buying companies, look for a huge increase in IP lawsuits as Apple tries to develop new technologies in-house without stepping on existing patents. 
    watto_cobra
  • Reply 9 of 21
    melgross said:
    JP234 said:
    Growing earnings organically by making great products that everyone wants, rather than buying other companies? What a concept! Too bad some other S&P 500 corporations haven't learned this lesson. The great Magellan Fund manager Peter Lynch had a name for growth by acquisition: "Diworsification."
    Do you know what type of companies Apple buys? Other than two exceptions, it small, usually unknown companies with some software if hardware that Apple needs for their products. It’s almost never to buy an actual product. The only time Apple really did that in a big way was buying Next and Beats. Otherwise they bought small software companies for their software, but totally changed for their use.
    Apple sold Next products?
  • Reply 10 of 21
    mpantone said:
    melgross said:
    JP234 said:
    Growing earnings organically by making great products that everyone wants, rather than buying other companies? What a concept! Too bad some other S&P 500 corporations haven't learned this lesson. The great Magellan Fund manager Peter Lynch had a name for growth by acquisition: "Diworsification."
    Do you know what type of companies Apple buys? Other than two exceptions, it small, usually unknown companies with some software if hardware that Apple needs for their products. It’s almost never to buy an actual product. The only time Apple really did that in a big way was buying Next and Beats. Otherwise they bought small software companies for their software, but totally changed for their use.
    Apple didn't buy NeXT for the hardware which was discontinued in 1993 (the company renamed from NeXT Computer to NeXT Software) -- three years before Apple's acquisition. The acquisition was primarily for engineering talent and software IP. Some NeXTSTEP concepts ended up in OS X but the hardware certainly wasn't the reason.

    Note that there was a mysterious two-year delay between OS X Server 1.0 in 1999 and the initial desktop OS X release in 2001. There were persistent rumors that the delay was caused by a Jobs-enforced internal mandate that OS X run on x86 hardware. In 2006, Apple made the transition to Intel CPUs, presumably because they had been running OS X on x86 for years.

    It's highly disputable that Apple bought Beats for the hardware either. They really bought it for the brand/market presence to compete with Samsung for the youth market. Dr. Dre's name and likeness was worth way more than the hardware. Heck, Apple recently killed off the arguably best Beats hardware product: the Pill speaker.
    I always just associated Beats with HP laptops.
    watto_cobra
  • Reply 11 of 21
    entropysentropys Posts: 3,608member
    I am coming to the conclusion Apple has become too big. It is not the company it used to be.
  • Reply 12 of 21
    mpantonempantone Posts: 1,903member
    entropys said:
    It is not the company it used to be.
    Neither is IBM. Nor GE. Nor Nintendo. Nor Microsoft.

    No company lives in an immutable dreamworld bubble. Even Kyoto's Aritsugu knife shop (established 1560) has electric lights, a telephone, and a website. If they take credit cards today, that's a new development in the past five years.

    Remember that in 1997 Apple was near bankruptcy. A portable music player helped their finances but what really turned them around was this thing called an iPhone.

    Apple wouldn't be around if it stayed the same as it was 25 years ago. Don't forget that IBM was the merger of two 19th century companies that originally made scales.

    Companies have to evolve for the times because the world won't stand still.

    If you don't like the way Apple is being run, write them a letter. It'll help a bit if you're a shareholder and it'll help a bit more if you're a REALLY BIG shareholder. Then get elected to Apple's board of directors if you really want to make changes at Apple.
    edited August 8 sconosciutothtjony0byronlwatto_cobra
  • Reply 13 of 21
    melgrossmelgross Posts: 33,299member
    mpantone said:
    melgross said:
    JP234 said:
    Growing earnings organically by making great products that everyone wants, rather than buying other companies? What a concept! Too bad some other S&P 500 corporations haven't learned this lesson. The great Magellan Fund manager Peter Lynch had a name for growth by acquisition: "Diworsification."
    Do you know what type of companies Apple buys? Other than two exceptions, it small, usually unknown companies with some software if hardware that Apple needs for their products. It’s almost never to buy an actual product. The only time Apple really did that in a big way was buying Next and Beats. Otherwise they bought small software companies for their software, but totally changed for their use.
    Apple didn't buy NeXT for the hardware which was discontinued in 1993 (the company renamed from NeXT Computer to NeXT Software) -- three years before Apple's acquisition. The acquisition was primarily for engineering talent and software IP. Some NeXTSTEP concepts ended up in OS X but the hardware certainly wasn't the reason.

