Kevin Bostic
Speaking at Goldman Sachs' Technology and Internet Conference on Tuesday, Apple CEO Tim Cook pointed to the company's "deliberate, thoughtful" mantra as a reason it doesn't typically acquire large companies but admitted it's not opposed to such purchases if the right one comes along.
Instead, Cook noted how Apple has actively been acquiring smaller companies that it finds as a better fit.
"If you look at the past three years," Cook said, "we've averaged about an acquisition every other month. They're companies where they have really smart people and/or IP. Generally speaking, we've been in many cases taking something they're working on and move the skills to work on something else."
Cook went on to cite the example of Apple's acquisition of PA Semiconductor.
"This was an incredibly skilled group of guys, and they could supplement an incredible group of folks and they were working on PowerPC at the time. We didn't have an interest in that, so we moved the skills to work on our iPhone and other engines. We will do more of those."
As to large companies, Cook said the company's patient and deliberate approach to acquisitions typically precluded such purchases, despite Apple's cash holdings in excess of $125 billion.
"We have looked at large companies. In each case, it didn't pass our test. Will we look at more? I think so. But we're disciplined and thoughtful, and we don't feel a pressure to go out and acquire revenue. We want to make great products. If a large company could help us, then that would be of interest. But, again: Deliberate, thoughtful is our mantra."
Marko Zivkovic
Wesley Hilliard
Christine McKee
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35 Comments
"Deliberate, thoughtful" is our mantra.
LOVE hearing this.
It was Steve's as well.
Deliberate, thoughtful is our mantra.
As opposed to, "Gosh, I just bought Motorola for $12.5 Billion. No idea what we'll do with it, but, hey, I couldn't stop myself."
I hope you're going to report on the other things Cook talked about, including his initial slam on Greenlight. What I find remarkable is that Cook and Apple continue to push support for their customers above all else. They want to provide products and all the garbage supposed investors are spewing is being pushed to the side, as it should be. I support Apple by buying their products and helping others who do as well. I do not support the fanatic stock market or any of those insane people who feel Apple owes them money because they trade. Apple doesn't need that money, they have enough of their own and the people who buy Apple products gave Apple that money. No investment fund ever helped Apple sell anything or provide Apple with any money to sell.
I don't own any Apple stock but I'm definitely long on Apple.
Sounds very reasonable to me on the big acquisition front.
On the small company front, with what Cook says they are doing, I am wondering how long the lockup period for key employees to stay on board?
I also hope they discuss with the company what plans they have for them. It would be a terrible shock to get bought for doing one thing and then find out you are going to be doing something else. I would think that is something that Apple would have to do in order to keep the new employees happy.
While this thoughtful approach is a good one to take, it may also lead to some companies slipping away. I remember about 2 years ago, Apple was in some preliminary talks with the company that had the Kinect technology that eventually got bought out by MSFT. You may lose some opportunities but overall, I think the Apple approach is the better one to take. You make fewer costly mistakes that lead to a less happy company.
[quote name="Quadra 610" url="/t/155929/apple-buying-small-companies-every-other-month-but-constantly-evaluating-larger-acquisitions#post_2276233"] "Deliberate, thoughtful" is our mantra. LOVE hearing this. It was Steve's as well. [/quote] The problem is that Wall Street doesn't want deliberate and thoughtful. Stock's down again today - almost 2% - because Cook said that they won't make crappy products and that Apple doesn't rely solely on hardware to generate revenues. Wall Street is full of idiots.