Here’s a Shopping List for Apple After the Beats Buy
Looking beyond One Infinite Loop for key executives or new concepts is nothing new for Apple.
Spending $3.2 billion, as it is contemplating doing to snap up Beats, is. The price tag would make it Apple’s biggest transaction to date — it’s even larger than the 1997 NeXT deal that brought Steve Jobs back to the company. Does this signal a strategic shift for Apple? A bid to bring an injection of cool and fresh ideas to Apple’s sagging music business (which Dr. Dre and Jimmy Iovine have in abundance)? Or is just another opportunistic play by a cash-flush company?
Investor Marc Andreessen wondered why Apple isn’t making more deals like this one. As Andreessen noted via Twitter, it only amounted to three weeks’ worth of free cash for Apple.
“Question is not why are they being aggressive in buying Beats; question is why are they so conservative on not buying everything else?” Andreessen wrote.
We’re wondering the same and drew up a shopping list in case Apple CEO Tim Cook needs inspiration.
Under the heading of small cocktail-napkin-sized deals Apple might want to consider is Ringly. It’s a barely launched startup concentrating on jewelry and wearables for women. We know, we know. Apple doesn’t comment on rumors or speculation. But actions speak louder than words, and the company has been hiring talented people with expertise in both fashion (Burberry’s former CEO Angela Ahrendts and Yves Saint Laurent’s former CEO Paul Deneve) and physical health (fitness expert Jay Blahnik, who advised Nike on the Fuel Band).
Perhaps Apple might be on the lookout for a promising company like Quanttus, which could give it a jump-start in the quantified-self movement. The company, started by MIT alums, is working on a device that would use a cluster of tiny sensors to keep track of sleep patterns, blood pressure and activity levels. It just raised $22 million to help fund its work on wearable devices that monitor the health of people with cardiac disease or hypertension.
What about a distressed asset? Apple doesn’t typically frequent the swap meet, but perhaps it could convince Sony to part with its money-losing television group, which the Japanese electronics giant has decided to operate as a stand-alone business unit. This would provide manufacturing capacity to accelerate Apple’s long-rumored move into the world of connected television, though the tech giant’s efforts these days seem directed at the TV set-top market.
Seeking to provide a boost to e-reading? Flipboard could fit the bill, providing a magazine-like display to a person’s individual news feeds, blogs and social media feeds. Another curation/algorithm play, this one gives Apple a chance to put a new shine on its tablets, to boot: These guys are doing interesting work in trying to figure out what you’d like to read, based on your interests and your friends. A financing deal valued it last year at $800 million, so this could get it done for perhaps $3 billion or so.
Looking to enter the subscription video market? It doesn’t take a savant to see that purchases of movies and TV shows through the iTunes store might well follow the same (downward) trajectory as music. So why not make another big, bold deal — and buy Netflix? This one would amount to a giant transaction, since Netflix already has a $20 billion market cap. But if you’re going to get into streaming music subscriptions, shouldn’t you be in streaming video, too? (This is Spotify’s eventual roadmap, too, by the way). Plus, Netflix has world-class streaming tech.
Services are a long-standing weak spot for Apple. What was initially iTools then .Mac then MobileMe and finally iCloud is still weaker than many of the services it competes with — even with all the name changes. Apple at one time made a bid for Dropbox, but was famously rebuffed. It could look to others in the space, such as Box, or even pursue a bigger services play. Heck, we know something needs to happen with Yahoo at some point, though acquiring that much legacy and distraction would seem very un-Apple.
Perhaps Apple is interested in moving into physical purchases — which would make Square an interesting candidate. The company, a brainchild of charismatic founder Jack Dorsey, seemed to be gathering great momentum in the retail space, but Dorsey decided the company wasn’t ready for an initial public stock offering. In fact, both Apple and Google have previously expressed interest in acquiring it — though it wouldn’t come cheap. Its valuation exceeds $5 billion.
Ina Fried also contributed to this article.