    Note that there was a mysterious two-year delay between OS X Server 1.0 in 1999 and the initial desktop OS X release in 2001. There were persistent rumors that the delay was caused by a Jobs-enforced internal mandate that OS X run on x86 hardware. In 2006, Apple made the transition to Intel CPUs, presumably because they had been running OS X on x86 for years.

    It's highly disputable that Apple bought Beats for the hardware either. They really bought it for the brand/market presence to compete with Samsung for the youth market. Dr. Dre's name and likeness was worth way more than the hardware. Heck, Apple recently killed off the arguably best Beats hardware product: the Pill speaker.
    Yes, we all know that. Thanks for telling us the obvious. I didn’t say they bought Next for the hardware. We’ve discussed this dozens of times over the years.

    the reason for the delay is also well known. They had to take Nextstep and change it to a Mac UI and software convention, including many API changes and additions. Also there was a controversy at first as NextStep was basically just lists in the Desktop. Apple had to add icon views as well, which Jobs resisted at first. 

    This is all well known. I could give you the history of that, week by week just from memory.

    apple mostly bought Beats for the subscription software and the value of the founders, both of whom were regarded as geniuses in the industry. But the subscription software was nascent at the time and didn’t have much value by itself. Both Jimmy Lovine and Dr. Dre were the biggest reasons. But the headphone business was the biggest in the world, about equal to all other serious headphone manufacturers put together, and highly profitable. I doubt Apple would have paid $3.2 billion if it were not.
    edited August 8 sconosciutojony0watto_cobra
  • Reply 14 of 21
    melgrossmelgross Posts: 33,299member
    melgross said:
    JP234 said:
    Growing earnings organically by making great products that everyone wants, rather than buying other companies? What a concept! Too bad some other S&P 500 corporations haven't learned this lesson. The great Magellan Fund manager Peter Lynch had a name for growth by acquisition: "Diworsification."
    Do you know what type of companies Apple buys? Other than two exceptions, it small, usually unknown companies with some software if hardware that Apple needs for their products. It’s almost never to buy an actual product. The only time Apple really did that in a big way was buying Next and Beats. Otherwise they bought small software companies for their software, but totally changed for their use.
    Apple sold Next products?
    You don’t know Apple’s history? They bought Next for the modern OS after their own Copland project failed.
    sconosciutothtjony0watto_cobra
  • Reply 15 of 21
    lukeilukei Posts: 370member
    mpantone said:
    melgross said:
    JP234 said:
    Growing earnings organically by making great products that everyone wants, rather than buying other companies? What a concept! Too bad some other S&P 500 corporations haven't learned this lesson. The great Magellan Fund manager Peter Lynch had a name for growth by acquisition: "Diworsification."
    Do you know what type of companies Apple buys? Other than two exceptions, it small, usually unknown companies with some software if hardware that Apple needs for their products. It’s almost never to buy an actual product. The only time Apple really did that in a big way was buying Next and Beats. Otherwise they bought small software companies for their software, but totally changed for their use.
    Apple didn't buy NeXT for the hardware which was discontinued in 1993 (the company renamed from NeXT Computer to NeXT Software) -- three years before Apple's acquisition. The acquisition was primarily for engineering talent and software IP. Some NeXTSTEP concepts ended up in OS X but the hardware certainly wasn't the reason.

    Note that there was a mysterious two-year delay between OS X Server 1.0 in 1999 and the initial desktop OS X release in 2001. There were persistent rumors that the delay was caused by a Jobs-enforced internal mandate that OS X run on x86 hardware. In 2006, Apple made the transition to Intel CPUs, presumably because they had been running OS X on x86 for years.

    It's highly disputable that Apple bought Beats for the hardware either. They really bought it for the brand/market presence to compete with Samsung for the youth market. Dr. Dre's name and likeness was worth way more than the hardware. Heck, Apple recently killed off the arguably best Beats hardware product: the Pill speaker.


    Apple bought Beats for the streaming service. Music is core to Apple and they needed their own service rather than cede their customers to Spotify. 

