Too many acquisitions?

  • Posted: 01 July 2002 07:55 AM

    In the last few months, Apple seems to be buying companies left and right.  What is it now:  4 acquisitions?  5? 

    Peter Lynch refers to this as “deworsification” in several of his books, explaining why this is a bad idea.

    It worries me.  Any thoughts?

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    Posted: 02 July 2002 08:04 AM #1

    Well, I wouldn’t have agreed, but for some reason, the recent purchase of Logic has had be feeling nervous. I can’t eplain why, just a gut reaction.

    Still, I think the Aquisitions Apple is making is a far cry from the diversification and conglomeration nightmare that exemplified the 80’s and the start of the Dot.Com boom. It’s not like Coca-cola buying a movie Studio, or Disney buying resorts and cruise lines.

    Many of the purchases have been technology aquisitions in related fields. Shake, Rayz, Chalise, and India Titler Pro, are all video technologies for video post-production: Compositing, color correction, effects and titling respectively. All of these could concieveably be combined into a single product, or added to Final Cut Pro. As such, this isn’t a matter of stretching a company too thinly over many unrelated areas, but focusing on a core section of their existing business: video software, and the hardware sales driven by that software.

    Perhaps that’s what makes Logic the odd man out in my mind. This is the first sign of a new software package for Apple. Fortuately, it fits in perfectly with Apple’s core audiance, services an area currently lacking in 3rd-party support (high-end MacOS X-compatable music development applications).

    Still, I’d like to know what Apple’s cash reserves are at now. Obviously that 4 billion dollar surplus isn’t an accurate figure anymore, and with the recent slowdown and guidence warning from Apple, I think it’s fair to say that a healthy cash cusiosn is warrented still.

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  • Posted: 02 July 2002 11:43 AM #2

    Most likely these acquisitions have not been expensive and often the companies have been purchased with stock.

    I believe each of these acquisitions make sense. It’s less expensive for Apple and saves time over in-house development.

    What’s interesting to note on the Emagic purchase is that Apple set a firm date for the end of sales of the Windows version of the software. This indicates to me that Apple has enough faith in OS X and its business plan to finally start restablishing itself as the provider of the best solutions in its focused markets and to start indicating to pros that embracing Windows versus the Mac may be a very costly mistake.