“Getting rid of Samsung as a processor supplier and, at the same time, capturing the crown jewel of the American semiconductor industry,” Jean-Louis Gassée writes for Monday Note. “How could Apple resist the temptation to solve its cash problem and make history again?”
“The problem of the day is, once again, what to do with Apple’s obscene pile of cash. By the end of December 2012, the company held about $137B in cash (or equivalents such as marketable securities), including $23B from operations for the quarter,” Gassée writes. “Apple needs to extract itself from the toxic relationship with Samsung, its ARM supplier. Intel is flailing. The traditional PC market – Intel’s lifeblood – continues to shrink, yet the company does nothing to break into the ARM-dominated mobile sector… Intel’s market cap is about $115B, eminently affordable.”
Gassée writes, “Oh, and one more thing: Wouldn’t it be fun to ‘partner’ more closely with Microsoft, HP and Dell, working on x86 developments, schedules and… pricing? … Imagine solving many of Apple’s problems with a single sweeping motion. This would really make Cupertino the center of the high-tech world… Some read the decision to return gobs of cash to shareholders as an admission of defeat. Apple has given up making big moves, as in one or more big acquisitions. I don’t agree: We ought to be glad that the Apple execs (and their wise advisers) didn’t allow themselves to succumb to transaction fever, to a mirage of ego aggrandizement held out by a potential ‘game changing’ acquisition.”
Much more in the full article – recommended – here.
[Thanks to MacDailyNews Reader “Dan K.” for the heads up.]
$115B
Way too expensive.
intel has already said they want to lease out their manufacturing capacity including their new 3d transistor tech. no need to buy the company
That’s a thought. Apple needs to have tighter control of their production. Although I don’t think they want to branch out from their Cupertino flying saucer anymore than they have to. But they can’t have it both ways. And a lot of Intel is in the USA. That’s the good old USA. I’m happy to see Apple building in different parts of the country. And I don’t blame them for going outside of California. It’s so expensive for a business to operate here. I think security will surely be an issue for all companies going forward. Security is an issue in many foreign countries. Natural gas will help bring many manufacturing jobs back to America. There will be a resurgence in made in USA. I hope that Apple can produce as much as possible in the United States. We have a lot of people out of work. It’s very sad to see people who want to work unable to find jobs. Americans can produce anything workers in any other country can do. And better.
Please don’t buy Intel
Gassee is even crazier to suggest this then he was when he tried to extort Apple for Be. Intel is full of problems Apple doesn’t need distracting them.
Glad Steve and Next won that round…
RTFA, dumbass. Gassée suggests no such thing.
If you knew Apple’s history with Gassée, you would have understood the comment.
This guy is high to even suggest such a thing. Much cheaper to build your own semiconductor fab. They already have the chip designers inhouse.
Gassée suggests no such thing.
Yea it would be pointless for apple to buy intel if they are moving ahead of intel in mobile CPU tech and apple could build the manufactures to work better for mobile CPUs
Instead of buying Intel Apple could also buy Google – and shut it down !
I had a conversation about this a couple of years ago with a friend who works in chip design. He told me that if Apple did this, they’d save about 20% of the power that all of the CPUs in their mobile devices consume, due to Intel’s fabrication process.
If Apple still cared about Microsoft as a competitor, they could buy Intel and relegate Microsoft to the ash heap of history by announcing “X86, end of life in ten years.” Nobody ever wanted Windows on anything other than x86, and Apple could move the Mac to a 64-bit ARM or some entirely new processor architecture just as smoothly as they made the PPC to x86 transition.
I don’t think Apple has any intention of doing this, but I sure would love to see it happen.
-jcr
Smooth PPC to Intel transition?
We keep an old PPC machine around just to run Classic software that is not available for OS X. The transition was only smooth for lightweight users who switched to OS X without any serious legacy Mac investment — mostly previous Windows users who were wooed by Apple’s moderately successful “switch” advertising campaign.
The idea of shutting down x86 chip production in a decade is too ludicrous to even contemplate.
However, if Apple’s leadership was smart, it would buy investments in other key tech companies’ stock, not just its own. Ownership doesn’t have to be 100% in order to apply useful pressure on Intel & guide timely product development schedules that better meet Apple’s needs. Buying back Apple stock is a waste of resources used to manipulate its own share price only.
nice to have an old machine still
but my old ppc 8600 would never handle the video i do today
If Apple bought Intel and announced the EOL of x86 in 10 years, AMD would skyrocket and fill the gap.
If Apple bought Intel, why would they move to a 64-bit ARM or some new architecture that isn’t Intel’s strength?
Even if AMD didn’t exist, and in 10 years nobody emerged to continue x86 development, Microsoft would probably adapt pretty readily to another architecture. Furthermore, they could retaliate very easily (and legally). All they would have to do is not develop any of their software for the new Apple architecture and justify it by saying they’re dedicating all their resources to their own “10 year” transition.
Well, wouldn’t that be a bold step?
“MacDailyNews Take: Just keep buying 16% of the company every couple of years…”
My thoughts exactly although FOAD reason isn’t the same.
No idea whether it makes ANY sort if business sense, but I’d love to see it happen, if only as a giant F>ck You to the old “Wintel”
Intel comes with too many baggage, and it will never pass the regulatory approval process.
I don’t think that would ever happen. However I have always thought that Apple would buy AMD, even before they switched to Intel for its processors. I figured they would keep it in house and buy AMD and also get its Graphics Unit ATI for the video card segment. I’m actually still surprised that never or hasn’t happened yet.
This would be so awesome.
Just what is obscene about “Apple’s obscene pile of cash?”
Leave Apple’s “Trump Card” alone! Liquid Cash (not Liquid Metal) is good collateral.
Buying Intel is too extreme a step. Managing Intel would subtract a lot of time from Cook et al. If they need Intel’s production capacity better to enter into some sort of agreement. They could promise to buy all of the output from one or two fabs for example. Let Intel deal with the management of the fab and the people and the regulatory requirements.
Dumb. The last thing they want to do is design chips for the rest of the world to put in their pcs.
Does the author not realize that while Intels market cap is 115 billion, apple would have to pay a bare minimum of 30% on each share, and realistically that would be closer to 45%, almost 200 billion, even apple can’t afford that.
The DOJ would also block any such purchase. It would give apple a total monopoly.
No. They don’t need to build chips; just design them. Apple should buy Clearwire and build out the network. That would fit in very nicely in their overall scheme.
The idea isn’t even original and in an interview Horace Dediu (ASYMCO) conducted with Chosun Daily (15 April) this was put forward then.
Better to outsource to Intel when they open up their fabs.
I think this would be a brilliant move for Apple, wow what a powerhouse this would be. Intel is the best at manufacturing microprocessors so the combination and business savvy move would give consumers innovation never seen or thought of before. I hope it happens I would love to see this one materialize!