“Apple should use its enormous cash reserves to make some big-name acquisitions, the company’s former boss John Sculley has said,” The Daily Star reports. “He said it could shift the ‘whole landscape of e-commerce’ if it bought, for example, eBay.”
“He said it should ignore the wishes of activist investor Carl Icahn, who wants the company to buy back stock,” The Daily Star reports. “‘I’d rather see Apple continue to invest in building… even make big acquisitions that were strategic, as opposed to buying more stock back, or giving more dividends.'”
The Daily Star reports, “He said he now wonders if it is time for Apple to change its growth strategy ‘Apple’s never been an acquirer of big companies before, and when you look at the [Apple digital ticket system] Passbook, and fingerprint recognition – what would it mean if Apple went out and bought eBay? And they had PayPal, and integrated that? My guess is you’d suddenly see the whole landscape of e-commerce shift. You have Amazon, which is on the fast-track to dominate every aspect of e-commerce – suddenly the game, the landscape, would change.'”
Read more in the full article here.
Can someone remind him that there is a reason why he doesn’t work for Apple anymore ?
Could you please restrict your comments to the subject? Please discuss IDEAS, not your immature attacks on PEOPLE.
Sculley is right about Apple on this issue. Apple should tell Icahn to take a long walk on a short dock. But sitting on hoards of overseas cash is stupid too. There is no way Apple is making much money on its cash pile compared to what it could earn if it owned eBay and/or Paypal. Or if it bought significant stakes in wireless carriers around the world. Or if it purchased some manufacturing capacity for chips & displays so it didn’t have to rely on Samsung and other traitorous suppliers all the time. Or it could be really bold and acquire Canon, or Xerox, or Nikon, or Fluke, or some other significant player that could enable dramatic market segment revolution with the injection of Apple technologies.
Yes I am surprised and was already writing him off before reading but what he says makes real sense in the particular cases he raises as its highly unlikely that they could be replicated by Apple while amazons efforts looking so laughable a few years back now look quite a strong play to dominate where it hurts which could restrict Apple in areas its seeing as its future rather as MS did in computers. So certainly worth exploring surely.
huh? I think your finger flew over the period a little too quickly. Or maybe the comma. Not sure. Definitely hard to read though.
PE ratio of eBay is too high to make financial sense.
perhaps, but what kind of value could Apple unlock if eBay and Paypal were standard applications on every iPhone, enabling truly free peer-to-peer payments without the need for a bank and their ludicrous draconian fees and restrictions?
Sculley is wrong, as ever. Apple should take some of its money to advertise the great products. No real advertisements in Germany for iMacs since ages. Word of mouth is not enough. If they want to sell more Macs, they need to advertise. Also Apple should take some money to open more stores. It is a joke that still nobody is in charge for retail at Apple.
How good is it for Apple to divert its attention from the things we know about and like from them, into other avenues? Icon is interested in himself because he has a lot of stock in Apple. By making Apple worth more he profits. Making Apple worth more is a pretty good strategy for Apple too. Purchase other companies? ONLY if they make sense for Apple. Purchase Amazon for instance, will put a great distribution chain in their lap (possibly a plus), but it might distract them (a big minus). If you notice, the companies they DO purchase make complete sense for Apple. Invest in research into batteries? That would make a LOT of sense. If Apple could perfect gigantic capacitor battery tech, that would be a huge game changer in many industries. Keep Apple focused, enhance its value, and invest in game changing research? Win, Win, Big Win….
You’re saying Jeff Bezos and his take-over-the-world investors would be willing to sell Amazon to Apple? Seriously?
I agree on that its pathetic to see Apple sitting under a an ever increasing pile of money, or giving it back to investors because they apparently don’t have faith in its sales/strategy these days while spending so little on actually advertising its products. Smacks of arrogance or complacency to me, and probably looks greedy to many.
Absolutely not. If the company you purchase is too large it’s way too difficult to integrate it into your own organisation without it losing most of the value you paid for it. Much better to keep with small acquisitions in order to snap up features or particular skills.
