Apple’s $15.4 billion stash is larger than IBM’s, Hewlett-Packard’s, Intel’s, and Google’s, putting the Mac, iPod, and iPhone maker into “the elite ranks of well-heeled Fortune 500 tech companies,” Jon Fortt reports for Fortune.
“So what does CEO Steve Jobs have in mind for all those greenbacks?” Fortt asks.
“If the past is any guide, Jobs & Co. could very well use some of the money to swallow smaller companies,” Fortt reports.
“Or Apple could make some investments. During tough times, the money Apple had put in Akamai Technologies (AKAM) and ARM Holdings (ARMHY) provided the company with valuable infusions of cash when necessary. It’s a bit more difficult to find places to stash $15 billion, however,” Fortt reports.
“Might the company really launch a large-scale buyback program, or begin offering dividends? For Apple, there’s limited advantage in doing that until investors force the issue. Once a company gets onto the dividend treadmill, it has to keep doing it or risk being seen as in decline. The same goes for stock buybacks,” Fortt reports.
“At Apple, there are some sizable projects ahead that could demand sizable chunks of cash [like] the brand new campus the company plans to build down the road from its current Cupertino, Calif., headquarters… Real estate experts last year suggested that Apple’s project costs could top $500 million… And, of course, it’s not clear whether their estimates factor in the possibility that Steve Jobs might decide to make a big architectural statement,” Fortt reports.
“There’s always the chance that Jobs will surprise us all, break with tradition, and buy something big. Consider this: With the money burning a hole in Apple’s pocket, he could easily buy TiVo, Netflix and Circuit City, and still have plenty left in the bank,” Fortt reports.
Full article here.
[Thanks to MacDailyNews Readers “Fred Mertz” and “Mike in Helsinki” for the heads up.]
What would we do? Well, we like to get a lot of bang for our buck, so we tend toward the dramatic: Apple should buy Adobe and, starting with Photoshop, double the price of the Windows version vs. the Mac OS X version while allowing Windows sufferers to double their number of licenses at no extra cost by migrating to Mac OS X. With the next version of Photoshop, discontinue Photoshop for Windows. Just as Apple did with Shake after they bought Nothing Real. Excecute that process down the line with the most widely-sold Adobe products. While you’re at it, Apple, buy Autodesk, and freakin’ finally get a version of AutoCAD (last release for Apple Mac: June 1992) out for Mac OS X. It’d be no small task — we hear AutoCAD a spaghetti-coded mess that’s long been mangled specifically for Windows, which is why Autodesk can’t even begin to think about, much less produce a Mac OS X version — but Apple could do it.
What would you do if you were Apple sitting on a mountain of cash?
Buy IBM or CSC and get into IT service business. Forget trying to convince the Fortune 500 IT managers to switch. Just buy them.
Buy Adobe and develop/buy a ERP system.
I like the second bit. Apple should try to push their enterprise markets a bit more. And maybe reabsorb FileMaker.
Reinstate the employee profit-sharing program that was discontinued about 6 years ago, and also – with Google – get control of the 700MHz band for ubiquitous wireless networking for Apple WiFi-enabled products.
“With the money burning a hole in Apple’s pocket”
Who says Apple’s pocket is burning? Hoard it and make Wall Street and the music and movie moguls pay homage to Steve.
I think they would get more long term bang for their buck buying Universal. It would…
* Stop the bickering over music pricing.
* Give Apple access to their extensive library for sale on iTunes.
* Drastically increase the number of songs sold with NO DRM.
* Send a message to other studios that they better get on board with DRM-less music too or be left out in the cold.
* Will probably draw more new artists into the new Universal, since I’m confident that Apple would greatly increase their artist’s share of sales.
* And not that I think Apple would do this but owning Universal would give Apple the say on who sells their music, and they could do the same thing to other music retailers (Zune store for example) that Universal has done with Apple (i.e., withdraw music from their catalogs).
* Reduce the sale of cocaine in California.
I’ll throw in with “Buy Adobe”, as it has finally caught on at even the Federal Government as the standard file format.
And rather than doing overtly nasty things with Windows licences, simply keep the price the same on Windows, but give a steep discount for Mac platforms (like Quicktime).
Don’t forget that PDF makers need to be brought into iWork and Keynote – – and gosh, wouldn’t it be unfortunate if updates onto future versions of MS-Office for Windows happen very slowly (security issues, don’t ya know).
The key to bringing down Microsoft will be Office more than it will be just Windows.
However, before committing to this path, Apple also needs to keep an eye out for potential PDF competitors – especially any threats from M$.
-hh
One other thing…
BRING BACK MAC PROJECT!
I’ve suffered through MS-Project for all too long – – I really miss the Mac’s version by which you could identify tasks and critical paths … the actual program *plan* … before you had to commit to resources and schedule.
-hh
It isn’t burning a hole in their pockets. It is a necessary evil of their current strategy in the music and movie businesses that they have to maintain a large stockpile of cash to prevent hostile takeover attempts. Steve Jobs is pissing off a LOT of powerful people in several industries. However, now that they’ve gotten almost too big to swallow by any but the largest of the large multinationals, they could use part of the fund to grow.
Autodesk is an excellent idea.
Adobe, on the other hand, would be an organizational nightmare to try to bring into the Apple fold. They may have started out there, but it is a large, very different place these days. Plus, were they to attempt to buy Adobe, the EU antitrust lawyers would be sharpening their knives in anticipation.
The two things that Apple needs to become a (more) viable option for large enterprise customers? A more robust set of email back-end products, and an ERP system like SAP.
