Why Apple, Inc. is keeping the identity of many of its 23 recent acquisitions a secret

Posted:
in iPhone edited March 2014
Apple has acquired at least 23 firms over the last five quarters, but the purpose--and even the identity--of some of them remains a mystery. This is no accident.

Tim Cook


Speaking to shareholders at a meeting on Friday, Apple's chief executive Tim Cook noted that his company has acquired 23 companies over the last roughly 16 months.

That time frame would appear to exclude all of the known acquisitions reported to have occured within 2012, including Chomp, Redmaticia, AuthenTec and Particle.

Apple's known acquisitions over the past five quarters

For its fiscal year 2013 (the accounting year that ended last September), Apple reported $496 million in net "payments made in connection with business acquisitions." Companies that Apple was reported to have purchased during that period include WiFiSlam, Locationary, HopStop, Passif Semiconductor, Matcha, Embark and AlgoTrim.

During Apple's Q1 2014 (the quarter ending December 2013), the company reported an additional $525 million in cash "payments made in connection with business acquisitions" in its quarterly 10Q filings. That was significantly more than the $496 million it had spent over the previous four quarters combined.

During that quarter, Apple was reported to have snapped up Cue, PrimeSense, Topsy, Broadmap and Catch.

Since the start of calendar 2014, Apple was also reported to have acquired SnappyLabs and Burstly. All together, that makes just 14 companies that Apple is known (or believed) to have acquired over the past five quarters.

Apple's secretive acquisition strategy

Cooks' allusion to "23 companies over 16 months" was made two months into the second fiscal quarter of 2014, and the actual acquisition dates of some companies are not known with precision, making it difficult to pin down exactly which acquisitions Cook was including in his numbers. However, by any measure Apple has managed to buy up at least nine more companies than the investigative and curious media (including AppleInsider) has been able to identify.

Cook made it clear in his comments to shareholders that Apple was not seeking to make the greatest number of acquisitions (or to pay the most money for them), but rather to make smart, strategic purchases whenever the circumstances arose.

Unlike Yahoo, Microsoft, Google and Facebook, Apple rarely ever announces that it has acquired anything. Instead, it typically only selectively acknowledges acquisitions after they've been reported, regularly issuing the boilerplate statement, "Apple buys smaller technology companies from time to time, and we generally do not discuss our purpose or plans."It's no secret that the identity of the companies Apple acquires often makes it apparent why the company bought them.

It's no secret that the identity of the companies Apple acquires often makes it apparent why the company bought them. Previous acquisitions ranging from Siri to LaLa (iTunes Radio) to AuthenTec (Touch ID) helped illuminate what Apple was working to deliver many months in advance.

The fact that a third of Apple's known, recent acquisitions involve maps and transit, for example, makes it obvious that Apple isn't giving up on Maps but rather has ambitious, aggressive plans to keep its offerings competitive with (or superior to) the rival offerings from Google and Nokia.

Cook highlighted Apple's legendary secrecy as being extremely valuable to the company, and it's easy to see why. In addition to the excitement around new products that helps to drive sales, Apple's secrecy also helps to delay the efforts by competitors to copy its products, or to remain credible when claiming that they too were working on the same technologies.

For example, while Microsoft virtually derailed Apple's QuickTime by claiming to have its own suite of video editing tools in development in the mid 1990s ("ActiveMovie" products that ended up being never-released vaporware), Samsung's claim to have a 64-bit phone with a fingerprint scanner under development hasn't had a credible impact on Apple's iPhone 5s sales.

In addition, Apple seeks to keep access to unreleased software within its iOS and OS X developer programs confidential, not to keep secrets from Microsoft and Samsung (both of which have full access to Apple's developer software), but in part to avoid frustrating or disappointing users when planned features end up being delayed or canceled due to unavoidable issues ranging from development timelines to outside patent claims to difficulties in obtaining support for new features from third parties, such as the music rights holders required to make iTunes Radio a success at launch.

Apple's secrecy also aims to avoid distracting its current customers with future products. For example, it's unlikely that the company could have reached $1 billion in Apple TV sales last year if it had been openly floating plans about future living room product concepts that weren't yet ready for sale.

