Who Apple Should Buy With Their $7 Billion

by James R. Stoup Jan 20, 2006

What do Adobe, TiVo, Sun, Novell, Universal, Palm, Pixar and Real all have in common? Think hard, what could be the connecting thread? Give up? Well, in searching the internet it seems that a good number of people seem to think that Apple should buy one or more of these companies. Think it’s crazy? Well, Apple has $7 billion dollars in cash and $67 billion in market cap, so if Steve wanted to go on a shopping spree here is what it would cost him:

Universal Music - Market Cap $36 billion
Buying this one would seriously deplete Apple’s reserves leaving it vulnerable to market downturns
Why - Gives them a huge foothold in the more conventional entertainment market
Pro - Would allow Apple to really begin forcing the music industry into the digital age (and make a lot of money doing it)
Con - Very costly, might not be worth it now that the ITMS is doing so well

Adobe - Market Cap $20 billion
Between their on-hand cash and available stock buying Adobe (which now includes Macromedia) would be quite possible.
Why - Give Apple more of a force on your average consumer’s desktop
Pro - Overnight becomes the dominant player in Media creation software
Con - Certain apps would have to be killed since they would become redundant (Premiere anyone?)

Sun - Market Cap $16 billion
Not quite as expensive as Adobe but still a nice chunk of change
Why - Sun almost bought Apple once and the two companies almost merged twice. The industry has moved the two farther away now than they once were but the possibility of another meeting is still tantalizing.
Pro - If Apple wants to make a push into the business world, buying Sun might be a good start
Con - Sun isn’t anywhere near the digital living room Jobs seems to be heading towards

Pixar - Market Cap $7 billion
Could be snapped up with only the cash on hand
Why - Jobs folds Pixar into Apple, makes himself even richer and forces the heads of Mac zealots everywhere to explode. Governing both under one roof officially would announce to the world that Apple is no longer a hardware company but instead a content company
Pro - Download the Incredibles on the ITMS, need I say more?
Con - Can you say “Government regulation”? Bet you can

Novell - Market Cap $3.5 billion
If they wanted it then they could easily make it happen
Why - Would signal a push towards the business sector
Pro - Could merge SuSE Linux with OS X to form the basis of OS XI or use this acquisition to better position themselves for enterprise class products
Con - If this isn’t the direction Apple is moving then buying Novell just means more dead weight to be discarded later

Palm - Market Cap $1.8 billion
At barely $2 billion buying Palm wouldn’t tap into their reserves very much at all
Why - The Palm PDA merges with the iPod which then morphs into a phone which then transforms into a semi named Optimus Prime
Pro - Apple releases the super-duper iPod capable of doing everything, everyone else surrenders
Con - PDAs have been on the downturn these past few years due to device convergence

Real - Market Cap $1.4 billion
At $1.4 billion and falling Apple could get this one for a song in a year or two, right before they file for Chapter 11
Why - To finally shut Rob Glasser up for good, make Real customers Quicktime customers and further boost Quicktime as a standard over Windows Media player
Pro - Glasser can finally buy an iPod without shame, and Apple forces Google’s new movie service to use Quicktime
Con - All in all this might be more trouble than its worth because in a few years (months?) Real might not matter anymore

TiVo - Market Cap $465 million
Drop in the bucket, Apple could easily make it happen if they felt the need
Why - To immediately release a DVR
Pro - Would allow Apple to get a foot in the door with the lucrative Cable market
Con - The Mac Mini could do everything this does in a year or so

There are some of my suggestions for what Apple could do with its current cash horde. Have other suggestions? Post them below.


  • Settle with the Beatles? wink

    Marc Jones had this to say on Jan 20, 2006 Posts: 14
  • What’s Panasonic going for?

    Or a good consumer electronics company with digital cameras, DVD players, set top boxes, Plasma….

    Greg Alexander had this to say on Jan 20, 2006 Posts: 228
  • -lol- yes !
    And then release the WalrusBook and ObladiBook.
    (Don’t dream of a PennyBook.)

    Lionel Chollet had this to say on Jan 20, 2006 Posts: 23
  • Universal Music- can anyone say the disaster that is Sony. Creates huge conflicts of interest and would end up co-opting parts of Apple into the RIAA. Apple should be trying to kill Universal by getting into distribution directly.

    Adobe- this would be a smart acquisition just for Photoshop and InDesign (Pages Pro).

    Sun- a long dying company that has nothing to offer anymore.

    Pixar- a better acquisition than Universal if they want to show how to distribute in the new digital age, less baggage.

    Novell- this might be really interesting. Apple’s software really lacks in business integration and Novell still has name cachet. Not sure about their technology any more though.

    Palm, Real, and Tivo- pure junk plays and I love Tivo.

    I would argue that Apple should make several plays: Adobe would be an excellent acquisition. However, a 2nd/3rd tier consumer electronics manufacturer like BenQ or even parts of LG would be a better move by providing their own manufacturing capabilities and provide expertise in consumer electronics. Plasma, projectors, stereo components… Actually Apple should buy Sonos for spare change and rename it the iPod Stereo.

    akatsuki had this to say on Jan 20, 2006 Posts: 6
  • You forgot the one move that would make the tech world explode:

    Google - 126.8B Market Cap

    I know, you said Who Should Apple Buy?, but just imagine if Apple and Google merged.

