Apple buying small companies every other month but constantly evaluating larger acquisitions

Posted:
in General Discussion edited January 2014
Speaking at Goldman Sachs' Technology and Internet Conference on Tuesday, Apple CEO Tim Cook pointed to the company's "deliberate, thoughtful" mantra as a reason it doesn't typically acquire large companies but admitted it's not opposed to such purchases if the right one comes along.

Tim Cook


Instead, Cook noted how Apple has actively been acquiring smaller companies that it finds as a better fit.

"If you look at the past three years," Cook said, "we've averaged about an acquisition every other month. They're companies where they have really smart people and/or IP. Generally speaking, we've been in many cases taking something they're working on and move the skills to work on something else."

Cook went on to cite the example of Apple's acquisition of PA Semiconductor.

"This was an incredibly skilled group of guys, and they could supplement an incredible group of folks and they were working on PowerPC at the time. We didn't have an interest in that, so we moved the skills to work on our iPhone and other engines. We will do more of those."

As to large companies, Cook said the company's patient and deliberate approach to acquisitions typically precluded such purchases, despite Apple's cash holdings in excess of $125 billion.

"We have looked at large companies. In each case, it didn't pass our test. Will we look at more? I think so. But we're disciplined and thoughtful, and we don't feel a pressure to go out and acquire revenue. We want to make great products. If a large company could help us, then that would be of interest. But, again: Deliberate, thoughtful is our mantra."
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Comments

  • Reply 1 of 35


    "Deliberate, thoughtful" is our mantra. 


     


    LOVE hearing this. 


     


    It was Steve's as well.

  • Reply 2 of 35

    Quote:

    Originally Posted by AppleInsider View Post



    Deliberate, thoughtful is our mantra.


     


    As opposed to, "Gosh, I just bought Motorola for $12.5 Billion. No idea what we'll do with it, but, hey, I couldn't stop myself."

  • Reply 3 of 35
    rob53rob53 Posts: 2,919member


    I hope you're going to report on the other things Cook talked about, including his initial slam on Greenlight. What I find remarkable is that Cook and Apple continue to push support for their customers above all else. They want to provide products and all the garbage supposed investors are spewing is being pushed to the side, as it should be. I support Apple by buying their products and helping others who do as well. I do not support the fanatic stock market or any of those insane people who feel Apple owes them money because they trade. Apple doesn't need that money, they have enough of their own and the people who buy Apple products gave Apple that money. No investment fund ever helped Apple sell anything or provide Apple with any money to sell.


     


    I don't own any Apple stock but I'm definitely long on Apple.

  • Reply 4 of 35
    nealgnealg Posts: 132member


    Sounds very reasonable to me on the big acquisition front.


     


    On the small company front, with what Cook says they are doing, I am wondering how long the lockup period for key employees to stay on board?


     


    I also hope they discuss with the company what plans they have for them. It would be a terrible shock to get bought for doing one thing and then find out you are going to be doing something else. I would think that is something that Apple would have to do in order to keep the new employees happy. 


     


    While this thoughtful approach is a good one to take, it may also lead to some companies slipping away. I remember about 2 years ago, Apple was in some preliminary talks with the company that had the Kinect technology that eventually got bought out by MSFT. You may lose some opportunities but overall, I think the Apple approach is the better one to take. You make fewer costly mistakes that lead to a less happy company.

  • Reply 5 of 35
    jragostajragosta Posts: 10,473member
    quadra 610 wrote: »
    "Deliberate, thoughtful" is our mantra. 

    LOVE hearing this. 

    It was Steve's as well.

    The problem is that Wall Street doesn't want deliberate and thoughtful. Stock's down again today - almost 2% - because Cook said that they won't make crappy products and that Apple doesn't rely solely on hardware to generate revenues.

    Wall Street is full of idiots.
  • Reply 6 of 35
    anonymouse wrote: »
    As opposed to, "Gosh, I just bought Motorola for $12.5 Billion. No idea what we'll do with it, but, hey, I couldn't stop myself."

    Here's their game plan:
    1. Run it as a separate company
    2. Lose money
    3. Sue competitors using Motorola patents
  • Reply 7 of 35
    jragosta wrote: »
    The problem is that Wall Street doesn't want deliberate and thoughtful. Stock's down again today - almost 2% - because Cook said that they won't make crappy products and that Apple doesn't rely solely on hardware to generate revenues.

    Wall Street is full of idiots.

    If Wall St analysts ran Apple, they'd push out the creative types, make a quick buck using the brand's allure, and when it's all rotted out and no longer creditworthy, they'll sell the carcass in pieces to competitors to repay the creditors they stole from.
  • Reply 8 of 35


    Originally Posted by Suddenly Newton View Post

    Here's their game plan:

    1. Run it as a separate company

    2. Lose money

    3. Sue competitors using Motorola patents


     


    4. Profit!


     


    Wait…

  • Reply 9 of 35
    rogifanrogifan Posts: 10,669member


    And the stock is down almost 2%.  I guess Wall Street won't be satisfied unless Apple starts doing things just to grow the top line (whether it makes good business sense or is profitable doesn't matter).

