Apple Has $51 Billion and a Shopping List. Is Facebook On It?

There would still be the problem that AMD always lags behind Intel in fab technology, which is why they have trouble going after the highest-performance and lowest-power segments. No matter how much cash you have on hand, there's no quick fix for that. At least with Intel CPUs, Apple products can generally match the performance of any competitor, and any price premium can be attributed to the better industrial design, integration, and software. If Apple switched to AMD processors, most of their computers would now be afflicted by a performance deficit in addition to the existing "Apple tax".

NVidia doesn't seem like a tantalizing acquisition for anybody except perhaps Intel, if they can admit that they don't know how to make a good GPU. NVidia has been mostly squeezed out of the chipset and integrated graphics markets by Intel's shady tactics and the awkwardness of AMD now owning ATI, and the discrete graphics war hasn't been going well for NVidia for quite some time, with no respite in sight. (This month, AMD will be releasing their third consecutive generation of GPUs that soundly beat the competition in price/performance comparisons at most price points. NVidia can't really do anything about it in the short term, because their chips are simply bigger for the same performance, so their profit margins are lower. They've been trying to mitigate this by focusing on HPC, but that's not catching on quickly enough, either.)

AMD is worth way more than their market cap, right now their market cap is depressed because of the tremendous debt. if apple bought AMD, they would probably lay off 2/3rds of the company, retain IP and pay off the debt; which is between $2-$7billion depending on how you count the cards. http://www.fool.com/investing/general/2010/07/26/amd-reshuff...

secondly, when a company with a solid stock price buys a company they don't need to do it for cash, they can do it with stock and conserve cash. some will even debt finance.

3rd, on a 5 year basis, apple has a net of $4-5 billion a qtr or $20 billion a year, so they could probably safely debt finance $100+ billion at 3% or 4%.

The rest of those are bad choices for Apple. Apple is what it is because it focuses. I think none of those companies are in Apple's focus.

However, Apple could buy Clearwire- Clearwire has very valuable spectrum licenses in the USA. This might be justified, but since Apple is a global business, it isn't a slam dunk, as whoever controls WiMax spectrum internationally would need to be contended with. On the third hand, they could use that spectrum to create their own LTE network in the USA, and still have enough spectrum on the side to create a parallel high bandwidth data-only network.

Hmmm.... Clearwire's market cap is $1.6B. They might need to buy sprint too (and then spin out the telecom business) to get full rights to the clearwire spectrum. (not sure about what the agreement is.)

Netflix is a great company with great management. But the streaming rights won't transfer thru an acquisition, I'm pretty sure. However, giving netflix a spot in the iTunes ecosystem seems like a good deal, maybe take an equity stake in the process, sure.

EA- no need to buy them, balloons headcount, very different business. EA will either put out the apps for Apple's devices, or other companies will beat them to it. Apple's in a strong position.

I'm not sure about Cablevision.

I think Apple should buy Adobe, though. I'm sure they still have some talent left, and owning what's left of the desktop software market would be good for Apple.... but that is a "mac primacy" play, and I think Steve and the rest of Apple is focused on iOS exclusively, so I'm sure they won't buy Adobe.

PS-- I realize your point was that they have the capital to buy all those companies if they wanted to, but I'm looking at it as a shopping list.

I'm pretty certain Apple has plans for the $51B. They could spend some of it buying back their stock, or as a dividend, but both of those are non-growth company strategies, essentially giving the money to investors and saying they can't manage it well.

I think Apple has its eye on some very big opportunities.

I think one of those opportunities is putting $10B-$20B into a vertically integrated automated manufacturing facility.

They cannot continue to scale their business on the backs of foxconn. At some point, this is becomes the biggest inefficiency, even though Chinese labor is inexpensive, it won't always be, and when it becomes as expensive as korea or singapore or even japan, where will foxconn move?

I think pure automation is the solution. Foxconn needs to be able to build anything, Apple just needs to build the products it desgins. There is a position to squeeze a lot of cost out.

And the other argument? Apple did it before. The Macintosh factory was a wonder of its age, and extremely automated. IT was designed along with the macintosh.

I think Apple is learning from foxconn, but eventually will need to build their own manufacturing base. Simply because you cannot keep doubling your device numbers forever.... foxconn will still build a lot of stuff for apple, but I'm waiting for Apple to take over a chunk of it.

Has it made a difference to Apple's recent history that everyone knows it could buy Adobe? Do the CEOs of AT&T and Verizon have to face the possibility that Apple could buy Sprint and run its own network? I say yes, and I say Jobs likes it that way, and his comments should be interpreted in that light.

My (personal, not reflecting on my employer, etc) feeling is that Facebook wouldn't take the offer. Zuckerberg doesn't even want to IPO yet because of the limited amount of control he'd give up. Even if Jobs offered every last penny of that $51B, plus stock and a magic pony, I don't think Zuckerberg would take it.

I can't say your opinion isn't rational, but.. Apple is weird. The iPod was far away from what Apple did best too. As was the iPhone. As was the iPad. I admit, they're all at least hardware, but Apple is pretty diverse and I can at least imagine them taking such a leap (see Logic, iTunes, iWork for software examples).

Let us compare: Founded by a charismatic visionary, check. Highly aesthetic products, check. Fulfilling dreams of fantasy and the future, check. Communities of cult followers, check. Popularity driven by youth culture, check. Spare no expense nor detail to achieve perfection in design, check. I could keep going...

If Apple suddenly becomes responsible for the whole shebang then it'd probably tarnish their brand somewhat. I'd imagine that's why they came out swinging after "Antennagate": for the first time people could blame Apple for some of these AT&T-issues.

Mobile phone companies are not a unique market for Apple that can be i-stamped and sold. All carriers support competitor's products which cannot be easily removed.