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Tim Cook says Apple buys innovation, not competitors

malaysia news lab
    • Apple CEO Tim Cook shed some light into the company’s acquisition strategy in an interview with CNBC on Thursday.
    • Cook said that Apple buys companies because they have technology that Apple needs, and they turn that technology into iPhone features, drawing a contrast with other tech giants which
    • Cook said last year that Apple buys a company every few weeks.

malaysia news lab

Apple buys a lot of smaller companies, and doesn’t talk about what it plans to do with them.

However, on Thursday, Apple CEO Tim Cook shed some light into the company’s acquisition strategy in an interview with CNBC, while drawing a contrast with other big technology companies who testified before the House Antitrust Subcommittee on Wednesday.

“If you look at the things behind the investigation, the things are acquisitions, and if you noticed, we didn’t get any questions on acquisitions because our approach on acquisitions has been to buy companies where we have challenges, and IP, and then make them a feature of the phone,” Cook said in the interview.

Cook is making the argument that Apple doesn’t buy competitors — it buys companies which have products or other technology that Apple can turn into features.

Although Cook stopped short of naming its Big Tech rivals, emails released by the subcommittee on Thursday show that Facebook executives discussed the Instagram acquisition internally in the context of taking out a competitor. Emails also showed that Amazon employees undercut on price to win market share from it. Amazon bought Quidsi, its parent company, in 2010.

Cook bolstered his point: “An example of that was Touch ID. We bought a company that accelerated a Touch ID at a point.”

There are other examples, too: In 2017, Apple bought Workflow, an automation app, which is now the Shortcuts app built into iPhones. In 2018, it bought Texture, a digital magazine subscription service, which is now the basis of Apple News+. The Animoji avatars users can drop into texts came out of the 2015 acquisition of FaceShift. Siri was the product of an acquisition. Apple’s industry-leading mobile chips are a direct result of the 2008 purchase of P.A. Semi.

Other deals were for companies that are closer to being competitors to Apple. In 2017, Apple bought Beddit, a hardware sleep tracker from Finland. Apple still sells Beddits, and even updated the hardware, but they had a lot of features removed in 2019, and Apple will add sleep tracking as a feature in its latest Apple Watch software this fall.

Apple buys a lot of smaller companies and doesn’t always announce the acquisitions. So far, in 2020, five purchases from Apple have been publicly revealed, none of which has an official price attached to the transaction. Most of Apple’s acquisitions are small enough that the company doesn’t need to report them to the S.E.C.

Cook said last year that Apple buys a company every few weeks. Apple’s largest historical deal was for Beats in 2014 for $3 billion. Apple still sells Beats headphones, and transformed its streaming music service into Apple Music.–CNBC

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