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Fri, Jan 09, 2009 - 08:37 AM EST  —  AAPL: 92.70 (+1.69, +1.86%)  |  NASDAQ: 1617.01 (+17.95, +1.12%)

Time for Apple to use some of their $18 billion war chest?
Friday, January 25, 2008 - 08:35 AM EST

"Buyouts have always been the primary exit strategy for high-tech startups - even before the IPO market dried up - and the tech giants that can make them happen seem to have both the wherewithal and the appetite. Microsoft's Steve Ballmer has already said he plans to buy 20 companies a year for the next half-decade. Google, which never saw a cool new idea it didn't love, has snapped up almost three dozen companies in the past three years and has billions left to spend. Even Apple's Steve Jobs, a notorious tightwad, is under pressure to do something with the $15 billion war chest he's accumulated," Fortt reports.

MacDailyNews Note: Apple has $9.162 billion in cash and cash equivalents and $9,286 in short-term investments. There are more assets, of course, but those alone add up to over $18.5 billion. Apple had $15.4 billion in the same columns on September 29, 2007. In 90 days, they added $3.1 billion in cash, cash equivalents, and short-term investments. But, "everyone sell," Apple has no future. wink

"With that in mind, we picked the brains of our favorite analysts, touched base with a few Valley wise men, threw in a dash of guesswork, and came up with a shopping list for the three tech power players with the most cash sitting in the bank," Fortt reports.

"Steve Jobs is almost aggressively unacquisitive. While Apple occasionally buys some innovative software or hardware from a startup, there's no record of his buying any companies outright since 2002. But here's a bet that could polish his company's image: Green Plug, an outfit that promises to save energy while solving the perennial problem of the power adapter. Green Plug's computer-on-a-chip technology adjusts to whatever device it's connected to, allowing a single power cord to charge, say, a MacBook, an iPod, and an iPhone. If Apple were to adopt this new plug system - as it did earlier with FireWire and USB - and it caught on as an industry standard, we wouldn't have to throw out our old transformers whenever we buy a new electronic toy," Fortt reports.

"Apple might also take a look at Move Networks, a company whose technology has become Hollywood's favorite way to stream and manage high-definition content. Apple is moving aggressively to expand its digital video offerings on the iTunes Store, and although it already controls several leading video standards through its family of QuickTime products, Move's system would allow it to take several important steps forward. Not only does Move deliver high-quality video faster, but it also offers content publishers a way to keep track of how many viewers are watching and for how long - something that will be necessary if anybody is going to make money putting digital video online," Fortt reports.

More in the full article here.

[Thanks to MacDailyNews Reader "Fred Mertz" for the heads up.]

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Jan 25, 08 - 08:48 am Comment from: LiM

Here we go again...adobe?

Jan 25, 08 - 08:50 am Comment from: macnut222

Is it me, or do we get this same article headline every time Apple announces earnings? Personally, I don't think it's me.


Hey guys, every heard of saving for a rainy day?

Jan 25, 08 - 08:52 am Comment from: Phred

I sure that Apple is eagerly anticipating the comments at MDN. I have a funny feeling that Apple has thought about how to spend their money long before this post.

Jan 25, 08 - 08:54 am Comment from: silverhawk

It's a rainy day, hold on to your money.

Jan 25, 08 - 08:59 am Comment from: MacSheikh

@ macnut222

We see these headlines even when Apple's NOT announcing earnings!

Jan 25, 08 - 09:00 am Comment from: Macaday

Apple 'under pressure to spend'? Rubbish.

After all Apple did buy CoverFlow last year or the year before..!

But there aren't many things out that Apple isn't able to do for itself.

So why bother?

Jan 25, 08 - 09:13 am Comment from: Rob

I was just thinking, M$ is doing good because PC makers don't have any viable alternative, except maybe some version of Linux.
I know we have been through this before, but what if
Apple decided to sell OS X to PC makers this year?
I bet most of them including Dell and Sony would make a switch.
Outlook for M$ wouldn't be so good, I don't think they could survive something like this.
Apple has a lot of cash right now and could risk it, they have other cash cows besides Mac line, this is not like the 90's situation so it could work.
Maybe Apple could buy Sony and sell them Apples...Sonys with OS X pre-installed

Jan 25, 08 - 09:21 am Comment from: Ampar

I wouldn't mind a thank you gift to help pay off my mortgage. I'll even take stock options.

Jan 25, 08 - 09:26 am Comment from: Hano

One word: Adobe...

-- Hano

Jan 25, 08 - 09:35 am Comment from: lastWord

FCC 700 MHz Spectrum Auction

Jan 25, 08 - 09:36 am Comment from: Rob

Adobe sounds good but,
if Apple bought PC makers, they could stuff them with OS X and get the fee, not mentioning market share.

Jan 25, 08 - 09:41 am Comment from: bioness

They're not going to take on adobe, it's not going to happen. Adobe is too expensive to buy.

As soon as a startup company makes a software that is competing against photoshop or the other smaller components that make up Adobe's business, Apple would be snapping those up cheaply and building that into their business.

