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Comment by ArtWomb | Hacker News Reader

Cash on hand now upwards of $230B. Your average CNBC talking head would probably recommend a large acquisition soon. Names usually whispered about include: Uber, Tesla, Snap or Netflix. Or a content studio such as Comcast, Disney, or Fox.

But such advice ignores the gargantuan growth that cloud services are experiencing right now. Although iCloud, iTunes, ApplePay and the AppStore are almost solely focused on consumer internet and retail. It's conceivable that $APPL would make a push to deliver more SaaS offerings. Perhaps analagous to Adobe's Creative Cloud suite for profession digital content creators.

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This nonsense goes on every year and these people just don't get Apple.

They are a company that resolves entirely around their culture and their ways of doing things. They even have their own internal university that teaches it to their managers. Apple makes a dozen or so acquisitions every year but they are almost always small companies whose cultures typically ends up being eliminated over time.

Buying a large company would make it impossible for this to happen and so I just don't see any of this happening. Not to mention the companies you listed there are completely ridiculous.

Apple doesn't acquire companies outside of their realm. They're not going to buy Tesla, or Sony, etc. They know what they do well. I don't see them spitting out TV's, either. That's something they could have easily done already.

There are sooooo many companies that offer a "university" - do they make you attend school for 4 years solely, working at most part-time? Just more marketing mumbo jubmo.

They should buy Sony. It would give them:

- Universal Studios

- PlayStation (aka a big foothold in the living room) and some of the most creative game studios

- Awesome displays (TVs)

- Bigger footprint in the consumer electronics market

- ... and most important of all the best camera sensors in the market (including camera phone sensors).

The console market is minuscule compared to the phone market.

Sony has only sold 75 million PS4's since it was released (https://www.businessinsider.com/ps4-playstation-4-lifetime-s...). Apple sells almost that many iPhones in a good quarter.

TVs are big and bulky and have something like an 8 year replacement cycle.

82m as of today: https://venturebeat.com/2018/07/31/playstation-4-sales-pass-...

5 years to sell 82 million?

Apple’s Watch business will probably do better than that 5 years from introduction. It’s probably more profitable.

But it would be 82 million Apple TVs overnight after a software upgrade.

Not to mention PlayStation Vue could become Apple Vue.

And PS Vue would only be of use in the US.

At the end of the day, PS Vue doesn’t offer anything compelling enough to acquire. A few subscribers and a bunch of licensing deals to broadcast TV over the Internet. Apple could get the same deals as Sony, Sling, Directv, Hulu, etc. Cable networks aren’t exactly being stingy about licensing.

There's no way that Apple would allow tvOS to run on unaudited hardware like the PS4.

"TVs are big and bulky and have something like an 8 year replacement cycle."

Exactly. TVs are basically furniture.

I was off - I’ve seen reports of 10 years....

https://www.digitaltveurope.com/2017/11/22/ihs-tv-replacemen...

Yup and music / hollywood content library. It's a match made in heaven but Mr Cook is going to spend 1 trillion on paper stock before he does anything else...

Again, there is a ZERO chance a Japanese company would allow an American company to take it over for cultural reasons. That won't happen.

Sony is not a Keiretsu. They are fair game.

Consider the other way around. Would Apple want to buy a decades-old consumer electronics company? Sony has been stagnant in my eyes, even before the NKorea hack.

Have you checked the direction of Sony's stock lately?

IMO, This is an invalid, outdated view of Japanese culture.

Japanese companies, even large culturally important brands, get purchased by foreign entities. A controlling stake of Sharp was purchased by Foxconn two years ago, for example.

Universal Studios is owned by Comcast [1].

[1] https://en.wikipedia.org/wiki/Universal_Pictures

You are correct. My bad, Sony owns Columbia Pictures not Universal.

Sony does not make it's own display panels.

They have been buying LCD panels from Samsung of South Korea in a joint venture:

https://abcnews.go.com/Technology/story?id=4344101&page=1

And their new OLED TV is mostly the work of LG Display:

https://www.theverge.com/ces/2017/1/10/14222986/sony-bravia-...

The selling point of Sony TV's is not just the panel but the processing, similarly to how Apple does not make it's own camera sensors, but it does do a lot of it's own procession to optimize your photos.

As a shareholder, I'd say the best way to put this to use is to buy back shares. Although it's tempting to see them enter new product categories, I'd be afraid they would just blow money on things that ended up failing.

How is buying back shares a better usage of the money? Sincere question

The market is a more efficient mechanism to allocate capital than a single set of executives at a company.

As an Apple shareholder, you don't want Apple deciding where to invest your gains. You want those gains so you can decide where to invest them yourself depending on your risk profile , investment thesis, etc.

If this were true we wouldn’t need entrepreneurs

It props the price of shares up.

Because large acquisitions almost universally turn out to be disasters, whereas stock buybacks at an 18 P/E ratio is a 5.5% return if profits don't grow and higher if they do (which seems likely).

It's a tax efficient way to deliver value to shareholders. If you want to be an Apple shareholder, you'll definitely be happy owning a slightly larger piece of Apple. You may or may not want to own Netflix, but if you do you can already go and do that without Apple deciding for you.

The only M&A deals that I would want to see would be ones that help in their core business of selling technology to consumers. That would probably be companies no one has heard of that make and design components for future devices, semiconductor companies, etc.

If I'm Apple I'm earmarking some money for AR development. ARKit is really solid and should get better w/ time. That can provide a nice launching point for developing AR glasses. If anyone can pull off tech glasses it's Apple.

Not sure about the glasses. But Niantic's new state-of-the-art AR title will be massive ;)

https://www.harrypotterwizardsunite.com/en/

Apple is spending billions (maybe even tens of billions) every year on AR/VR.

Tim Cook has already said so and it's exemplified by some of their recent hires:

https://variety.com/2018/digital/news/apple-cyber-paint-app-...

John Gruber already made a remark about Mike Rockwell's title being "Head of AR/VR" when he interviewed him at WWDC. Even though Apple has no VR products.

What about Spotify? Seems like a cheaper company that is beating Apple at a game they want to win.

Apple Music pulled ahead of Spotify in the US market as of this month, in terms of subscribers.

Why would they? Apple Music is already growing faster than Spotify....

https://www.forbes.com/sites/careypurcell/2018/05/15/with-50...

Apple Music is growing its user base substantially faster than Spotify is, and according to some reports, already has more paid subscribers in the US.

https://www.digitalmusicnews.com/2018/07/05/apple-music-spot...

Also, Apple Music has a much higher percentage of paid subscribers (90–95%) than Spotify (just over 50%), by virtue of not having a free tier. That probably means that Apple's music service isn't losing them money, unlike Spotify (or at least, isn't losing money as fast) -- Spotify's advertising revenue is only about 10% of their total.

So, I can't see a really good business case for that.

There's no money in running a music service.

Labels have all the leverage, since the value of a streaming service is in having access to all music ever produced, so they will negotiate their way to approaching 100% of the excess that is left after paying for the overhead of running a streaming service.

Nintendo, it would get them some very sought after IP.

But its cloud runs on AWS and/or Azure and/or Google Cloud?

https://thenextweb.com/apple/2018/02/27/apple-confirms-it-ru...

Edit: SaaS growth has hard technical requirements and is a key qualifier in parent comment.

Edit 2: Everything after "but" is the take I'm reading.

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