“Did you know that Apple has enough capital to buy out the entire mobile phone industry?” Markin Abras asks for MacDirectory. “That sounds crazy, but given the current valuations and market value of Apple’s competition, it would not be difficult for Apple to acquire every phone vendor except for Samsung with cash alone!”
Abras reports, “As the mobile market matures, will Apple start buying out its competitors in order to keep its share-holders happy? To answer this complex question, MacDirectory spoke with Apple analyst Horace Dediu.”
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Dediu: As the low end market peaks, there will be a natural tendency toward consolidation. LG may become a target and perhaps Motorola and Sony Ericsson. These brands still have value but their smartphone businesses are undifferentiated and their voice-oriented businesses will have excess capacity. So there will be some logic to seeing consolidation.
However, none of these scenarios suggest that Apple would have any benefit from acquiring assets from incumbent phone vendors. This is a tale of two markets: voice- and data-oriented; or alternatively, phoning vs. mobile computing. The markets are asymmetric and knowledge of one does not benefit much the other. Even the profit models are different where in one you’re selling essentially planned obsolescence and in the other platforms.
So the logic of Apple buying legacy incumbent phone businesses does not make much sense, but the consolidation of those vendors either through merger or through a pooling of interests does make quite a lot of sense.
Much more in the full article here.