Former Apple CEO Sculley: Apple should buy big companies

“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.

37 Comments

    1. 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.

      1. 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.

        1. 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?

  1. 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.

    1. 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….

    2. 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.

  2. 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.

    1. 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.

  3. 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.

  4. 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.

  5. 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.

  6. 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…

  7. 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.

  8. 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.

  9. 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

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