Apple Becoming More Serious About Corporate Acquisitions?

[MacRumors]

http://www.macrumors.com/images/macrumorsthreadlogo.gif (http://www.macrumors.com/2010/01/14/apple-becoming-more-serious-about-corporate-acquisitions/)

BusinessWeek reports (http://www.businessweek.com/magazine/content/10_04/b4164034490635.htm) on Apple's recent acquisitions of Lala Media (http://www.macrumors.com/2009/12/04/apple-acquires-streaming-music-service-lala-media/) and Quattro Wireless (http://www.macrumors.com/2010/01/05/apples-purchase-of-quattro-wireless-confirmed/), noting that the moves may be part of a broader strategy by the company to utilize its vast cash hoard to increase its historically low frequency of such acquisitions.

In particular, the report notes that Apple last year hired Goldman Sachs investment banker Adrian Perica to assist with such deals. The hiring of Perica, who is believed to be the first dedicated mergers & acquisitions specialist on Apple's staff, reportedly replaces a "super ad hoc" process in which Apple department heads were themselves responsible for building the case for an acquisition and negotiating the terms.Jobs has long preferred for his company to develop technology in-house and avoid the risks that come with integrating other companies into Apple's unique, finely tuned culture. In the past, there was no organized M&A effort, say three former executives at the company. Instead, business chiefs were supposed to keep an eye out for deals and go to Jobs if they thought there was a beneficial one to be made. After getting Jobs' O.K., the champion of the idea would pull together a team to make an overture, negotiate terms, and work through the administrative details. "It was super ad hoc," says one of the former executives.A turning point for Apple was reportedly Google's acquisition (http://www.macrumors.com/2009/11/09/google-to-acquire-mobile-advertising-firm-admob/) of mobile advertising firm AdMob. Apple had reportedly been in discussions (http://www.macrumors.com/2009/11/16/apple-considered-purchasing-admob/) to acquire AdMob itself when Google swooped in and made its deal. Stung by the loss of AdMob to Google, Apple apparently moved quickly in its bid to lock up streaming media firm Lala as Google and others began to get involved.

According to the report, experts believe that Apple is unlikely to engage in any blockbuster acquisition deals, instead relying on the small deals that bring very specific technologies, intellectual property, and talent to the company and that the company has relied on in the past. The addition of Perica and the loss of AdMob to Google's grasp, however, suggest that Apple may be looking to become more aggressive in its pursuit of those companies that fit its needs.

Article Link: Apple Becoming More Serious About Corporate Acquisitions? (http://www.macrumors.com/2010/01/14/apple-becoming-more-serious-about-corporate-acquisitions/)

[Rot'nApple]

Buy me! Buy me! :D

[theheadguy]

I realize many people here (notably people who have joined within the last one or two years) are blown away by Apple's product announcements, but I am fairly bored as of late. Ok -- the slate is coming (or not). Regardless, I'd love to see Apple become extremely aggressive as it relates to acquisitions and start entering even more market segments.

... and am I the only one who thinks the "i" in front of the product names is starting to get really, really lame? It's cool to keep the iPod, iPhone, iTunes, iPhoto, iMovie, iMac, iBook, iDVD but please..... no iSlate....

[Mactagonist]

If I were in charge, Palm and Netflix would be next on the list.

[nzsilverfox]

... Apple quietly buys Kodak ...
;)

[cmaier]

If I were in charge, Palm and Netflix would be next on the list.

Netflix would be very interesting, but not sure how they're streaming (and other) rights transfer to an acquirer.

[rick30324]

Please.

[cvaldes]

If I were in charge, Palm and Netflix would be next on the list.
I would like to know what you think Palm brings to the table. As far as I can tell, Palm has no desirable technology, no mindshare, dwindling marketshare.

As to Netflix, I think Apple can compete with Netflix by building up competitive services in-house.

And as an AAPL stockholder, I'm not keen on Apple acquiring what I see as two over-valued companies. The percentage of shares shorted of float is 31% for Netflix; the market thinks this stock's price is going down.