A subsequent article details how Apple actually outspent Google during 2013 to satiate its voracious appetite to acquire talent, technology and production capacity.
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Comments

  • Reply 1 of 265
    Google, Amazon, and to some degree Facebook have become masters at publicizing their tinkering with future, often fanciful gadgets and tech developments, just to promulgate the fantasy that they are truly THE leaders in innovations. Apple will much more likely be the company that actually delivers true, useful, tangible advancements as opposed to these PR factories.
  • Reply 2 of 265
    chipsychipsy Posts: 287member
    Google, Amazon, and to some degree Facebook have become masters at publicizing their tinkering with future, often fanciful gadgets and tech developments, just to promulgate the fantasy that they are truly THE leaders in innovations. Apple will much more likely be the company that actually delivers true, useful, tangible advancements as opposed to these PR factories.

    Are you actually denying that Google is an innovative company? Google and Apple are both innovative companies in their own right and to state that Apple is the only "company that actually delivers true, useful, tangible advancements as opposed to these PR factories" is just pure nonsense. And Apple is one giant PR factory (among the largest out there) when they release something. At this moment in time it can be argued that Google is actually the more innovative company of the two with Apple sticking to their already established products and gradually evolving while Google is thinking out of the box.
  • Reply 3 of 265

    I'm very excited to see the fruits of these acquisitions (applets) this year.

  • Reply 4 of 265
    stefstef Posts: 87member
    Apple keeps them guessing. Look at all the flopsweated, overheated attempts at a watch. Like slugs trying to grow wings. Ha.
  • Reply 5 of 265
    Dude, google is totally innovative. Ok, so first they invented internet search. Then after that, free gmail, you cannot take that away from them. Youtube, definitely an innovation for google to have bought Youtube. google plus, with innovative circles for sharing and emailing your friends, another win. Plus we know they have got cameras on tricycles on college campuses to make maps even where people walk, plus driverless cars and google glasses. Even though these are not products they are even more innovative than all the other things. Don't diss the goog, dudes!
  • Reply 6 of 265
    jameskatt2jameskatt2 Posts: 720member
    Apple almost never talks about future products or plans.

    The only information you get are rumors and speculation from third parties like ANALysts and PUNDits.
  • Reply 7 of 265
    @chipsy. I agree that all these companies are aggressively working on a lot of great innovations. I am just saying that Google and Amazon play the free publicity card to the hilt (as opposed to Apple), to feather their "innovation-star" perceptions in the minds of the public and Wall Street, irrespective of criticism as to the feasibility or actual utility of the projects in question. Naturally the tech press is constantly looking for sexy, headline grabbing stories about fanciful, if not superficial new projects, so these companies have learned how to fill the news vacuum. For example, look at the timing of Jeff Bezos' talking about future drone package delivery on 60 minutes, four days before Black Friday. Great (accidental? hehe) timing for mountains of free publicity! Apple's approach is different as they prefer to work and acquire in secrecy. But the market perceives all this as somehow Apple's being bereft of new ideas, especially since the death of Steve Jobs. But as SJ said himself, it is not good form to have a ship that leaks from the top.
  • Reply 8 of 265
    Quote:

    Originally Posted by DogCowabunga View Post



    Dude, google is totally innovative. Ok, so first they invented internet search. Then after that, free gmail, you cannot take that away from them. Youtube, definitely an innovation for google to have bought Youtube. google plus, with innovative circles for sharing and emailing your friends, another win. Plus we know they have got cameras on tricycles on college campuses to make maps even where people walk, plus driverless cars and google glasses. Even though these are not products they are even more innovative than all the other things. Don't diss the goog, dudes!

    I'm not so sure about Google being innovative. Certainly they have made their money, and continue to do so on advertising embedded in search, maps most definitely, and high speed internet backbones in major cities (so they can easily scrape user content as it goes through their network infrastructure). But, in many ways, they remind me of Xerox, who did not and could not productize the ideas of their skunkworks group PARC, leaving the ideas to Apple and others to deliver on. 

  • Reply 9 of 265
    cfuglecfugle Posts: 34member
    "Dude, google is totally innovative. Ok, so first they invented internet search. Then after that, free gmail, you cannot take that away from them."-dogcowabunga

    Sorry dogcowabunga, Google did not invent internet searching Alta Vista was the leader long before then. Also Hotmail as a private company started in 1996 where as Google's Gmail in 2004 as a private invitation only beta. I agree Google has it's hands into hindreds of tech projects but how many come to fruition? How many last more than 2-3 years before the beta status is cancelled along with the project. Google is not and probably never will be a product company like Apple. Google sells services and advertising. Everything else is just a new wrapper for that...
  • Reply 10 of 265
    tallest skiltallest skil Posts: 43,399member
    Originally Posted by cfugle View Post

