No, it’s not software cash cows– Microsoft’s big money still comes from Windows and Office. No, it’s not giving away software that tracks and stalks users so they become part of the product– Google’s big money still comes from advertising. What is it that Apple does so poorly it cannot compete with Microsoft or Google?
The Open Checkbook
Apple’s executives and board of directors must all be of the type that have never taken a risk in their business lives. How else do you explain Apple’s anemic acquisitions record. Yes, Apple buys other companies, but they’re usually small, don’t cost much cash, and feature technology that Apple wants to integrate into its products.
Why doesn’t Apple join the acquisition party and show off some real money chops. You know, like the many tens of billions of dollars that Microsoft has wasted in recent years on dubious acquisitions. Apple just doesn’t have the intestinal fortitude to blow away billions of dollars in hard earned cash.
The best Apple does is a few hundred million here and there, except for the $3-billion acquisition of Beats Music, and the $1-billion investment into Chinese ride sharing giant Didi; which in itself was more of a payoff to keep the wheels of China’s government from putting up a speed bump for Apple’s future businesses.
Microsoft is a rich company. Apple is a rich company. But Microsoft’s ability
to throw away money on dubious investments invest in the future of a Microsoft cashless society makes Apple look like Uncle Scrooge McDuck.
While Apple was onstage introducing the company’s four OS products, Microsoft was wrapping up a deal to spend tens of billions on LinkedIn. That’s after the company spent billions on Skype, aQuantive, Fast Search, Visio, Yammer, Nokia, and many others, including a $5-billion stake in AT&T.
Meanwhile, what has Apple done?
Most of the acquisitions Apple has closed in recent years are of companies so small no price tag was announced. There was $30-million or so for Mapsense. You know where that technology went. There was $20-million for an Israeli camera company. $50-million for a music analytics company. $30-million for a music streaming technology company. PrimeSense got about $300-million from Apple. The result is the astonishing A-series CPUs in iPhone and iPad. Over $300-million for Authentic which helps make Touch ID what it is today.
Outside of the Beats acquisition and the Didi investment in China, Apple just doesn’t know how to blow money on buying other companies; and certainly can’t play in the same league as Microsoft; and not even Google.
The search engine giant insists upon spending cash for companies and technology that go into a prolonged beta project and never reach sufficient maturity to bring in money as a return on investment. Half a billion for Dropcam. Half a billion for Skybox. Almost a billion dollars for various and sundry artificial intelligence companies. Over $3-billion for Nest. Nearly a billion for Wayze. Another half-a-billion for a social media marketing company.
Then there’s the $12.5-billions spent on Motorola and other companies just to get a bucket of patents (which haven’t proved worth the expenditure).
What’s wrong with Apple?
When it comes to blowing money on worthless acquisitions, Apple is a neophyte, an amateur, a company without the intestinal fortitude to risk public embarrassment by spending money frivolously.
Apple could buy Adobe and Tesla this year and still make more money than all competitors combined.
Poor Apple. They’re so focused on making great, usable products, and caring for customers that they have lost complete site of how technology companies are supposed to work.