It's even worse for Palm. The short percentage is a whopping 62%. That's right: more investors think this stock's price is gonna tank than those who think it's going to increase. Palm's financials are ugly as hell (almost $400M of debt?). My guess is if Apple announced that it was going to purchase Palm, the shareholders would not approve the transaction. I certainly wouldn't.

[iChan]

I realize many people here (notably people who have joined within the last one or two years) are blown away by Apple's product announcements, but I am fairly bored as of late. Ok -- the slate is coming (or not). Regardless, I'd love to see Apple become extremely aggressive as it relates to acquisitions and start entering even more market segments.

... and am I the only one who thinks the "i" in front of the product names is starting to get really, really lame? It's cool to keep the iPod, iPhone, iTunes, iPhoto, iMovie, iMac, iBook, iDVD but please..... no iSlate....

You said it bro. It's been pretty lame since the iPhone.

[macduke]

Please.

Yeah, they need to buy someone who makes file transfers easier and MUCH faster. I doubt their new server farm will do much. It just seems like they are inefficient.

In my ideal world, they would also buy Nintendo. As to whether or not that makes business sense: hell if I know?!? I don't even know how much Nintendo costs. I just want all their games and tech melted with everything that makes Apple a great hardware / software designing company. Haha, iWii. Gross. But seriously, I think Apple could seriously clean up in the games space.

[JonHimself]

C'moooooon Dropbox.

Edit: Sorry... missed this one above

Please.

[illustratorDavi]

I would love apple to buy wacom.

Then they can bring the cintiq to the masses, adding a pressure sensitive pen and multitouch to the imac.

[miketcool]

Do us a favor Apple, and acquire a stake at NBC. It'd be nice to compete within the company with MS. Besides, if you saved Conan, I would never again question any of your sketchy corporate antics.

[zoned]

For years I've dreamed of Apple purchasing Adobe Systems...

[gstylez]

They need to buy a company that can take MobileMe to the next level. I mean the only thing I like is the mobile gallery and find your iPhone. Everything else SUCKS. Using your email on the browser has major issues and is slow plus I when I send an email it does not add it to my Sent box. This is a paid service and I expect the mail to be as good as gmail damn it.

[Eddyisgreat]

For years I've dreamed of Apple purchasing Adobe Systems...

Not gonna happen. Adobe is in the process of moving everything to India by "laying" off people stateside and adding an equal number of people overseas. So Apple would have to move everything back lol.

Besides Photoshop / CS sells more on Windows than it does on OS X.

Anyway what I was going to say was:

No use in Apple "blowing their wad" if nothing good is out there.

[Tilpots]

Dish Network or Sprint would be my hope. Not likely, but an end to end Apple experience with no middle man would be wonderful. Not having to deal with a phone or cable company ever again? Priceless.

[kddpop]

i don't want to hack my TV. but i'd really like to watch hulu and stuff. don't know whether boxee would be a valuable asset. perhaps they just need to want to offer those things.

[huntercr]

... Apple quietly buys Kodak ...
;)

That's actually not so unlikely.

The best time to do that would have been in about a year ago... in March of 2009 they were briefly at around $1/share

They aren't profitable at all, and other than these patents I don't think Kodak has anything Apple wants....
I know you were joking, but who kows maybe they'd do it. With 286M shares outstanding, they could easily buy the entire company for $1.3B at the current share price

[huntercr]

Not gonna happen. Adobe is in the process of moving everything to India by "laying" off people stateside and adding an equal number of people overseas. So Apple would have to move everything back lol.

Besides Photoshop / CS sells more on Windows than it does on OS X.

Anyway what I was going to say was:

No use in Apple "blowing their wad" if nothing good is out there.

And you don't want to buy up companies that are making successful products for your existing business. You want to buy companies you *want* to make products for your existing business.

[Rocketman]

Gee, now that it is one of the biggest corporations in the USA and the world, they are becoming serious about "something". Both surprising and appropriate.

