“Apple Inc. detailed its first decline in iPhone sales Tuesday, part of an earnings report that broke up more than a decade of continued growth for the tech giant,” Jeremy C. Owens reports for MarketWatch. “To cure Apple’s growth problems, Chief Executive Tim Cook suggested he may go shopping.”
“Cook said Tuesday that Apple had acquired 15 companies in the past four quarters, though it appears none were material enough for Apple to inform investors about individually. That could change, though, as the Apple CEO admitted that he is open to a large acquisition,” Owens reports. “‘We’re always looking in the market about things that could complement things that we do today, become features in something we do, or allow us to accelerate entry into a category that we’re excited about,’ Cook said, adding later, ‘We would definitely buy something larger than we bought thus far.'”
“Apple’s largest acquisition in its history was the $3 billion purchase of headphone maker Beats Electronics LLC in 2014, and most of Apple’s other purchases have not come close to that total,” Owens reports. “With that in mind, Cook’s statement Tuesday turned some heads. ‘They haven’t said as much publicly before, so that’s the real change,” JackDaw research analyst Jan Dawson said.'”
Read more in the full article here.
MacDailyNews Take: Cue up a replay of the “Apple to buy Tesla” scuttlebutt.
On a purely personal level I wouldn’t mind them buying Netflix for their library of original content and then folding that into Apple Music (renamed hopefully) subscription. That would likely be enough to make me take the plunge. Currently I get amazon by way of my prime membership and that suits me well enough for how much music I listen to.
Yes this has GOT to happen!!! I really think so and if only because investors will love it!
Apple strives to develop business that has 40% gross profit margin (or more) as goal, so Netflix will not do the trick.
And yet, I don’t think they’ve ever had this margin on services. Perhaps that’s the rub?
A lot of Apple’s financial problems is the weak economy which is also affecting everyone else. Another is that the bulk of of the iPhones decline was because of a decline in sales in China. That means the US market is saturated with high end phones.
That’s Tim Cook’s excuse, the iPhone market is saturated and the world economy depressed. It’s always someone else or something else when something bad happens, but when Apple is riding the wave it’s all because of Tim Cook’s genius.
Part of the issue is Macs with SSD are way overpriced.
http://9to5mac.com/2016/04/26/opinion-apple-macbook-storage-problem/
I know at least 20 people who had planned to purchase a mac and backed off after discovering a 15 inch MacBook Pro with 16gb and a 512gb ssd cost $2,500.
That is a about $600 over priced.
Apple’s salvation will not be Mac sales. They have been in business long enough know their market and what the price elasticity is. They could drop their price $600 dollars, sell another million computers, and make the same or less total profit because of lower margins. Why bother?
The only argument that can be made for upgrading Macs is corporate image. Macs may be good computers, but you can’t consider them anywhere near state of the art. That may not matter to Apple’s target market though.
Steve Jobs –
“What ruined Apple wasn’t growth … They got very greedy. Instead of following the original trajectory of the original vision, which was to make the thing an appliance and get this out there to as many people as possible, they went for profits. They made outlandish profits for about four years… What that cost them was their future. What they should have been doing is making rational profits and going for market share.”
i dunno, but “hinting at a big acquisition to cure apples ills” has the whiff of desperation….. looking for something OUTSIDE of the company to ride in like some melodramatic bow-tie hero with a money back guarantee to put things right.
seems we have been here before, with tim cook enthusing about great products in the pipeline, almost ready for primetime only to wait and wait and wait and then find that somehow they weren’t really all THAT amazing.
it increasings looks like mr. apple has lost the thread.
the bean counters are gaining influence, playing wall streets game. going into debt to do buy backs that do not seem to have paid off for us shareholders,
macs no longer on the cutting edge of performance.
increasing emphasis on web services as an important source of future revenue – despite the fact that they are far, far from their strong suit.
perhaps effectively betting the future of the company on the apple car (capital intensive to get up and running and will likely be more expensive than most people can afford to spend on a car – there are way more of us non rich people than there are rich people)
tim cook was a logistical and supply line genius, that might well have been the perfect position for him – it has not gone unnoticed in many circles that things have not gone so well in that department since his move upstairs.
maybe the company is more in need of a visionary at the helm than a highly skilled technocrat.
