Contact: Scott Denne
Though the rumored acquisition of Beats Electronics would signal a major change in Apple’s M&A practice (aside from being more defensive than a typical Apple purchase, at $3.2bn it would be the company’s largest deal by a factor of 10), a subtle change in its strategy has been underway since Tim Cook took the helm following the retirement of Steve Jobs two and a half years ago.
Under Cook’s leadership, we’ve seen Apple acquire 21 companies – 14 have come in the past 12 months alone, according to The 451 M&A KnowledgeBase. In the eight years preceding Cook’s tenure, Apple purchased just 16 businesses and only twice paid more than $100m, while Cook has done so on at least three occasions (AuthenTec, C3 Technologies and Topsy Labs).
It’s not just a change in leadership style that has spawned the change in acquisitions. Apple’s cash, while substantial under Jobs, has only increased – as has the pressure to spend it. Today Apple has about $150bn in cash and marketable securities; three years ago, it held $65bn. The competitive environment was different then: Spotify, having just launched in the US, hadn’t started to eat into iTunes’ revenue. Also, Samsung was still a distant fourth place in the smartphone market, compared with its position today as a close second to Apple, according to surveys by ChangeWave Research, a service of 451 Research.
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