So far, Apple hasn't needed a large-scale purchase to acquire new business models. Microsoft buying Nokia on the hardware side and AOL buying Time Warner on the content side are good examples of major purchases that failed to add value to the purchaser. Acquisitions dilute culture which is why integrations often fail. Operationally, it's also because Apple has a strong culture and it wishes to preserve it. Including the "Why Apple should by Disney/Netflix/Twitter/Nintendo/Tesla" that get posted every few months.Īpple does not buy "business models" or customers or cash flows which is what large companies are valued for. R&D has increased over the years as Apple has approached technologies that require more breadth and diversity, from health sciences to autonomous systems, but it remains something that doesn't come close to even denting Apple's cash reserves.ĭediu also touches on Apple using its cash hoard to go on a shopping spree for other companies. Then, over time, growing them out to include things like silicon and machine learning. iPhone was primarily about using its existing competencies to much greater effect.
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IPhone–the most successful product of all time–cost almost nothing to develop certainly nothing that required Apple to dip into its cash.Īpple had to invest in multitouch and antenna technologies, to be sure, but it had existing experience and employees in everything from industrial to human interface design, hardware to software engineering. In theory could reduce the share count to a single share and there would presumably be a single shareholder who would own the company, making it "closely held" but the company's managers are still required to report and act as if it was public.Īpple also tends to spend less on R&D (research and development) than other companies in the industry because of the types of products it's thus far chosen to bring to market. It's why Apple can't just use the money to take itself private and avoid Wall Street, which has shown historic lack of vision when it comes to Apple, its products, and its potential. It all comes down to the cash belonging to the shareholders. At 15%, Apple not only believes the loss will be acceptable, it will no longer be able to avoid it. So, it took out loans against the cash in order to pay dividends and buy back shares.
At 30%, Apple believed it would lose too much of shareholders' money by bringing the cash to the U.S.
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