Dudes (note lingo), if you want help identifying things that are "insanely great", contact me. I am willing to work for fun (and a % of the deal).

Rocketman

[rdowns]

I don't see a company mentioned in this thread that I think makes sense for Apple to acquire.

Palm- Why? They have nothing Apple needs, not even a desirable patent portfolio.

Adobe - Why? They are not going to stop developing for the Mac platform. Too much of their revenue comes from it. Apple isn't into selling software anymore per se, they're into taking 30% off the top for you to sell your software through their store.

Netflix- Why? Do they do something special in streaming that others do not?

Dropbox- Why? They could certainly develop OS level syncing if they wanted to. I'd love to see it but buying them a waste. I bet 99% of their accounts are 2Gb free accounts.

[lightpeak]

When I see serious, I take it as agressive. And I take agressive as flexing more muscle (like when people say "Google is becoming evil").

[sonicboom]

i don't want to hack my TV. but i'd really like to watch hulu and stuff. don't know whether boxee would be a valuable asset. perhaps they just need to want to offer those things.

There is nothing that boxee has that Apple cannot do better - if they wanted to.

[sonicboom]

Sonos would be a nice fit technology wise for Apple.

In my house, it does for music what tivo does for video. Granted it's not a recorder, but it puts a vast library of music at my fingertips anytime I want to hear it, anywhere in my house.

[Mactagonist]

I would like to know what you think Palm brings to the table. As far as I can tell, Palm has no desirable technology, no mindshare, dwindling marketshare.

As to Netflix, I think Apple can compete with Netflix by building up competitive services in-house.

And as an AAPL stockholder, I'm not keen on Apple acquiring what I see as two over-valued companies. The percentage of shares shorted of float is 31% for Netflix; the market thinks this stock's price is going down.

It's even worse for Palm. The short percentage is a whopping 62%. That's right: more investors think this stock's price is gonna tank than those who think it's going to increase. Palm's financials are ugly as hell (almost $400M of debt?). My guess is if Apple announced that it was going to purchase Palm, the shareholders would not approve the transaction. I certainly wouldn't.

Palm has good software engineers and by buying them Apple prevents someone else from acquiring them. WebOS is a very good OS, it is held back by its crap hardware. If someone with experience designing good hardware like Nokia snapped them up they could become a bigger threat.

The value of Netflix is definitely in their content deals. They could take apple TV from an afterthought to something in every livingroom if it integrated Netflix and iTunes streaming.

[Rocketman]

... Apple quietly buys Kodak ...

Let's parse (again).

EK Market cap $1.4B

AAPL Market cap $189.8B

Trivial purchase. Buy, buy, buy.

Rocketman

[LoganT]

One of the reasons Apple might want to buy Palm is to get their old engineers back.

[theheadguy]

One of the reasons Apple might want to buy Palm is to get their old engineers back.
Is something stopping them from doing that now?

[Rocketman]

One of the reasons Apple might want to buy Palm is to get their old engineers back.

Except for one little detail. They don't want to come back or they would have stayed.

Apple should buy undervalued companies with patents and incindentally acquire engineers.

They need to build the new campus and server farm before they go to overboard, unless they want to rent a bunch of space and single-handedly cause a commercial real estate crisis when they move into a new campus. . . . .

Rocketman

We now know where 1 and 2 Infinite Loop are. Where will 3 and 4 be?

[spillproof]

Buy now while its all cheap to get the patents, engineers and all that jazz. Apple needs more patents!

[paul4339]

- an even larger stake Imagination Technologies to fend off Intel
- a stake in ARM holdings to prevent a competitor from acquiring, and to influence the Cortex design and license costs
- and maybe any LCD technologies companies, _like_ Pixel Qi, that may have some IP strategic to Apple

- strengthen their GIS companies (Placebase) to grow their mapping strategy (I don't know any companies offhand)
- maybe, strengthen their streaming media side (companies like Hulu, Pandora) for more engineers
- don't know what they will do to counter Google-voice, or how it fits into Apple strategy

[cvaldes]

Palm has good software engineers and by buying them Apple prevents someone else from acquiring them. WebOS is a very good OS, it is held back by its crap hardware. If someone with experience designing good hardware like Nokia snapped them up they could become a bigger threat.

