Apple is in a slump. No, not a financial slump. Sales, revenue, and profits appear to be doing just fine (Apple would be obliged to say something if the most recent quarterly earnings were out of whack; they won’t be), but it’s the future of Apple that has everyone in a tizzy. Apple is in an expectations slump.
Bashing Apple can be a profitable venture. Not as profitable as actually designing, building, selling, and supporting products owned by half a billion people on planet earth, but negativity grabs eyeballs, and eyeballs are what those who write about Apple are mostly about. Either bashing Apple. Or, defending Apple from the bashers.
Apple sits on a pile of cash so large that the company could buy a few western European countries and still be able to lose billions building an electric self-driving vehicle that nobody buys (like that could happen). We’ve read the headlines. We know the story.
Apple bought Beats Music for $3-billion so we knows there is precedent for throwing money out the window. The latest says Apple will buy Dish Network. That would get Apple into the television industry in a hurry but will it bring television into the 21st century?* More on that in a moment.
Apple could also buy Tesla and get into the self-driving electric car business in a hurry. Tesla might be a better fit than Dish Network, but why not both? There would still be enough money left over to buy France. The country is for sale, right? I’m sure I read that somewhere. I mean, the U.S. is for sale. All you need is enough people with enough money and a person could literally buy themselves into public office. And there is precedent there, too.
Companies that have success making and selling a product recognize the problem with the eggs and basket analogy. Microsoft had all their eggs in two baskets– Windows and Office. Yet, blatant and desperate attempts to diversify hasn’t exactly worked out so well through the years. Google’s eggs are advertising, and efforts to diversify beyond that also haven’t worked out well, so the company diversified the company (as opposed to the product line where only advertising makes money) into Alphabet, of which Google plays a part, and now GOOGL is worth about the same as AAPL.
Regardless, Apple’s future is set. The company will continue to make money hand over fist for the foreseeable future, the iPhone will remain the company’s bread and butter product, but everything else Apple touches seems to turn into money, and that’s not likely to change either.
Unless… Apple ventures into territory where making money is difficult for those already in the industry. Automobiles would be a good example. 2015 was a record year, but Apple made more money in a quarter than the entire industry did all year. Of course, the iPhone made more money in a quarter than the entire smartphone industry did all year, so at least there is a precedent.
Apple is a company run by control freaks with long memories. Look how much money the company sends to TSMC in Taiwan just so Samsung doesn’t get fed more by Apple. Does Apple want to buy a presence in the automobile industry, or go it alone and build it’s way to success? Does Apple want to buy a presence in the television industry, or got it alone and build it’s way to success?
Apple does buy other companies; many, in fact, but they all get integrated into the company hive and become complements or enhancements to existing products, so my money says Apple will build, not buy.
But it could go either way.