Apple getting aggressive with competitive new acquisition tactics

Apple has hired its first dedicated mergers and acquisitions expert and has initiated — in some cases — a three hour window of opportunity for acquisition targets in its tough new efforts to win deals away from rivals such as Google and avoid publicity that could sour deals.

According to a report by Bloomberg, Google has announced nine acquisitions so far this year. Last fall, Google chief executive Eric Schmidt announced plans to inhale a new startup company every month.

Apple hasn't made a similar announcement, instead preferring to keep its plans secret even as its executives described the company's cash pile as being useful in making strategic purchases as opportunities become available. But after making four iPhone related acquisitions in the last six months, Apple has analysts talking excitedly about a buying frenzy between it and Google.

Bloomberg cited analyst Charlie Wolf with Needham & Co. as saying, "It looks like there’s an acquisition frenzy going on between Google and Apple in the sense that there’s an increasing urgency on Apple’s part to stay even if not ahead of Google in the phone space and apps space."

Last year, Apple "hired a Goldman Sachs Group Inc. investment banker, Adrian Perica, to help the company develop deals, people close to the company said earlier this year," Bloomberg stated. "They say they believe Perica is the first dedicated M&A specialist on Jobs’s staff."

"To avoid publicity and possible rival bids, Apple in some cases has offered a target only a three-hour period in which to accept the terms of a sale, according to one executive with knowledge of the situation," Bloomberg noted.

Apple's cautious, strategic acquisition history

In the last decade, Apple has largely only purchased a series of strategic, small software companies in its efforts to build a development team to create its suites of pro apps and iLife titles.

Between 2000 and 2006, Apple bought Astarte and Spruce (DVD Studio Pro), Nothing Real and Silicon Grail (Shake), Emagic (Logic Pro), Prismo (Motion), Silicon Color (Color) and Proximity (Final Cut Server).

The company also bought PowerSchool for its student information system software it later resold, and Zayante, a FireWire chip and software developer.

Apple's Mobile acquisitions

However, starting in 2005, Apple began buying companies to help it enter the mobile market related to its growing iPod business. It snatched up the assets of FingerWorks, which had developed multitouch technologies later used in the iPhone, followed by PA Semi in 2008. Apple chief executive Steve Jobs said PA Semi would be building chips for iPhone and iPod devices.

As Apple's mobile business has exploded, so has its strategic shift toward mobile-related acquisitions. Last summer, the company appears to have acquired Placebase, suggesting that Apple might build its own mapping service to reduce its dependence upon Google.

Last winter, it made subsequent efforts to buy mobile advertising company AdMob. When Google stepped in with a winning counteroffer, Apple bought the competing Quattro Wireless instead. Apple then bought music streaming service LaLa, which had been in serious talks with Google.

In April, Apple bought Intrinsity, which developed chip technology used in the iPad's new A4 processor, followed by Siri, a mobile search applications developer.

Apple ready to buy

Rather than just trying to keep pace with Google, it appears Apple is trying to prevent Google from buying up key mobile assets; Google appears to be doing the same thing. After Apple lost out to Google in buying AdMob, Jobs complained to his employees at at company event that Google "snatched them up because they didn’t want us to have them."

Apple now has around $41.7 billion in investment assets it can "liquidate in a day," according to the report, compared to Google's cash pile of $26.5 billion.

Apple's chief financial officer Peter Oppenheimer recently reiterated that the company's investment strategy continues to prioritize "preservation of capital, which has served us well in the current environment."

That has some investors, including Michael Obuchowski, the managing director at First Empire Asset Management, recommending Apple put its cash to work. “I want them to reinvest their cash in the business,” Obuchowski said. “They are sitting on more than $30 billion in cash that is earning close to nothing.”