    I think I hear Steve Ballmer screaming right now…

    Dave Murdock had this to say on Jan 20, 2006 Posts: 2
  • Hi James - actually they have $8.26 billion. But what’s a billion between friends? Mike

    Mike Evangelist had this to say on Jan 20, 2006 Posts: 1
  • With the exception of Adobe (which I would like to see even if Adobe wouldn’t) I think Apple should hold onto the cash for downturns in the market - they do happen.  With a strong cash position Apple would be in a better position to continue strong R&D in the bad times, giving them an advantage over companies that aren’t able to do it.

    The other potential focus for acquisitions would be small companies that have a very good product (generally software) that could be easily folded into OS X or one of the other Apple apps.  Some of these apps are developed by individuals of very small companies and don’t cost much for Apple, but can make the sellers very happy.

    MacKen had this to say on Jan 20, 2006 Posts: 88
  • Ok buying Adobe would be really really stupid. Apple could develop a CS2 killer for a fraction of the cost of buying Adobe. `+ of Adobe’s software is PC related. Not a good purchase.

    Real- Nada…conflicts with Quicktime. Duplication. Real will be lucky to be around in 5 yrs

    Universal- Apple doesn’t need to be a content provider. Let other people worry about A&R and everything else.

    Palm- Dead format. They’d be better off making OS X Lite for portables.

    Tivo- The only good buy because they’re cheap and have a patent portfolio that Apple could use.

    hmurchison had this to say on Jan 20, 2006 Posts: 145
  • I think Apple needs to buy Sun to migrate OS X and Solaris in to a Rock solid OS (10.7 or 10.8), Sun also has a pretty solid Media OS or they should buy SGI’s old Irix Media OS. Then get Novell so everthing in the Apple Networking world is hardcore!!! Take out Adobe and kill off the PC version of everything. Take Palm out of put misery build a sidekick killer ipod, home universal remote, pda, ipod video, cell phone tri-corder thing! Their Content thing and Media will all be taken care of with Mister Jobs in Burbank reshaping Disney back into the media darling it use to be. Apple doesn’t need to create content, it will use Disney/Pixar to do all that for them.  In a few years come back and clip off Universal Music which is still owned by a French company, so they will be dying to have someone to buy it in a few years anyway. Partner up with Sony to refine there completely misguided product line, then buy Sony Imageworks so you have soem content to keep the 16-35 people interested. Apple could make there own Tivo Killer and have, there was a limited product similar to tivo released in like 1991 or 92 much like Newton PDA Apple was way ahead of what people could wrap there heads aroud.

    pixel_pimp had this to say on Jan 20, 2006 Posts: 1
  • Definitely Adobe.  As a longtime video geek I have always dreamed of a fusion of Photoshop, AfterEffects, and a real video editing app, meaning Avid or FCP.  Premiere is not a serious player and should have been killed off years ago.  Apple has spent money on Shake and Motion, but AfterEffects is still the standard for most people.  A merger of the two companies would allow them to streamline development in the video and motion graphics sector.  With Apple now trying to push further in to Avid’s domain with Final Cut Extreme, an Adobe acquisition makes a lot of sense.

    Add to that the the whole Macromedia catalogue, and you would have Apple as a leader in video, graphics, and web design.

    There would probably be major regulatory issues though.

    axis27 had this to say on Jan 20, 2006 Posts: 3
  • test

    Hadley Stern had this to say on Jan 21, 2006 Posts: 114
  • adobe. hands down.

    after effects is the de-facto standard in 2D animation. photoshop is the standard in raster design. illustrator is the standard for vector art. imagine having full access to the patents on PDF…not to mention the apple type library.

    overnight, apple becomes the dominant player in design, print, video and web. they leverage adobe products to build new apps for consumers. it would ensure their health in a way no other purchase could match. what tools do you think build microsoft’s website?

    david randall had this to say on Jan 21, 2006 Posts: 10
  • I think if Apple were wanting to buy Adobe they would have done it when they were half the price 4 months ago. Or even a quarter of the price just a year ago.

    Maybe Apple should buy Dell now they surpassed them smile

    Luke Mildenhall-Ward had this to say on Jan 21, 2006 Posts: 299
  • adobe. i understand that adobe is a MAJOR player in the pc market and that, initially, the company would probably take a hit without all of those pc users buying up their software. but, i have to think, in the long run, this would only increase mac hardware sales and, since that seems to be what apple is after, why wouldnt you do it? imagine all the apple pro apps (including logic, now), macromedia apps, and adobe apps ONLY available to mac users. suddenly, the pc arguement for doing visual creative work becomes obsolete. thoughts?

    lifeis11 had this to say on Jan 21, 2006 Posts: 1
  • Really. The only thing that makes sense is:

    Tivo - Though loosing money in buckets they know the cable distribution structure

    Burst - Apple should have bought them instead of suing them. The future lies in technology that Burst is sitting on.

    The rest should be held for future R&D and market downturns.

    Apple had this to say on Jan 21, 2006 Posts: 1
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