If there are a lot of supporter for naked light, chances are apple may be buying that.

Apple buying Adobe has the same probability as Apple releasing a mid-range head-less mac.

Jan 25, 08 - 09:43 am Comment from: Tommy Boy

How about a dividend?

Jan 25, 08 - 09:47 am Comment from: LiM

They could write better software for a small fraction of what it would cost to buy Adobe. Now that would be a better use of cash. (Of course, the first 2 generations would suck (too simple).)


MW: making [it now, I hopes]

Jan 25, 08 - 09:49 am Comment from: AWidgetIHaveNot

Adobe is not something Apple is likely to purchase, it doesn't fit with SJ's philosophy. Adobe is an elephant, and elephants don't gallop. Adobe pretty much has a stale market. Apple buys and devs niche tech that can be exploited to the mass market via a good front end, itunes, ipod, iphone etc. If Apple were to buy a company to compete with Adode in some markets, where's the growth going to come from? Apple is already strong in video production etc and photoshop's a dead end. It's one of the most complex pieces of software available. Do you think Apple wants that millstone? Look for Apple to buy into growing markets not stagnating ones. Think wireless (Macbook Air), new battery or plug tech, SSD, wireless charging etc

Jan 25, 08 - 09:58 am Comment from: mark

I thought Apple bought some company that had expertise with handling/translating MS formats after 2002. Apple didn't announce it but the small company did.

Jan 25, 08 - 10:09 am Comment from: Dyrbr Kpnd

First, since I buy Macs, my computer still works great by the time I want a newer one.

In the instance that I may have worn out the power adapter, I'd still need a new one for both my old and new Mac.

His whole premise that I would want to use one transformer in perpetuity is a contrived spin probably because he I'd an investor in that company (or he's bored with a deadline).

Stupid idea, as usual. Where do these richardheads come from?

Jan 25, 08 - 10:10 am Comment from: Tom V

You know it's interesting. All the talk about Apple potentially acquiring Adobe (which isn't likely in my opinion)... People talk about how it would be a major blow to Microsoft....

Think about this... Microsoft has way more to spend than Apple. They can actually afford the acquisition of Adobe. They are in the acquisition mindset. What if they bought Adobe??

That could be a lethal blow to Apple (if they chose to no longer offer the CS to Mac users)

This is all hypothetical of course.

Thoughts?

Jan 25, 08 - 10:11 am Comment from: Spark

Somehow I don't think SJ needs reminding of Apple's cash on hand.

Jan 25, 08 - 10:36 am Comment from: Jubei

Here is what they should do. Develop away to extend 802.11 long range WiFi system. Announce rollout of Nationwide WiFi access anywhere in the continental US. Free for .Mac users and on 5 bucks more for iPod Touch and Mac laptop users. Incompatible to Windows users. wink

Jan 25, 08 - 10:39 am Comment from: Cubert

Send the OS to 11, Apple!

Jan 25, 08 - 10:51 am Comment from: Mr. Peabody

Two words: Adobe and Palm

Jan 25, 08 - 11:01 am Comment from: Homework

Apple has bought companies out since 2002. Transitive, a Canadian SW firm with patents relating to translation/conversion of file format data, was bought out by Apple since that time.
To the authors: please check your facts.

Jan 25, 08 - 11:11 am Comment from: appleJack

You guys need to know that Oppenheimer performed magic with money during his years at Delta Airlines. He was credited with much of the success of the company. I'm sure it was a blow to them when he left, but he should receive credit for having left one of the world's best companies for one with a better future. That "hold" money is making money, and makes Apple stronger and more stable.

Jan 25, 08 - 11:35 am Comment from: It's About Time

If the stock continues downward, there may be increasing pressure from major shareholders (outside of Apple) for a dividend. To date, Apple has not paid dividends to shareholders.

Apple doesn't need to add more companies, such as Adobe. Mergers aren't necessarily a good thing as it can dilute one company's focus with another's. Sort of like the currently changing Apple population. More PC owners switching is a two edge sword. On one hand it gives Apple more revenue. On the other it brings a PC mentality to the Mac platform - now that's good news for virus hackers. wink

Jan 25, 08 - 11:41 am Comment from: Mirza

You guys are dreaming. Microsoft is a software company, and Apple is a hardware/hype company. Apple is not really selling computers. They are selling you an image. Their commercials do not feature technical specs, but people talking, or dancing or some crap like that. Most people who use computers as a mean to achieve an end use Microsoft products. Have you ever seen an office full of cubicle drones using a Mac? I don’t think so. I doubt that Microsoft is in any kind of danger from Apple.

Also, Apple is not about to give up its tight control of users any time soon. Ipod works only with iTunes so that they can sell you more icrap. OsX works with Macs only so that they can sell you more icrap. Apple wants you to use Apple software on apple hardware so that you would be enticed to buy more from Apple store. Wake up people!

Jan 25, 08 - 12:03 pm Comment from: overlook00

Mirza send me a virus, they tickle.