The value of Netflix is definitely in their content deals. They could take apple TV from an afterthought to something in every livingroom if it integrated Netflix and iTunes streaming.
As others have mentioned, many of the Palm engineers are former Apple employees, so I figure they'd bail if the company was acquired. It would probably be easier/cheaper to get some recruiter to drive over to the Palm campus and stick "Apple's hiring!" ads on windshields rather than to acquire Palm.

My guess is that Apple can strike content deals that will compete with Netflix. The key to that might be iPhone streaming and/or the phantom tablet.

Again, the short percentages for both NFLX and PALM don't persuade me to believe that either company is a sane acquisition target at this moment.

I simply don't see the long-term value proposition; I think Apple can get there with their own internal resources and/or other cheaper methods.

[SeattleMoose]

Goldman Sachs represents the very worst of the east coast financial mafia. I hate to see Apple tarnish its image by having anything to do with such a low life company......:eek:

[ChrisA]

It's to bad Oracle already got Sun. Sun builds nice servers and has a huge service organization. Apple could have used that to move t the enterprise sized data centers.

[cmaier]

It's to bad Oracle already got Sun. Sun builds nice servers and has a huge service organization. Apple could have used that to move t the enterprise sized data centers.

Plus they are utterly incompetent and sucky.

-Cliff, Sun Microsystems engineer, 3 months in 1997 :-)

[mjtomlin]

Apple should buy ARM and rename it to Apple RISC Machine. :)

One other thing... Apple is not in the habit of buying up competitors. Usually they buy up companies to bring something new into the company.

[Coroe]

Uh, Apple should simply buy:

- Dropbox

Integrate it into MobileMe's iDisk so that it's finally useable.

- Skype

Integrate it into iChat, so that it isn't a bandwidth hog anymore and useable.

[Leopard spotz]

Hi,

I would love to see Apple buy a company like '37signals' - they produce a a suite of online CRM solutions that could really add some missing features to SL Server for the SME business environment.

We run an office with 5 iMac's and 2 people out in the field with MBP's and iPhones. At the moment we are using a Mac Mini with Snow Leopard Server to tie this all together. Whilst this is great there are features in SL server that we simply do not need (Podcast production) but there are other features that are missing (CRM + Project Management). For this we use online solutions provided by '37signals' but that means we have to pay out $$$ each month, it's not a fortune but it does add up. I would love to see these features/services available on our own mac server.

I think that the small business market has a great deal of untapped potential for Apple, as many of use are willing to pay the slightly higher prices in exchange for an 'all in' solution to our IT needs from a single supplier.

[DrEasy]

Buy the elGato guys (of eyeTV fame) and produce an :apple:TV offering worth the money. Although for Apple it's probably trivial to recreate eyeTV's functionality with their own engineers.

[LethalWolfe]

From the BusinessWeek article:
Historically, Steve Jobs has not been the acquisitive type. Since he returned to Apple (AAPL) as chief executive in 1997, the company has bought only 11 small companies, far fewer than Silicon Valley counterparts such as Cisco Systems (CSCO) or Hewlett-Packard (HPQ). Google (GOOG) has bought 11 companies in just the past 18 months.
I'm not sure what criteria BW is using, but Apple has acquired a lot from other companies since Jobs came back. Everything from their multi-touch (FingerTouch) to iTunes (SoundJam) to almost all of their professional applications (Macromedia, Nothing Real, Silicon Color, etc.,) started out someplace other than Apple.


Lethal

[mdriftmeyer]

Let's parse (again).

EK Market cap $1.4B

AAPL Market cap $189.8B

Trivial purchase. Buy, buy, buy.