    "Dude, google is totally innovative. Ok, so first they invented internet search. Then after that, free gmail, you cannot take that away from them."-dogcowabunga

     

    Two! Two people that can’t read sarcasm! Ah ah ah! ;)

  • Reply 11 of 265
    bobschlobbobschlob Posts: 1,074member
    Quote:

    Originally Posted by Chipsy View Post

     
    Quote:

    Originally Posted by Jared Porter View Post



    Google, Amazon, and to some degree Facebook have become masters at publicizing their tinkering with future, often fanciful gadgets and tech developments, just to promulgate the fantasy that they are truly THE leaders in innovations. Apple will much more likely be the company that actually delivers true, useful, tangible advancements as opposed to these PR factories.




    Are you actually denying that Google is an innovative company? Google and Apple are both innovative companies in their own right and to state that Apple is the only "company that actually delivers true, useful, tangible advancements as opposed to these PR factories" is just pure nonsense. And Apple is one giant PR factory (among the largest out there) when they release something. At this moment in time it can be argued that Google is actually the more innovative company of the two with Apple sticking to their already established products and gradually evolving while Google is thinking out of the box.

    …He says, without siting even just a single example.

  • Reply 12 of 265
    bobschlobbobschlob Posts: 1,074member
    Quote:

    Originally Posted by waldobushman View Post

     
    Quote:
    Originally Posted by DogCowabunga View Post



    Dude, google is totally innovative. Ok, so first they invented internet search. Then after that, free gmail, you cannot take that away from them. Youtube, definitely an innovation for google to have bought Youtube. google plus, with innovative circles for sharing and emailing your friends, another win. Plus we know they have got cameras on tricycles on college campuses to make maps even where people walk, plus driverless cars and google glasses. Even though these are not products they are even more innovative than all the other things. Don't diss the goog, dudes!

    I'm not so sure about Google being innovative. Certainly they have made their money, and continue to do so on advertising embedded in search, maps most definitely, and high speed internet backbones in major cities (so they can easily scrape user content as it goes through their network infrastructure). But, in many ways, they remind me of Xerox, who did not and could not productize the ideas of their skunkworks group PARC, leaving the ideas to Apple and others to deliver on. 


     

    Yeah, pretty sure DogCowabunga just left off the sarcasm tag.

  • Reply 13 of 265
    chipsychipsy Posts: 287member
    bobschlob wrote: »
    …He says, without siting [SIZE=16px]even [/SIZE]<span style="font-size:16px;line-height:1.4em;">just a single example.</span>

    If that response was meant for me how about these: Project Ara, Project Loon, Google's Glucose Lens,...
  • Reply 14 of 265
    foadfoad Posts: 708member
    Quote:

    Originally Posted by Chipsy View Post





    Are you actually denying that Google is an innovative company? Google and Apple are both innovative companies in their own right and to state that Apple is the only "company that actually delivers true, useful, tangible advancements as opposed to these PR factories" is just pure nonsense. And Apple is one giant PR factory (among the largest out there) when they release something. At this moment in time it can be argued that Google is actually the more innovative company of the two with Apple sticking to their already established products and gradually evolving while Google is thinking out of the box.

     

    Google hasn't had any true success with any of their innovations outside of search. Every one of their products prop up their advertising business, and that includes Android. Android wasn't a leading innovation...heck, they scrapped their original plans for it once the iPhone came out and followed Apple's footsteps. I'm not talking about some features that Apple and Google copied from each other, but the underlying theory of what a mobile OS should be. That is where the innovation was, and Google was the follower. Furthermore, Android's success stemmed from Microsoft's incompetence and the fact that it was free. Microsoft actually did something unique with Windows Phone, they just did it too late.

     

    Google spends more money on generating ad revenue (i.e., they pay Apple and others to have Google be the default and per search) than they do on R&D, and every year those acquisition costs go higher and per click revenue goes down. Sure, Google is more forthcoming regarding their experiments and acquisitions, but you can't measure innovation with what you cook up in your R&D labs and put out in a press release.

     

    Having said all that, Google has been working on branching out of their roots, and we'll see where that leads them, but just because you can't see Apple's stuff in the labs, doesn't mean they aren't innovating.

  • Reply 15 of 265
    bobschlobbobschlob Posts: 1,074member
    Quote:

    Originally Posted by Chipsy View Post

     
    Quote:

    Originally Posted by BobSchlob View Post



    …He says, without siting even just a single example.