Why do people keep saying buy Adobe if it would cost $25 billion?
$10 bucks says that Steve Jobs, CEO wants to buy Microsoft. He can wait. 5 years… 10 years… Apple will keep hoarding, Microsoft will slowly begin falling.
When the numbers match he springs and releases only Mac OS’s from then to eternity.
None of you are thinking big enough at MacDailyNews.
Apple could initiate a hostile takeover of Microsoft via leveraged buyout, once their cash hoard gets big enough. They could easily get billions from the likes of Google, IBM, etc. as a part of that package for minority shares.
You heard it here first.
Instead of buying big and expensive software companies like AutoDesk and Adobe, just invest in the best talent to write your own or buy some smaller ones and improve the experience.
Think of OmniGroup, Plasq, ArchiCAD, Sibelius, etc.
Make the bigger ones irrelevant.
As for hardware, Sun would be a good move. Port all of the Solaris stuff over to OSX.
i say you should give me a free phone for life because my parents are poor
Adobe and two killer video games.
The former needs no explanation. As fro the latter, although I am not a gamer, I understand the incredible pull of them.
I you have developed games like Halo 3 and Assassin only for the Mac platform and advertise the hell out of it, watch out!
Mom-Dad? I NEED a Mac for Xmas or my life will be ruined.
I’d go for R&D;in:
1) Apple branded HDTV
2) Co-invest with someone to bring unlimited data/voip solution for $20 per month per device.
3) Forming “Apple Game Studios”
I can’t think of any company they should acquire.
They should start their own music label rather than buy an existing one. Though buying an existing one might have the obvious benefits of inheriting existing infrastructure and brand assets, I think one of its major drawbacks would be that very same infrastructure, and neither the brand nor the assets are worth it anymore. Rolling their own would generate more excitement and would hint at better possibilities from pioneering a new music industry approach rather than a rehash of reforming the old approach.
But overall, I don’t think this is either necessary or appropriate right now.
I think that there are several markets that would need this money:
1) Enterprise
If, and only if Apple is interested in this market, there are some obvious things to do:
a) “Get” some key applications.
By “Get” I mean either buy (like Primavera, Autodesk) or better (cheaper) Identify a already existing product, buy it, improve it and make it a killer application
b) Support the development of Enterprise applications
For example, support Oracle, SAP in their development of integration with the Mac Platform, and other tools.
c) Identify the key IT unresolved issues in Enterprise and develop solutions…We are talking Apple here, they CAN make a difference
d) Once the above is in place, have a sales infrastructure to promote all the above
b) Consumer Markets
Yes, by all means improve/expand their marketing (i.e. stores, prices, mass advertising) in international markets, it will pay off, there are potentially big markets (BRIC)
Also some current products are not up to the level we deserve (money, Quicken) etc…Do something about it..
And people here in this board talk about Adobe products, being relevant (I have no opinion on this, I not in the design industry) but it seems reasonable not to buy Adobe (too big) but maybe buy or develop something…
c) New Markets/Industries
Just like the Cell Phone, I believe Apple is already thinking of new markets/product to attend, I will not offer any suggestion, so far they have done great…keep this up!!!
d) Keep Quality in check
There have been some complaints about the quality of their products, I am NOT talking about SERIOUS issues, just possibly a slight trend of being somewhat sloppy, they are still better than the rest of the industry, BUT that is a very LOW benchmark, they should keep benchmarking against…THEMSELVES….in other words, maybe they are stretching thin, well then hire some people, it wont have an immediate impact but they will be prepared for the expansion of their business (size wise and new markets)
So much for this “armchair CEO” exercise
Although I’m on board with the popular Adobe purchase as well as Autodesk, don’t forget where greed will take you. “Dance with the one what brung ya”. In other words, stay the course and focus on your own damn business. Look where it has gotten you to this point.
1. Doing whatever it takes to get a bigger footprint in the enterprise market—new software, services, hardware, dedicated department, alliances, takeovers, whatever. Enterprise could be a cash cow for Apple—just like MS.
They don’t have to “own” the enterprise market, just get a 10 to 20% share. That would reap billions on down the line.
Way back in the dark days (pre ’95) I proposed to Apple personnel that they merge with Adobe.
I still feel a combined Apple/Adobe would be a good thing.
Buy me a Bugatti Veyron.
Congratulations to Steve Jobs on being inducted into the California Hall of Fame.
http://www.californiamuseum.org/Exhibits/Hall-of-Fame/inductees.html
I have said it before and I will say it again. Apple buy Sun.
Sun’s market cap is currently just over $16B. The effect would be to give Apple a major presence in most significant corporates and data centres worldwide. Most of the Sun servers are above the XServe in spec so very little product line overlap. Suddenly Apple via the Sun name would be on the Preferred Supplier Lists of thousands of corporations and it would increase the possibility of Apple being considered for desktop replacement projects in all those corporates.
Go for it.
I would purchase tivo and further develope the idea of apple tv.
They should stay away from AutoCAD like the plague- what utter junk that software is. Apple ought to invest in Pro/E, Siemens NX, or SolidWorks and dive head first into the 3D CAD modelling world. I’m sure architects will disagree, since they are the prime users of AutoCAD. AutoCAD can’t handle true 3D modelling worth a damn. BTW, Apple uses Siemens NX (used to be called Unigraphics) to design its hardware in 3D- not AutoCAD.
MacDailyNews took the words right out of our mouth:
1. Apple should buy Adobe and discontinue Photoshop for Windows.
2. Apple should buy AutoDesk and create AutoCAD for Mac OS X… and then discontinue AutoCAD for Windows.