Last week’sunoffical reportthat Apple is calculate to grease one’s palms Beats Music for $ 3.2 billion was significant far beyond its industriousness - shaking line ramifications — it also offer up a rarefied peek into Cupertino ’s usually secretive acquisition process .
While critics have long charged that Apple is too dim to get outside companies and new technologies , there has been recent evidence that is changing . chief operating officer Tim Cook , for example , said during an October remuneration callthat the caller made 15 “ strategic skill ” in 2013 — imagine to be a engaged year for the company . Last calendar month , Cook update the issue to 24 in the past 18 months and aver that the company would not be diffident about gain worthwhile attainment , even if they involved spending a lot of money .
Whether or not such acquisitions are actually increase of later is hard to pin down : As in all of its processes , acquisition strategy included , Apple put a exchange premium on privateness . The party itself seldom bid more than a boilerplate statement—”Apple purchase smaller technology companies from time to clip , and we in the main do not discuss our function or plans”—when it does corrupt other firms . Unsurprisingly , it also declined to comment for this story . Several industry analysts said that tracking Apple ’s motility is particularly difficult .
“ We do n’t get any information from them , ” said J. Gerry Purdy , chief wandering analyst for Compass Intelligence .
“ They ’re not very seeable about those things , ” added Charles Golvin , an main analyst , “ so it ’s difficult to determine whether they ’ve plunk up the tempo or if it ’s become more visible . ”
One of the best sources of data about Apple ’s movements is , perhaps unsurprisingly , Wikipedia , which has adocumented list of mergers and acquisitions by Applethroughout the party ’s history . Each item epithet the develop company , its specialty , how much Apple paid , and how that caller ’s work came to realization in Apple projects , start with the leverage of a software company web Innovations , in 1988 . The listing contain 57 entries — include 13 in 2013 and not including the yet - to - be - finalized Beats deal — which would testify to be a relatively busy class for the ship’s company .
Apple ’s large aquistion to date was the Next muckle for approximately $ 400 million , which was finalize in 1997 .
In pure one dollar bill terms , though , the purchase of Beats would belike on its own surpass all the acquisitions in any single year of the company ’s account .
Contributing factors
According to analysts , Apple looks for three things when making a tidy sum to grease one’s palms a companionship .
Synergy of brand and refinement . “[Apple ’s ] very respectable at euphony , ” said Wedbush Securities analyst Michael Pachter , pointing to the company ’s account with the iPod and iTunes Music Store . “ rhythm is a similar brand — a perception of quality , marketed well . ”
“ There has to be a cultural fit as well , ” sound out psychoanalyst Ben Bajarin . “ So Apple is not just see at the tech but also if the acculturation of the troupe will fit with Apple . It is all interconnected . ”
foundation . “I do believe [ Apple has ] picked up the pace ( of acquisition ) but that is due to the nature of how immobile innovation is happening around the industry , ” Bajarin said . “ Many companies are getting fund , creating alone innovations , and more , so Apple is looking stay ahead of the market and contest . ”
Bajarin put up several representative : The 2008 leverage of P.A. Semi , a semiconductor design group , head to the creation of Apple ’s A5 processor , which Bajarin describe as “ one of the most innovative SoC designs in the grocery today . ” Similarly , the 2012 purchase of AuthenTecled to the iPhone 5s ’s Touch ID . “ Both those underlying ship’s company are critical to the companionship ’s retentive terminal figure strategy , ” Bajarin tell .
Shore up weaknesses . A number of Apple ’s 2013 purchase were ofdigital mathematical function companies — an endeavour to shore up a clear helplessness after the ship’s company ditched Google in favor of its own , much - unloved function app for iOS .
likewise , the acquisition of Beats is go out as a way to make progress in the stream euphony area : The relatively young and comparatively developing iTunes Radio is n’t seen as having made enough headway against services like Pandora and Spotify ; Beats Music offer both quick - made engineering , an enthusiastic hearing , credibleness to Apple in anarea where it ’s still seeking a foothold .
“ You do n’t know anybody who actually uses it , ” Pachter said of iTunes Radio . “ You do n’t know anybody who pronounce it ’s great . ”
One concluding element start the speeded - up pace / size of acquisitions : A gigantic hoard of cash — around $ 150 billion as of the most recent quartern — that Apple ’s investor expect to be put to good use .