  • Reply 16 of 21
    crowleycrowley Posts: 10,363member
    melgross said:
    melgross said:
    JP234 said:
    Growing earnings organically by making great products that everyone wants, rather than buying other companies? What a concept! Too bad some other S&P 500 corporations haven't learned this lesson. The great Magellan Fund manager Peter Lynch had a name for growth by acquisition: "Diworsification."
    Do you know what type of companies Apple buys? Other than two exceptions, it small, usually unknown companies with some software if hardware that Apple needs for their products. It’s almost never to buy an actual product. The only time Apple really did that in a big way was buying Next and Beats. Otherwise they bought small software companies for their software, but totally changed for their use.
    Apple sold Next products?
    You don’t know Apple’s history? They bought Next for the modern OS after their own Copland project failed.
    They also sold WebObjects for a good while, and included it with Mac OS X Server.
  • Reply 17 of 21
    JP234JP234 Posts: 219member
    melgross said:
    JP234 said:
    Growing earnings organically by, rather than buying other companies? What a concept! Too bad some other S&P 500 corporations haven't learned this lesson. The great Magellan Fund manager Peter Lynch had a name for growth by acquisition: "Diworsification."
    Do you know what type of companies Apple buys? Other than two exceptions, it small, usually unknown companies with some software if hardware that Apple needs for their products. It’s almost never to buy an actual product. The only time Apple really did that in a big way was buying Next and Beats. Otherwise they bought small software companies for their software, but totally changed for their use.
    I do know whar type of companies Apple buys. I retired from Apple in 2014 after 14 years as regional third party party purchasing manager. The companies Apple buys are targeted for strategic synergies rather than aggregation of unrelated or duplicative businesses. And when I wrote making "great products that everyone wants" Apple was the very company I was writing about! Buying NeXt was strategic for TWO reasons: access to the NeXt OS, which became OSX, and renewed relations with Steve Jobs, who saved Apple from becoming the next Sun Microsystems (R.I.P. 2010), or worse, being acquired by Sun or even Microsoft. The Beats acquisition is a bit more problematic for me, but it fits right into Job's philosophy, "Don't be afraid to cannibalize your own products. If you don't, someone else will." People were already buying Beats, but now Apple gets the profits, instead of competing with them.
    sconosciutowatto_cobra
  • Reply 18 of 21
    mcdavemcdave Posts: 1,919member
    I guess the militant work-from-homers make potential downsizing easy too.
    watto_cobra
  • Reply 19 of 21
    melgrossmelgross Posts: 33,299member
    crowley said:
    melgross said:
    melgross said:
    JP234 said:
    Growing earnings organically by making great products that everyone wants, rather than buying other companies? What a concept! Too bad some other S&P 500 corporations haven't learned this lesson. The great Magellan Fund manager Peter Lynch had a name for growth by acquisition: "Diworsification."
    Do you know what type of companies Apple buys? Other than two exceptions, it small, usually unknown companies with some software if hardware that Apple needs for their products. It’s almost never to buy an actual product. The only time Apple really did that in a big way was buying Next and Beats. Otherwise they bought small software companies for their software, but totally changed for their use.
    Apple sold Next products?
    You don’t know Apple’s history? They bought Next for the modern OS after their own Copland project failed.
    They also sold WebObjects for a good while, and included it with Mac OS X Server.
    Yes. I was related to the business. WebObjects was part of the founding of the internet after all.
    watto_cobra
  • Reply 20 of 21
    melgrossmelgross Posts: 33,299member
    JP234 said:
    melgross said:
    JP234 said:
    Growing earnings organically by, rather than buying other companies? What a concept! Too bad some other S&P 500 corporations haven't learned this lesson. The great Magellan Fund manager Peter Lynch had a name for growth by acquisition: "Diworsification."
    Do you know what type of companies Apple buys? Other than two exceptions, it small, usually unknown companies with some software if hardware that Apple needs for their products. It’s almost never to buy an actual product. The only time Apple really did that in a big way was buying Next and Beats. Otherwise they bought small software companies for their software, but totally changed for their use.
    I do know whar type of companies Apple buys. I retired from Apple in 2014 after 14 years as regional third party party purchasing manager. The companies Apple buys are targeted for strategic synergies rather than aggregation of unrelated or duplicative businesses. And when I wrote making "great products that everyone wants" Apple was the very company I was writing about! Buying NeXt was strategic for TWO reasons: access to the NeXt OS, which became OSX, and renewed relations with Steve Jobs, who saved Apple from becoming the next Sun Microsystems (R.I.P. 2010), or worse, being acquired by Sun or even Microsoft. The Beats acquisition is a bit more problematic for me, but it fits right into Job's philosophy, "Don't be afraid to cannibalize your own products. If you don't, someone else will." People were already buying Beats, but now Apple gets the profits, instead of competing with them.
    That’s very different to what your first post was saying. But Apple never buys companies, and by that, obviously large companies, to give a major lift to sales directly from the other company’s own sales. Sometimes I wish they would, and it’s a big mistake, for example, to not buy a leading game design outfit. That was the way Microsoft was able to get into the business.
    watto_cobra
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