What should Apple do to prop up the company’s obvious growth problems (as in no growth for two of the company’s main products)? It’s almost as if the company’s executives expected the iPhone and Mac to grow forever. After all, planet earth has 7.5-billion inhabitants and the company’s products are owned by a mere 13-percent of the population so there’s plenty of upside, right?
Myopic Visionary Much?
Apple co-founder Steve Jobs seemed to have a sixth sense about products and how they would be accepted into the marketplace. His track record was better than most but had a few failures, too (NeXT, Mac Cube, iMac DV, iPod Hi-Fi, to name a few). Yet, Apple’s greatest growth period came under CEO Tim Cook’s watch, not Jobs. But Cook’s success was largely on the products that Jobs pushed into the marketplace.
Apple has plenty of cash. What should Apple do with the cash to start the growth engine again?
When it comes to spending money, comparing Apple to Microsoft, Google, and other tech giants is a fun exercise. Basically, Apple is rich for a reason. It doesn’t spend money. At least, not on big acquisitions (the largest of which was the Beats Music acquisition which brought in branded headphones to sell, and begat Apple Music which is moving close to a $2-billion annual business).
Tim Cook hinted that Apple’s historically tight-fisted approach to acquisitions might change, but didn’t elaborate. The company did buy 15 other companies in the past year but none were worth talking about.
What’s lacking in Cupertino is a vision of the future.
Instead, the company’s board and CEO seem intent on paying off shareholders with undeserved dividends and buying back stock; to the tune of tens of billions of dollars. What could Apple buy for tens of billions of dollars that would combine to grow revenue and profits?
Adobe – the company knows how to turn a profit, and the market cap is affordable for Apple, so why not? Buy Adobe, and stop the Windows versions. That would stimulate more Mac and iPad growth.
Tesla – the electric car company is more affordable than Adobe, and might have more upside potential. Apple Tesla has a better ring to it than Apple Car.
T-Mobile – I’m not sure how the lesser of the U.S.’s cellphone companies gets a market cap which exceeds $32-billion, but it’s affordable, profitable, and growing rapidly relative to competitors.
Hollywood – forget about getting into the movie and TV show business; just buy the whole thing, lock, stock, and a barrel of monkeys. $100-billion would buy any studios, and probably the top 10. That would jump start Apple TV
Cable TV – this is old hat but surprisingly affordable. Charter Communications just bought Time Warner and their market cap is barely $23-billion. Apple could pay for that with this year’s profits. Or, simply stock giving money back to shareholders who are doing nothing to help the company’s fortunes (except taking them away).
Politicians – this might be the acquisition that has the most value. Apple is sitting on tens of billions of dollars in foreign banks that cannot be re-patrioted (no squiggly red lines; is that a word?) to the U.S. without a huge tax hit. Buy some politicians and get the job done.
Cloning – no, don’t bother to clone an iPhone or Mac and sell it under a less expensive brand. I’m talking cloning; as in cloned sheep and dogs. Steve Jobs must have left some of his DNA around somewhere, and if ever there was a company that could use a clone of an iconic co-founder, it’s Apple.
Few companies have been blessed with the successes Apple has created since Jobs returned in 1997; none have the riches or design and manufacturing chops to produce so many successful products. What’s missing, and what cannot easily be purchased, is the vision to make the world move forward. Jobs had it. Giving away money to shareholders and buying up loose shares of the company’s stock won’t get it back.