The one time I saw Jobs speak live within the company he said that focussing on profits would result in failure. The road to success is seeking excellence first. It was a secular paraphrase “Seek ye first the kingdom of God and all these things will be added unto you.” Prophetic.
There is certainly a whiff of staleness that is concerning. We all thought that Jony Ive was going to be that visionary. Now you need a vision just to see him. If he isn’t in that role then who is? There seems precious little indication that one or more with that vision are working behind the scenes, even considering the smoke and mirrors of Cooks words. The products simply do not at present indicate even the secretive existence of such a person(s) and that is a little worrying especially considering the Car will need every drop of that particular essence available.
Get Intel out of Mac’s and increase the margins, Intel is pulling a IBM, Motorola on Apple right now.
Only two Macs even use Intel’s latest chipsets. The rest are at least one generation behind, or more. Apple has been slow and inconsistent about rolling out Thunderbolt and USB-C. Apple’s RAM and disc specs are increasingly out of line for the price they charge.
I’d say the problem rests with Apple, not Intel.
If they used a standard connector instead of a proprietary one, you could upgrade it yourself for a lower price. Or even if you couldn’t get a lower price, you could use the old drive for fast external storage. That’s the great thing about the regular MacBooks which came with hard drives; the drive uses a SATA cable, which is great because SATA Solid State Drives cost a lot less than their NVMe counterparts. The other nice thing about those older MacBooks is that the optical drive can be replaced with a hard drive for extra storage, which is particularly good because it allows you to avoid spending more on a Solid State Drive and it gives you more internal storage.
How does a 512 gigabyte SATA Solid State Drive and a 2 terabyte hard drive sound?
Sounds almost like my 2012 quad core i7 Mac Mini.
Everything is on the SSD except for the iTunes folder, pictures and VM’s, which are on the HDD.
The mac updates are the slowest in the industry, by a wide wide margin. Can’t charge top dollar for yesterdays tech.
Not sure what’s happening @ Apple, but things need to be moving a lot faster.
Totally agree.
The interesting thing, though, is to look and see that Apple isn’t really any slower than they’ve always been. It is just that tech moves so much faster today. Waiting 6 months to upgrade to the newest processor used to be acceptable, perhaps even fast, but it isn’t accaptable any more.
Like in the discussion above about SSDs. Remember when we used to wonder how long it would take for a TB HD to become reasonably priced? Now you can get 1/2 TB SSDs reasonably, but Apple is behind on it. Waaaay behind.
Top dollar for yesterday’s tech doesn’t work anymore, Apple. Sorry.
The A-Series chips by Apple are on a faster path than Intel, it is time to move on.
I know where they could get a quick $999 – ME! Release a new Thunderbolt 3, 5k Cinema Display dammit!
So true!
The lack of Apple Display updates should be included near the top of Apple’s missed opportunities. Larger capacity Time Capsules too.
Buying Tesla would work if Apple could fix the supply and production issues. If Tesla actually fulfilled its orders then they would break even at least.
Tim Cooks greatest skills are supply chain. But building in-house (like Tesla) is a lot different than having several contract manufacturers who are fighting over every contract to build Apple products.
If Cook’s greatest skills are in supply chain, then he needs to resign as CEO and go back to what he was supposedly so good at doing.
MDN should be reminded that on Tim’s watch, the iPhone SE was rolled out in insufficient numbers to cover demand. Is there some reason that Apple keeps shooting itself in the foot on product launches?
Was Apple somehow surprised at the pent-up demand for a 4″ phone when they hadn’t offered an update in that size for several years??? WTF? The huge waves of iPhone demand are a function of Apple’s own making. Consistent and timely updates for hardware would dramatically smooth out the demand curve and allow Apple to show consistent growth that investors want to see.
