Apple's $100B Waste: Tim Cook's Single Biggest Mistake as CEO

Apple places an enormous amount of value on this, often more than having the best possible product at the moment. A mature, wildly popular non-Apple product has its own institutional design continuity. This impedance mismatch can be dealt with in one of two ways, either by letting the discontinuity stay in the product mix, which leads to fragmented user experience across product lines, or to break the design continuity of the acquired product, which alienates the users that made the product so valuable in the first place.

A company like Tesla may have a strong focus on good design and design continuity just like Apple but by blending those two companies you create an obvious design dis-continuity in the joined organization which goes against their nature.

If you were not going to blend the companies, like the article suggests, what would be the purpose then? To create an investment company that has a portfolio of design focused companies that never interact with each other? That is not their business domain. And by Apple returning cash to investors, they are allowing investors to do exactly that. I can take my Apple dividend check and buy Tesla stock if I want to.

I think Tim Cook has shown surprising discipline with the cash stockpile Apple has. Apple knows exactly who they are and is not trying to be something outside of that.

I think he's right that the $100B spent returning money to investors hasn't bought the company much... while shares have been retired, the market cap hasn't really gone up.

This is consistent with Intel and Microsoft who, for the past 15 years have been spending billions buying their own stock and not having seen much return in share price as a result.

On the other hand, while I think Tesla is an interesting company, cars are completely out of Apple's area of expertise. Why buy a car company?

Twitter is actually similar- yes, it's a tech company, but it's not a company that makes a product and sells it, it's an online advertising play. This is, again, not Apple's business model. Same thing with Pinterist.

Buying Beats gives apple two products that fit its business model: The headphones are hardware that is sold at a nice markup. The audio services is a value add that increases the value of the hardware Apple already sells.

I don't see Pinterest or Twitter increasing the value of the iPhone over where it is now (with Twitter and Pinterest already integrated to iOS).

So, what could Apple buy that fits its business model and adds value to the company?

I think the producers of key ARM IP, and ASICs would be good choices. I think Apple's at a point where it might make sense to, rather than paying Samsung a premium, control its own fab. So, I'd look at buying TSMC, or even Intel. (though not sure Intel is cheap enough yet.) Less radically, I'd buy Imagination (The people who make the GPU cores Apple uses) and, in fact, if it were me, I'd buy ARM itself. Or at least keep acquiring the best ARM design houses.

Anyone else find this peculiar? A whole article based on the author's hindsight of what Apple's stock price MAY have ever been with no proof/facts.

Arguing that Apple could maintain focus by keeping the current management of acquired companies then begs the question: what value is there for Apple to buy a company if they are going to keep operating the same way they would before Apple bought them? But if there are going to be changes, how could that possibly not involve a loss of focus? I don't think there is a clever way to have it both ways.

There's also no coherent strategy for the companies listed: for example, buying Yahoo seems like a move to annoy Google, not a way towards a winning strategy.

As an AAPL investor, I only want Apple to buy companies that help Apple do better at what it is doing (hint: please buy up some companies to help make iCloud better!) not become some sort of Cupertino-based Berkshire Hathaway.

He might have well just cherry picked the companies with the best stock returns over the last 2 years and said Apple should have bought them, why didn't they see this. With the exception of Dropbox, (which they tried to buy) none of those companies really fit well at all. I doubt regulators would even let them buy both twitter and facebook.