“With all due respect, there is a reason Wall Street manages money and not companies. Its focus tends to be numbers and the next short-term catalysts for a share price move. Understandably so, I may add. But when you manage a company, short term consideration must be trumped by the far more critical decisions that will ensure the survivability of the company and its prosperity in the very long-term,” Rafael A. Grillo writes for Seeking Alpha. “As in the next 20 years, not only the next three.”
“As content companies like Google and Amazon are launching devices in an attempt to tighten their grip on their customers, so Apple needs to turn into a content company to fully enhance, complete and seal its robust eco-system,” Grillo writes. “Millions of ‘Appleites’ will be only too happy to oblige. In order to get there and truly dominate the space, Apple will need more than just a device: it will need to acquire a broad range of content properties, production capabilities and the infrastructure to deliver this unique content. Only then can Apple create a true, sustainable and impenetrable competitive advantage with high barriers to entry and thus ensure another decade of continuous growth. This is a tall order, and there is no time to internally develop those capabilities nor, as the Maps fiasco demonstrated, assume the risk to do so. Those capabilities must be acquired.”
Grillo writes, “So, leave Apple’s cash pile alone. When would anyone so stubbornly insist in sticking to more than $140 billion in cash when they know they will need it soon? It’s a matter of survival. As bold and outrageous as it may sound, I’d venture to suggest that it will need a bit more than $106 Bn. in the next few months. That is Comcast’s (CMCSA) market capitalization.”
Read more in the full article here.
MacDailyNews Take: As we wrote earlier this month: …Maybe it’s insurance in the face of recalcitrant content providers (“last chance: sign the deal or we’ll buy you with petty cash”)?
[Thanks to MacDailyNews Reader “Fred Mertz” for the heads up.]
hopefully, Jobs’s foresight and the accumulation of capital will ensure survives the upcoming economic collapse.
Hay! The racist douchebag is back!
Such a classy comment! Exactly what I would expect from a Yankees fan.
thanks! ain’t got time to jibba-jabba, Klan meeting tonight!
Wallstreet hardly has a grasp of running a viable business, apart from running it into the ground.
Too true! Look at all the Wall St. investment companies that have collapsed in the past decade.
I would love it if Apple bought a Comcast
I was on the phone with Comcast support recently (we’re a Triple Play household, so my phone line goes through the cable modem) because of Internet connectivity issues. The perky gal asked me to “stay on the line while I reboot your cable mode…. click” She knew we used their Voice offering. I just laughed. At least her rebooting it fixed the problem where my rebooting it would not.
Made me remember of my request for the faxnumber of some company years ago at our telephone exchange where the response was: “sure, wait…… PEEEEEEEEEEEP!”
I say Apple should just buy Wall Street, then shut up all analyst.
Apple will not have to buy a content provider. They will provide the means for developers to create incredibly attractive apps for the Apple TV. Enjoying those apps will occupy so much of the average person’s tube-time that the traditional content providers will beg Apple put their content on the Apple TV to maintain a reasonable level of viewership. I think this is the general plan SJ was talking about when he said he had cracked the TV problem. It’s also why they have waited so long to allow apps on the Apple TV. They want to have enough AppleTVs out there to make it an attractive platform for developers so it won’t take too long for the content providers to see the light.
I dunno….Spending $100B on Comcast just seems like a collosal waste of money.
It would also put them in conflict with the other content providers and cable companies, kind of like Google buying Motorola Mobility. I don’t think that’s Steve having “cracked” the TV problem.
“As content companies like Google and Amazon are launching devices in an attempt to tighten their grip on their customers…”
Since when are these guys “content companies”?
Amazon is a low-margin retailer, Google is a search company where the “consumer” is their “product”, and the advertiser is their real customer.
Amazon has Instant Prime Videos and is producing its own TV shows. Google has YouTube and has also spent $100 million for produced content for same.
Apple has, well, zilch content of its own. Apple has enough money to buy most of Hollywood and yet has done absolutely nothing in terms of producing its own content. Why not? Who the hell knows. I don’t doubt Apple is pulling in major profits but that doesn’t work with Wall Street. Apple needs to be making moves to show investors it’s a company that’s still alive. Apple is just too damn laid back. No one is interested in last year’s laurel wreaths.
As a shareholder, I’m not asking for that much. I just want Apple to use some of that huge cash reserve to at least keep pace with pissant companies like Google and Amazon. At least put on some game face to give investors some sort of hope. Any potential investors looking at Apple will see they’re not doing squat while other companies are always on the move or at least appear to be even if they’re just spinning donuts.
yep, some big bold moves. seems Apple is so scared of doing
mistake without Steve Jobs. All executives including the Boards
needs to grow up.
Apple is going to need to diversify out of China. Foxcon has already stated as much.
20-40 Billion could be spent quickly.
Don’t want to be in China when the next naval engagement occurs in the S. China Sea……
What are you saying?? Mr. Einhorn does not deserve getting any money for his “investment”? How dare you say such a thing! After all, he put his hard earned cash, from his paper route undoubtedly, into buying Apple stock from people who previously bought Apple stock from people who previously bought that stock from people who previously bought that stock – well you get the picture. And somewhere there were the original, real investors who were the ones who really took a risk and really did make it possible for Apple to be what it is today. And I will bet sure as hell one of those people was not David “The Manipulator” Einhorn!
so many companies have been ruined by buying other companies they did not fully understand or know how to run. In the end they had to spin them off.
even when the match is close there are potential pitfalls: e.g HP buys Palm and now has to sell of WebOS…
Apple can’t even HIRE a LEADER FOR IT’S RETAIL OPERATION! (succesfully more than a year after Johnson left)
what chance have they to run a company they don’t fully grok like a content creator? Imagine them trying to figure out how to hire directors and producers for a content company…
Jobs is the only dude who can cross industries with ease (e.g pixar) and he’s gone,
Cook’s tactic of buying SMALL tech companies for tech is smarter,
Don’t forget, instead of buying they could build.
this this a million times this. Apple needs to be securing EXCLUSIVE content for iTunes and especially the iTV when it comes. nobody is ever going to cut the cord for it unless and until the TV/Movies content they can get (only) from Apple is on a par with cable.