Buying another company is not a substitute for innovation. Reissuing devices conceived under Steve jobs in small or large sizes is not innovation
Steve — we miss you. The Apple Team is scratching its collective head and wondering wha to do next. Purchasing another company will make Wall Street deal makers happy and rich. But it will not solve Apple’s failure to come up with a convincing product after Steve Jobs.
The watch is a failure– it’s an answer looking for a question. It is a Zune that will not make much difference beyond sucking a lot of cash. iOS and OS X software are buggy.
Apple’s best days appear to be behind it.
Fix what you have Apple.
Exactly; just 5 minutes ago I tried to set up a spreadsheet in icloud Numbers.
(before we start, YES i did read through the instructions, and I did go into it with a worshipful attitude toward Apple products since I am a user since 1983.)
highlight a cell, try to type text in it, nothing happens, despite repeated attempts.
Fire up Open Office, 30 seconds later I am rolling.
No I dont want to back to Windows, only go there to check the websites I produce, so the trolls can just not start.
Apple, just what do you expect from us? Have owned 50+ Apple devices since 1983 including 8 workstations for employees at one time.
Don’t go buying stuff until you fix what you have!
Nonsense. Apple is arguably one of the most innovative tech companies out there. The issue isn’t one of innovation because you an be as innovative as you want, if consumers aren’t into it–Google Glass–then it’s isn’t going to happen.
Apple Watch also isn’t a failure, though it’s apparent that you wish it were.
This is a prime reason I cannot stand the way companies are valued. This is such bs because some analysts thinks Apple is growing too slowly or whatever, so apparently this enables these people to dictate Apple policy.
This is such crap and while I don’t necessarily blame Tim Cook, I hate this reactionary way of running a company.
Besides, I am reasonably sure that Steve Jobs would have told the very same analysts to go fuck themselves, that is, if he paid them that much attention.
My point being, nothing grows forever. This myth we have a companies growing ad infinitem is not only silly, but it’s potentially dangerous.
Indeed growing fast for a large company like Apple, at say 25% per year, would result in Apple having a $5 Trillion market cap in 10 years.
Not likely.
It’s just unsustainable (especially at the levels Wall Street apparently wants). That’s what I mean, companies keep chasing these often impossible gains, which dictates how they’re run. It’s bizarre, and needs to stop.
Buying Tesla would be interesting but I doubt Apple has the stomach for it – they turned down a chance to buy them earlier for a lot less than they would have to pay today. I don’t see it happening though it would be kinda nice to have my two favorite companies become one. Both are on a mission to change the world and improve humanity. As much as Apple has already done that at the intersection between technology and liberal arts, Tesla has a chance to meet and exceed it through the wholesale conversion of how we produce and use energy (solar homes, battery backups for personal and industrial uses, autos, charging infrastructure).
Will Apple buy Tesla? I doubt it. Would it possibly be beneficial for both companies? Probably. Does either company absolutely need each other? No. If Apple is hell bent on getting into the auto business (which seems more and more likely), they probably ought to bite the bullet and get married. To compete with each other would not be pretty.
If Apple bought Tesla they would get Elon Musk. That could take care of what many analysts and MDN commenters say is Apple’s biggest problem—no strong-willed visionary to take the place of Steve Jobs.
Apple buys Nintendo, Netflix and Tesla….
The world explodes.
They should by Dyson too… Then Apple can learn how to make new products that do not suck.
LOL
Nintendo’s acquisition would immeadiatly end hardware development at the company instead lending hundreds of touch, motion, and vibration patents to Apple’s portfolio. Second, it would turn the App Store into the worlds most talked about most visited software store. Imagine the likes of Mario, Zelda, Splatoon and Pikmin all being exclusive to Apple. Even better, games for the Apple TV would gain a huge (and much needed) library boost.
