While going through Apple’s recently-filed 10-K for FY2021, one number jumped out at Above Avalon’s Neil Cybart. It was the lack of cash spent on M&A. In 2021, Apple spent just $33 million – virtually nothing – on business acquisitions (M&A).
Since 2006, Apple has spent $20.6 billion on M&A with about half of the total tied to “business acquisitions.” The median is $1 billion per year. However, in 2021, Apple spent just $33 million on business acquisitions. That is the lowest amount since 2009 when Steve Jobs was still Apple CEO.
Why was 2021 such a quiet year for Apple M&A activity? For many, the pandemic will probably be positioned as a logical explanation… Diving deeper into that explanation, a number of logic holes appear. During the pandemic, there has been no overall decline in M&A activity in tech land. In fact, industry numbers point to a 50%+ increase in M&A activity as measured by deal count.
My suspicion is that 2021 was a quiet M&A year for Apple given where the company finds itself from a product pipeline perspective. For the better part of the past five years, Apple’s mixed reality/AR plans have been the catalyst behind approximately 20% of Apple’s M&A deals. Apple’s foray into face wearables is now right around the corner – so close that the company likely has the main ingredients to get a V1 and V2 out the door without the need for additional M&A. Meanwhile, long-term R&D projects like Project Titan are still too far away to lead to a sudden M&A rush.
MacDailyNews Take: Well, during this acquisitions lull, Apple did acquire $85.5 billion worth of AAPL stock so far this year.
So, it’s not like the company isn’t spending money.
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