Rocketman

Tens of thousands of employees with pension plans is no trivial acquisition.

[capoeirista]

It seems a possibility that EA will be subject to a takeover this year. Why not restart the rumour that apple will buy them? We might get more games.

[mac1984user]

It's to bad Oracle already got Sun. Sun builds nice servers and has a huge service organization. Apple could have used that to move t the enterprise sized data centers.


Kind of ironic to think of Apple having had the opportunity to acquire Sun seeing as that Sun nearly acquired Apple in the 90s. =)

[RichardI]

Getting to be quite the giant aren't we, Mr. Jobs? Interesting....;)

[diamond.g]

It seems a possibility that EA will be subject to a takeover this year. Why not restart the rumour that apple will buy them? We might get more games.

I think EA makes more money from consoles than from PCs. Making games for Apples stuff only wouldn't be enough to sustain the investment in EA.

[sishaw]

If I were in charge, Palm and Netflix would be next on the list.

Netflix maybe, but why that economic boat anchor named Palm? Sure, they were a great company once upon a time, but that day is gone. Acquiring Palm would not bring any worthwhile technology on board.

[KingYaba]

I had a dream last night that Apple bought AMD and all hell broke loose.

[cvaldes]

Let's parse (again).

EK Market cap $1.4B

AAPL Market cap $189.8B

Trivial purchase. Buy, buy, buy.

Rocketman
Let's try this again.

Eastman Kodak Financials

EPS: -5.86
Return on Equity: -84%
Total Cash: 1.15B
Total Debt: 1.75B
Book Value Per Share: -2.44
Levered Free Cash Flow: -530M
Short % of Float: 26%
Current share price: $5.02
1 yr. target estimate: $2.81

Short, short, short

AAPL shareholders (most of whom are institusional investors) would never go for this. I'm an AAPL shareholder and I'd certainly vote down an acquisition of Eastman Kodak.

[CQd44]

There is nothing that boxee has that Apple cannot do better - if they wanted to.

If Apple wanted to, they could do a lot of things ;]

[RogueWarrior65]

What is it with struggling companies trying to litigate their way to profitability? IMHO, Apple should buy out Kodak's patent portfolio.

[Mattie Num Nums]

Palm has good software engineers and by buying them Apple prevents someone else from acquiring them. .

You do realize most of those people LEFT Apple for Palm.

I agree with the Apple buying Adobe statements. I think they should buy Adobe and then just scrap the PC side of things and make Creative Suite an Apple only software... ala Logic and FCP.

[kingtj]

Yeah, that's actually not a bad idea -- although I'm really not sure which company would make sense to purchase to accomplish this?

Really, I think Apple has finally made MobileME "just good enough" to justify its price. In the past, that wasn't the case at all. But really, if you look at the yearly cost for another "online data backup/storage" service that lets you store the same amount of data as MobileME, and the cost for annual web site hosting with email account someplace - you're probably at around the same cost as MobileME right there. Plus, MobileME is integrated more tightly with Apple's products than other services will be, and you get the other benefits like the "Find my iPhone" and the "Back to my Mac" (which honestly has some serious limitations, but is pretty good for the home user with only one Mac connected directly to a cable or DSL modem).

I agree though... it has performance issues with things like web-mail (but then, so does Yahoo mail which AT&T uses by default as my email provider).




They need to buy a company that can take MobileMe to the next level. I mean the only thing I like is the mobile gallery and find your iPhone. Everything else SUCKS. Using your email on the browser has major issues and is slow plus I when I send an email it does not add it to my Sent box. This is a paid service and I expect the mail to be as good as gmail damn it.

[MorphingDragon]

I had a dream last night that Apple bought AMD and all hell broke loose.

Hell as in Intel ass whipping?

I think every super-geek has been there.

[Mattie Num Nums]

Hell as in Intel ass whipping?

I think every super-geek has been there.