He’s right about ignoring Icahn, or is that Kahn!
However like you said, buying big companies causes big problems. However with that said, you could buy a large company without intent to integrate, but mostly foster better collaboration. I think AMD is doing well with ATI. HP was able to absorb Compaq with mostly disastrous results, HP is now more like Compaq than what was originally intended and now they are struggling anyway with bad management. I could see Apple picking up PayPal, but it would have to take ebay along with it. Ebay won’t work for Apple. They should have taken Twitter and then leave it alone on it’s own path.
Oh the headache is not worth the billions it takes, because the cost is not just the money, it’s the moral of the employees, which is worth more than all the money you could possibly save.
Apple would first of all need to repatriate much of the money, so the taxes would add quite a lot to any purchase price of any business based in the US which they might want to buy.
Apple never buys big companies. It gets much better value for it’s money by buying niche companies where their particular expertise fits in with Apple’s plans.
The only way I could imagine Apple buying a big company were if they bought either a media company for it’s content, or a telecoms company so that they could create a truly advanced network, but I don’t see any particular company being the right fit for Apple in either of those sectors.
The only thing that I can agree with Sculley about is that Apple should ignore Carl Icahn. He has no interest in the long term success of Apple, he is solely obsessed with whatever short term advantage he can gain from AAPL, but there can be no doubt that Tim Cook is completely aware of Icahn’s agenda.
Now there’s some original thinking from an original sales guy.
Apple is not supposed to release crappy software, and yet here we are with iOS 7. There’s always a first time for everything.
Apple should buy a major touchscreen manufacturer like Sharp or Toshiba or Japan Display to secure their supply lines and future proof their touchscreen supply on which 75% of their revenue and profit depend.
Apple should do two things with its money: 1) set up manufacturing plants in the United States to free itself from all production by Samsung. 2) Develop an in-house business service division to match the biggest in the industry like IBM, HP, Accenture, SAP and Oracle. Even using some of Apple’s competitor’s products. And, of course, Apple should have renewed support of the “small shop” businesses.
Perhaps they should purchase Pepsi so they can shut it down.
Pundit: No Apple news to file. What can I do?
Boss: Hey, where’s your feed? Deadline’s in half an hour!
Pundit: Almost done, Boss. To self: Crap. What can I dredge up. Checks the old rolodex. Scully, hm… I’ll bet he’s eager to be in the news. Picks up phone…
Apple buys ideas, not companies. 😉
What does Former Apple CEO Sculley know? He ruined Apple while he was CEO. He should have kept his job selling sugar water at Pepsi.
Once you buy, you must be committed to improve to lead for the next 20 years and provide complimentary value & matching profits to your primary business.
That takes lots of effort and ingenuity in a new field.
Doubt Apple will do that in any short time frame.
Large acquisitions rarely work. but acquiring Intel could shake up a boring industry.
I see the advantage and power of buying paypal, less so e-bay. Though a tie-up with ebay or twitter could be very interesting.
Apple would get tied up for months trying to do a big deal. Companies like GE make big payoffs in Washington, so when they make acquisitions that substantially reduce competition, it is approved easily, not so for Apple.
I’m no fan of Mr. Sculley, but the prejudice around his name sometimes make people who never was involved in that particular time of SJ life s,o irrationally angry that even when he gives good advice, people would immediately dismiss it without further analysis.
I think it would be great for Apple to buy some muscles on Services,Software, and Cloud…I have had problems these months accessing rented movies, buying apps etc…
Regards, Emerson
I would think acquiring a large company would remove Apple from the ‘doomed’ list and might interest more mutual fund investors. Of course, that all depends on the company acquired. All I know is that Apple is being completely shit-canned on Wall Street as it is and iPhone sales don’t seem to cut it anymore. As far as Wall Street is concerned, Apple’s whole hardware business is going down the tubes as Android cuts into Apple’s mobile market share.
I would like to see Apple acquire MasterCard and take over the whole mobile payment business. MasterCard seems like a solid, long-term company and that would give Apple a longer-term outlook as a company. It would certainly prop up the outlook on Apple’s uncertain (as Wall Street sees it) hardware business.
