Despite giving back tens of billions of dollars to shareholders in dividends, and despite spending tens of billions of dollars to buy back a depressed stock, Apple still sits on nearly $150-billion dollars in cash. Here’s how Apple needs to get Sirius about acquisitions.
Satellites And Headphones
The official announcement hasn’t made the headlines yet, but Apple’s intent to acquire Beats Electronics, the maker of trendy, stylish, and mediocre headphones for $3.2-billion is already old news.
What does Apple want with Beats, and why would a bunch of high priced and marginal quality headphones and a music subscription service fit in with Apple’s plans to grow?
Well, duh. First, Apple can afford Beats. The company made $3.2-billion in profits last month, so Beats is cheap.
Apple sells trendy and stylish products and so does Beats. Apple does not have a music subscription service, but Beats does. Apple doesn’t have a media executive with taste or experience (since Steve Jobs died), but Beats does.
Now, add some low power Bluetooth technology and futuristic batteries to some classy looking (that’s ‘looking’ and not ‘sounding’) headphones and Apple has suddenly become a major player in the nascent wearable technology industry.
Getting Sirius With Cash
What would go good better with iPhones, iPads, and iEars (my cleverly concocted name for Beats headphones) than Sirius XM, the satellite radio entertainment system, itself a mashup of Sirius Satellite Radio and XM Satellite Radio?
Nothing. Sirius XM would be a great addition to Apple’s stable of recently acquired companies. What’s the price tag? Sirius XM’s current market cap is about $20-billion, which is what Apple makes in profits in a few months, so it’s certainly affordable.
What would satellite radio do for Apple’s hundreds of millions of iPhone, iPad, Mac, and Beats headphone owners?
Sirius XM has barely 25-million customers and Apple could add to that number almost instantly by adding satellite reception capability to future products, including Beats headphones.
If Apple and Beats is a good bet, then Apple and Sirius XM is a match made in the nearby heavens. And Apple has the cash to make it work.