Jan 25, 08 - 12:07 pm Comment from: O

"Have you ever seen an office full of cubicle drones using a Mac?"

exactly.

Jan 25, 08 - 12:56 pm Comment from: twilightmoon

I do not see Apple buying Adobe. Not now, not tomorrow, not ever, really.

However, Adobe does own a number of patents that I believe Apple could benefit from, and there's the perpetual threat that MS could try to buy Adobe. For those 2 reasons I *could* see Apple buying a percent of Adobe in exchange for the free use of some of their patents, as well as insurance against Microsoft buying Adobe.

Jan 25, 08 - 12:58 pm Comment from: Shogun

Things I pray Apple is working on:
- A manned Mars mission
- Bionic Eyes
- Bionic Eyes with Laser Beam
- Bionic Eyes with Laser Beam and iPod
- Rebuilding Atlantis
- A Winter Sport Alternative to Hockey
- Floating Cars
- Ive's Design for Lawnmowers
- The Terminator
- The Terminator with Laser and iPod
- Color Changing Wall Paint
- Alternative to Moustache, Goatee, Jazz Patch
- Exoskeleton Robots
- Alternative to Seven Day Workweek
- Way to Stop the Voices
- Alternative to DNA
- X-Ray Glasses
- iPod Engagement Ring
- Venus Mother-in-Law Trap
- Magnetic Fabric
- Update to Chalcedonian Formula
- Home Morphology Set
- Home Sneaker System (7.1)

Jan 25, 08 - 01:17 pm Comment from: Thomas from Deutschland

Apple could buy some AAPL for a couple of billions.

Jan 25, 08 - 01:33 pm Comment from: HueyLong

Mirza:

Whilst I kinda agree with your first paragraph [however, the second was utter drivel, spoken like a true numbnuts].

It seems to me you've never been in a publishing house, or a design studio or an advertising agency, or a prepress shop, or a video production house, or a music production studio. Shockingly, these are "businesses" too, and you know what, they have hundreds and thousands of Macs. [The 46-storey Hearst Building in NYC is a tower full from top to bottom of Xserved networked Macs - one of many in this city alone].

Of course I'm not counting all the scientific communities [amazingly, also "businesses"] and educational establishments that all run Macs too.

Are Microsoft in any danger? Not in my view, but please, I'd love naysayers to stop and think for once. All the above industries are also businesses in the commercial world too. Just because Apple doesn't have a huge presence in the financial world - yet - means nothing to me.

Back in the 90's, PCs were having a growing presence in the Graphics industries... err, not so much now.

I'm just saying....

Jan 25, 08 - 01:42 pm Comment from: Ampar

Shogun: You just effectively nixed any chance of getting a peek at the Apple skunkworks. Loose lips . . .

Jan 25, 08 - 01:51 pm Comment from: Ampar

"Most people who use computers as a mean to achieve an end use Microsoft products."

" . . . who use computers as a mean to achieve an end . . . ? WTF?

This link doesn't exist. Please ignore it. Thank you.

http://www.apple.com/business/profiles/

Jan 25, 08 - 01:58 pm Comment from: Tom V

@ Shogun

OMG I need to change my pants hahahahahah!

Jan 25, 08 - 05:04 pm Comment from: trex67

MOTU.

Anybody that makes high quality (MAS or) AU plug-ins, and add them to the Logic bundle. It wouldn't cost much (relatively speaking) and would add tremendous value to Logic's already formidable features. Some of these plug-ins are prohibitively expensive for DIYers like me, and their inclusion in Logic would be game changing.

Everyone says Adobe, and I agree (though it probably would be a hostile takeover, and Microsoft might fight it, or even start a bidding war.)

Jan 25, 08 - 08:05 pm Comment from: bob

How about buy DELL, close the shop and give the money back to its investors?

Jan 26, 08 - 01:11 am Comment from: switcher

"Steve Jobs, a notorious tightwad..."

Sometimes you just gotta laugh.. grin

Jan 26, 08 - 07:59 am Comment from: yet another steve via iPodDailyNews

Don't really see how Adobe would serve Apple better by being bought. They're both big and old companies and the culture clash could really mess things up.

If I were Apple, looking at the way Wall St is dumping the stock I'd just buy back stock. All that hard work to make a few extra pennies (or dollars) per share gets easier with fewer shares. And it's a little discipline for Wall St reminding them that this is not a 90s dotcom. Real earnings and serious quantities of cash mean that Apple can reverse the piling on to the downside and kill the shorts with a simple press release... "The board today authorized the repurchase of..."

Stock buybacks are one of those mechanisms that make a stock price much more than a speculative bet. I didn't see the logic when the stock was expensive, but now...

Jan 28, 08 - 08:10 am Comment from: Leveldown

@trex 67

MOTU is not gonna happen. The guys at MOTU make a competitor to Logic (Digital Performer) and is their baby. All the other products MOTU make they do so they can continue with Performer. They do it for the love of it, I can't see them selling any time soon. Native Instruments on the other hand........

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