It’s just wishful thinking on my part because I don’t see Wall Street giving any value to Apple as it is. I believe too many investors see Apple’s mobile hardware business, whether true or not, as a dead end in terms of growth. Apple’s hardware business is just being constantly dissected and results indicate there doesn’t seem to be any positive side for growth. Apple’s initial iPhones sales did absolutely nothing for Apple’s share price which is rather disappointing and there doesn’t seem to be any positive catalysts for decent earnings this quarter.
I’m only saying this because nothing Apple has done all year has put much value back into Apple, so I can only speculate on things that Apple could still do. Maybe nothing would make a difference for Apple because of its high market cap. I don’t have the skills for running a company so an acquisition is just something that sounds good in theory to grow a company’s value short-term.
I’d rather see Apple build it’s own PayPal. I think they could do a better job of it.
Adding Touch ID makes me think that’s exactly what they’re doing.
No way. How many large acquisitions have helped companies like M$? I prefer Apple’s way of buying nascent tech. The only large company I would like them to buy is TMSC since then they could own the processor making capabilities and stop others from getting a heads up on the processor design.
By law a foreigner can’t own or buy land or companies in Tiaiwan, China.
Scully the “let down” is pulling above his weight, he needs to muzzle his big mouth, aka self censorship
Apple should buy DirecTV and add features to push digital data to iOS devices and Macs. This would take care of data distribution in areas where broadband service is unavailable, and create new customers for Apple products.
I want a bank, no more public share trading and a house builder
Same logic: Hey, Apple should buy WalMart and then imagine if everyone paid with their iPhone. Because, money.
Oh, in the eBay case, because Internet, and money.
1) What does he think was Apple’s original growth strategy? Make great products?
2) If that’s the case, then what is the next growth strategy he is implying? Make money faster?
It’s amazing how he doesn’t get it.
What do you have against Apple making money by providing innovative technology to the people?
Do you honestly believe that Apple should restrict itself to selling only technology that it develops in-house? Sorry, but that’s ludicrous. Apple typically buys several other companies per year. All Sculley is saying — and correctly so — is that Apple would be better served — and it would delight the Apple community — if Apple tapped its horde of cash for a more ambitious acquisition.
As it is now, Apple isn’t getting a decent return on its profits. Cook is not doing a great job serving his investors, nor is he pushing the innovation, nor is he improving Apple’s supply chain. The biggest expense Apple will have under his reign will be a big ugly office building. Yippee. Why in the world would that please anyone except ego-stroking executives? The Apple community — and especially the Mac community — would MUCH prefer that Apple get back to what it once stood for: technical innovation of personal electronics for the benefit of the users.
Apple buys smaller companies to acquire their technology. Buying a larger company would potentially bring their corporate culture into conflict with Apple’s. There are few companies not driven by hard core short term profit motives, and Apple’s focus on the quality of the user experience would be put at risk. Profits at Apple flow from delighting the customer with their products and services, and gaining their loyalty for future purchases.
When Sculley completes his jail term for taking microsofts money for settling windows suit we might smile at his vailed attempt to be relevant.
Every venture Sculley has been involved in has had a stink of corruption around it.
Thx John for your advice but please find another company tone part of
NO Sculley NO!
DOWN Sculley DOWN!
This is what Marketing-As-Management people do: They wreck companies with bozoid ideas, with no regard to company fit or creative compatibility.
I got to watch this happen first-hand at Eastman Kodak, when they had loads of cash. They went so insane as to buy Lehn & Fink, who were makers of Lysol, Resolve and D-Con. That was a brilliant fit, wasn’t it! Kodak also went nuts buying printing companies in three DESPERATE attempts to get into the consumer printing business. That idea went great, didn’t it! Ad nauseam… oh look Kodak went bankrupt.
IOW: Please John Sculley, close your mouth and move along. Your days of wrecking Apple are long over. Please try no further. Seriously.