  • Reply 10 of 35
    irelandireland Posts: 17,780member
    Twitter, Sky Sports, ESPN.
  • Reply 11 of 35
    rogifanrogifan Posts: 10,669member

    Quote:

    Originally Posted by jragosta View Post





    The problem is that Wall Street doesn't want deliberate and thoughtful. Stock's down again today - almost 2% - because Cook said that they won't make crappy products and that Apple doesn't rely solely on hardware to generate revenues.



    Wall Street is full of idiots.


    I honestly don't get Wall Street.   What exactly did they expect Cook to say today?  He's not going to give details on product roadmap.  And if there are larger acquisitions they're thinking about he's not going to announce anything at a Goldman Sachs conference.  Same thing with a lower cost iPhone.  If Wall Street didn't know this before Cook spoke then they really are idiots.  As far as Cook's comment that Apple isn't a hardware company, I think that was to distinguish from Samsung without mentioning them by name.  And to remind people that even if there's pressure from companies flooding the market with cheap hardware Apple has other avenues for generating revenues and growth.

  • Reply 12 of 35
    Wall Street's love affair with Amazon says it all.
  • Reply 13 of 35

    Quote:

    Originally Posted by rob53 View Post


    I hope you're going to report on the other things Cook talked about, including his initial slam on Greenlight. What I find remarkable is that Cook and Apple continue to push support for their customers above all else. They want to provide products and all the garbage supposed investors are spewing is being pushed to the side, as it should be. I support Apple by buying their products and helping others who do as well. I do not support the fanatic stock market or any of those insane people who feel Apple owes them money because they trade. Apple doesn't need that money, they have enough of their own and the people who buy Apple products gave Apple that money. No investment fund ever helped Apple sell anything or provide Apple with any money to sell.


     


    I don't own any Apple stock but I'm definitely long on Apple.



     


    Last year, we replaced all the grandkids phones with new iPhones -- They had various feature phones and SIMless hand-me-down iPhones used as as iPods.


     


    The 3 kids would lose or break, on average, of two phones per year,


     


    Last night, the oldest (my 17-year-old granddaughter) said:  "At first I didn't want an iPhone for a phone -- I was afraid it would break and it was kind of cool to get a new phone when the old one broke.  I am so glad you got me an iPhone (4) -- it is so much better than the crummy phones my friends have".


     


    That made my daughter's and my day!

  • Reply 14 of 35
    No wonder I have zero faith in the stock market, bunch of damned parasitic so-and-sos. :rolleyes:

    To echo the herd, I'm really hoping they drive the stock price down far enough that Tim can take the company private again...
  • Reply 15 of 35


    Every other month? So that would be 6 acquisitions in the last year? Interesting that we have not heard about all of them. The technorati spends time speculating (and even rendering or mocking up) what non-existent Apple products might look like, but they miss out on real events like acquisitions.

  • Reply 16 of 35

    Quote:

    Originally Posted by Stoobs View Post



    No wonder I have zero faith in the stock market, bunch of damned parasitic so-and-sos. image



    To echo the herd, I'm really hoping they drive the stock price down far enough that Tim can take the company private again...


    That would be good for stockholders?

  • Reply 17 of 35
    slurpyslurpy Posts: 5,348member
    "We have looked at large companies. In each case, it didn't pass our test. Will we look at more? I think so. But we're disciplined and thoughtful, and we don't feel a pressure to go out and acquire revenue. We want to make great products. If a large company could help us, then that would be of interest. But, again: Deliberate, thoughtful is our mantra."

    It's quotes like this that reassure me that Cook has the right philosophy.
  • Reply 18 of 35

    Quote:

    Originally Posted by Ireland View Post



    Twitter, Sky Sports, ESPN.


     


    Mmm... AFAICT, ESPN is owned by Disney and worth about $40 Billion... 


     


    http://www.forbes.com/sites/kurtbadenhausen/2012/11/09/why-espn-is-the-worlds-most-valuable-media-property-and-worth-40-billion/


     


    What a coup it would if Apple/Disney could bring live sports and news to AppleTV.

  • Reply 19 of 35
    stelligent wrote: »
    That would be good for stockholders?

    *shrug* Probably not, but then it'd also be the fault of nothing other than the system itself.

    Fix the broken system and both issues go away.
  • Reply 20 of 35
    gatorguygatorguy Posts: 23,365member

    Quote:

    Originally Posted by Suddenly Newton View Post





    Here's their game plan:

    1. Run it as a separate company

    2. Lose money

    3. Sue competitors using Motorola patents


    I don't think Google is pursuing any new litigation against any competitor since taking over Motorola, much less using Moto IP to do so.


     


    There's a few inherited lawsuits to be finished up. With suits and countersuits involved that neither Apple nor Microsoft signaled a willingness to drop I can't imagine you think Google should tell Moto to drop those old IP claims filed well before Google even made a purchase offer. That doesn't sound at all wise without commitments from those two to do the same.

     

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