Netflix is simple. Apple’s services are firing on all cylinders. Apple wants original content. Apple could easily roll Netflix and Apple Music together in a super combo for $20 a month. Regardless of how profitable Netflix services are, this move would bolster the content value added to every iPhone. Just as apps like iMovie, GarageBand and iTunes do now…
Tesla is a bit less likely in my opinion. Mostly just to fast forward their auto hardware developments.
Beats was a great way to throw a stack of cash away. No more stoopid aquisitions please
Purchasing Beats was a GREAT idea. Now, I am not talking doubt the sound quality of their headphones (or lack thereof). What I mean is that you walk around any relatively large urban center, what headphone will you see more of?
Beats. It’s a lifestyle brand, and I’d argue a very successful one. So Apple can not only apply their engineering know-how to the product, they also get the music business know-how of Jimmy Iovine and Dr. Dre, which helps in other efforts.
No matter what you think about them, it’s only a “stoopid acquisition,” when you let your own biases and issues get in the way.
” I am not talking doubt the sound quality of their headphones (or lack thereof). What I mean is that you walk around any relatively large urban center, what headphone will you see more of?”
OK, you are saying that even though the quality is not there (confirmed to me by an Apple store employee friend) you see a lot of them.
So, that is a good thing? and Apple should do more of that? D
Does anyone see a problem here…….and are we seeing more of it, not just in the Beats purchase? hmmmmm
The point being, Apple is a company, and as a company it’s there job to sell things (and conversely, to make us want those things).
So yeah, Beats was a great purchase. As I wrote, hopefully Apple will use their know-how to improve the brand, but they’re making money, which is the point.
Unless you think there’s some sort of altruism involved.
You can’t make long term profit on an item of marginal quality.
I know people try it all the time and actually do make money for a few months, or maybe even a few years until momentum catches up to them. It always does.
That’s true, if you’ve seemingly missed the parts of my comments about Apple’s contribution to their process. With Apple’s engineering know-how behind Beats the only way that they don’t make some of the best headphones in the world is that they don’t CHOOSE to make some of the best headphones in the world (for the price).
And that’s entirely possible, though that would be a choice, not happenstance.
We expect the best out of Apple just because they can produce it……or were able to. Why should they back away from that when tht concept got them where they are……..or at least at their high point? I suppose everyone comes down off the mountain, but it didn’t have to be so.
Who said that they were backing away from anything? That’s your interpretation of what’s happening. There’s literally nothing that says that Beats can’t manufacture–literally, not figuratively–the best headphones in the world for the price you pay.
Now, whether or not they do so is up to them, but that’s a choice.
And of course you can make a profit on an item of marginal quality. Happens all the time. In fact, Apple’s attention to detail can be argued to be an exception to the rule, not the rule itself.
Ah the possibilities.
-Tesla
-Yahoo
-Netflix
-Disney
-Comcast (and fire CNBC)
-A pet food company
-A medical marijuana grower
How about this: Apple buys 50.1% of MicroShit (they have the cash to do it) then effectively “shuts it down”. Then we have a genuine Mac-desktop-world, think about the prospects ahhhhh
I think Apple needs to re-focus on the pro market. Upgrade the Mac Pro. Enhance FCPX and come out with a new photo editing software.Bring back those users to Apple…Apple has turned their backs on the people that kept Apple in business for a long time
What if Apple bought Boeing and renamed the 787 the iLiner?
Ha! That’s funny. Apple wouldn’t have a clue how to serve pro markets, let alone life-and-death stuff like aerospace.
Apple would drive Boeing into the ground putting fashion before performance. Boeing makes insanely high levels of quality industrial products that require levels of support and precision that Jony Ives would never be able to comprehend.
It’s also very telling that aerospace companies all design their products with all PC-based software too. CATIA and tons of proprietary software that Apple has never attempted. You don’t do complicated aerodynamics simulations on an iPad.
Buying another company is a great idea! Remember AOL- Time Warner deal?
Yes, Apple can have another match made in heaven like that as Wall Street laughs its way to the bank.