About 9 years ago I was an Apple Rep at CompUSA and we used to always dream about the AMD/Apple merger that ended up being the Apple/Intel marriage :(

[MorphingDragon]

About 9 years ago I was an Apple Rep at CompUSA and we used to always dream about the AMD/Apple merger that ended up being the Apple/Intel marriage :(

AMD seriously needs to take Intel down a notch. FTR, the details for Fusion became before Arrandale.

[roocka]

This would instantly thrust Apple into cloud computing, memory, and virtualization to such a degree that they could immediately start competing on a large scale with Cisco without losing their focus on the consumer.

[mccoma]

my list:

No, heck no!

Palm - 2.28B - Dell should buy Palm not Apple
Eastman Kodak - 1.33B - only buyout their patent portfolio - not the company (too many negatives, debts)
Nintendo - uhm they are bigger than Sony
AMD - 5.9B - oh man, Intel would through a hissy fit (well, so would a lot of clone makers).


Maybe

Adobe - 18.82B - only really for the patents and technology - they are doing a wonderful job of destroying their own products
Avid - 504.59M - own the video market
NVidia - 9.5B - patents, mobile GPU


This could be cool

ARM - 2.5B - a large share (not a take over) would prevent some problems
Imagination Technologies - 975.6M - again, a larger share to counter others
Luxology - private? - great 3D (modo) and graphics app (imageSynth)
Pixel Qi - private - if the screens really is as good as they say, just buy it all

[Mattie Num Nums]

This would instantly thrust Apple into cloud computing, memory, and virtualization to such a degree that they could immediately start competing on a large scale with Cisco without losing their focus on the consumer.

Apple does not allow there software to be virtualized though.

[roocka]

I was not even thinking of that.. Well, shoot..

[MorphingDragon]

This would instantly thrust Apple into cloud computing, memory, and virtualization to such a degree that they could immediately start competing on a large scale with Cisco without losing their focus on the consumer.

Mega Find!

[Dragonlance1561]

Yeah, they need to buy someone who makes file transfers easier and MUCH faster. I doubt their new server farm will do much. It just seems like they are inefficient.

In my ideal world, they would also buy Nintendo. As to whether or not that makes business sense: hell if I know?!? I don't even know how much Nintendo costs. I just want all their games and tech melted with everything that makes Apple a great hardware / software designing company. Haha, iWii. Gross. But seriously, I think Apple could seriously clean up in the games space.

I too think that apple could really do something big in the video games market. Ever since I became a fan of apple I have thought that apple should make a game console to compete with the Xbox. Perhaps apple could cut the apple TV and make a game system with all the same functionality, but it also plays games. This is essentially what the Xbox can do right now.

Also, I think that apple should acquire Foxconn so they can manufacture their products them selves. However, I have absolutely zero clue if this makes any sense at all from a business standpoint, it might be the worst idea ever. Whatever apple does though, I can hardly imagine them doing anything stupid.

[Preem Palver]

I really think Apple missed a golden opportunity to strengthen both its Mobile Me offering and Mac OS X Server when Zimbra, the most-credible Microsoft Exchange replacement, was acquired by Yahoo for US$350 million in 2007. And now that Yahoo has just dumped Zimbra -- whose product has only advanced in the intervening time with the 5.0 and 6.0 releases -- onto VMWare at a price lower than that US$350MM, it seems Apple has let the opportunity pass again.

I mean, SquirrelMail's great and all, for 1998, but a lot of us expect more out of Mac OS X Server.

[Dozerrox]

I just bought a dell inspiron, its so good...

[rfrankl]

As a shareholder also, I would love to see them buy Tivo. That would get them into people's tv area of their homes even quicker. People love the service, and as good as the interface is, Apple would only make it better, especially compared to the cable companies' DVRs.

[cmaier]

As a shareholder also, I would love to see them buy Tivo. That would get them into people's tv area of their homes even quicker. People love the service, and as good as the interface is, Apple would only make it better, especially compared to the cable companies' DVRs.

Given Tivo's fiscal performance that would be a mistake