    If that response was meant for me how about these: Project Ara, Project Loon, Google's Glucose Lens,...

    No no. I want actual finished products.

    I mean, seriously… You're not suggesting that Apple doesn't have any projects of the type you are sighting, are you? That would be laughable. Everybody knows that Apple keeps everything they work on under top secret. THAT is the difference.

  • Reply 16 of 265
    chipsychipsy Posts: 287member
    foad wrote: »
    Google hasn't had any true success with any of their innovations outside of search. Every one of their products prop up their advertising business, and that includes Android. Android wasn't a leading innovation...heck, they scrapped their original plans for it once the iPhone came out and followed Apple's footsteps. I'm not talking about some features that Apple and Google copied from each other, but the underlying theory of what a mobile OS should be. That is where the innovation was, and Google was the follower. Furthermore, Android's success stemmed from Microsoft's incompetence and the fact that it was free. Microsoft actually did something unique with Windows Phone, they just did it too late.

    Google spends more money on generating ad revenue (i.e., they pay Apple and others to have Google be the default and per search) than they do on R&D, and every year those acquisition costs go higher and per click revenue goes down. <span style="line-height:1.4em;">Sure, Google is</span>
    <span style="line-height:1.4em;"> more forthcoming regarding their experiments and acquisitions, but you can't measure innovation with what you cook up in your R&D labs and put out in a press release.</span>


    Having said all that, Google has been working on branching out of their roots, and we'll see where that leads them, but just because you can't see Apple's stuff in the labs, doesn't mean they aren't innovating.

    Oh nobody is stating that Android was an innovation. But I would like to correct one misunderstanding, there were actually two versions being developed a Sooner (more blackberry like and less ambitious phone/OS that would be ready sooner) and a Dreamer (a touch interface OS and smartphone). Andy Rubin's quote “Holy crap, I guess we’re not going to launch that phone.” was taken out off context as he was talking about the Sooner. Thus the iPhone definitely focused the development of Android but it's not like everything needed to be turned around.

    But that aside. Your comment makes it sound as if you think something can only be an innovation if it is a financial/commercial success. I wholeheartedly disagree, many of the worlds most innovative ideas or products never became a commercial success.
  • Reply 17 of 265
    asciiascii Posts: 5,941member

    Even if you don't know what the acquisitions are, you can still draw one conclusion just by the a sheer number, namely: they can't all be for one project, it's just too many. 

     

    Therefore I hope they're not doing a Google and just trying their hand at everything under the sun: TV, car, watch, medical... That's what you do when you don't have a visionary with a gut feel for what's next.

  • Reply 18 of 265
    aaronjaaronj Posts: 1,595member
    Quote:

    Originally Posted by Chipsy View Post





    If that response was meant for me how about these: Project Ara, Project Loon, Google's Glucose Lens,...

     

    Isn't every single one of those vapor ware currently?  And any company that derives 90%+ of revenues from advertising is only ever going to be so innovative.  

     

    Anyways, the way people toss the word "innovate" around has made it nearly completely meaningless.  

  • Reply 19 of 265
    chipsychipsy Posts: 287member
    bobschlob wrote: »
    No no. I want actual finished products.
    I mean, seriously… You're not suggesting that Apple doesn't have any projects of the type you are sighting, are you? That would be laughable. Everybody knows that Apple keeps everything they work on under top secret. THAT is the difference.
    How about Google Now, certainly an innovation in it's own right (it won the innovation of the year award from popular science magazine), Project Ara is pretty much finished and is ready for developers to start creating modules and will be released next year, Google Street view, Google Fiber,...

    But the idea that innovations need to be 100% public ready and launched to have influence is absolute bull.
  • Reply 20 of 265
    steven n.steven n. Posts: 1,226member
    chipsy wrote: »
    Are you actually denying that Google is an innovative company? Google and Apple are both innovative companies in their own right and to state that Apple is the only "company that actually delivers true, useful, tangible advancements as opposed to these PR factories" is just pure nonsense. And Apple is one giant PR factory (among the largest out there) when they release something. At this moment in time it can be argued that Google is actually the more innovative company of the two with Apple sticking to their already established products and gradually evolving while Google is thinking out of the box.

    Interesting reading comprehension issues. Taking a "most likely" to an absolute "only". Do you deny that Google and Amazon endlessly talk about future products that may never be available?
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