Apple’s trading decelerates while its contemporaries go faster

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The past two years have seen a sharp slowdown in Apple Inc.’s trading, which previously averaged one every three to four weeks. This is an indication that the computer titan is becoming more selective in light of the unstable economy and more government scrutiny.

The major purchases that have drawn the attention of its Silicon Valley competitors are notoriously avoided by Apple. However, the business has spent a significant portion of its history purchasing promising startups, some of which served as the inspiration for well-known technologies like Siri and Face ID. CEO Tim Cook stated in only last February that Apple had bought 100 companies in the previous six years, or more than one on average every month.

Deal flow has decreased to a trickle. Only two known purchases by Apple occurred in 2022: Credit Kudos and AI Music, both UK-based firms. It is likely that Apple’s efforts to create its own infrastructure for financial products will be aided by the technology that the first of those two businesses created for computing credit ratings. In order to create custom music, the latter company used artificial intelligence.

The sole acquisition Apple is known to have made in 2021 was the streaming service for classical music Primephonic.

These figures contrast sharply with the recent large bets made by other internet firms, but they do not account for expenditure on content on Apple TV+, including acquired shows and distribution agreements for Major League Baseball and Major League Soccer.

Activision Blizzard Inc. will be purchased by Microsoft Corp. in January for around $69 billion. Google is purchasing Madinat Inc. for $5.4 billion from Alphabet Inc. And Amazon.com Inc. this week decided to pay $1.65 billion to buy iRobot Corp., the company that makes the Roomba vacuum.

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Apple, of course, has plenty of cash to spend if it wants to participate. It had $179 billion in cash and marketable securities at the end of the previous quarter, so if it decided to make a deal, it could move rapidly. Cook attended the Sun Valley Conference in Idaho last month, which is a well-liked location for arranging megamergers. However, for the time being, the corporation has decided to allocate funds to dividends and stock buybacks.

Regarding its acquisition strategy, Apple opted out of comment.

Tech mergers are under greater regulatory scrutiny than ever before even as they grow in number. Apple, like some other businesses, last year added wording to its annual report highlighting the increased risks associated with acquisitions. This includes, according to the business, “failure to secure needed regulatory clearances on a timely manner or at all, or the imposition of onerous restrictions.” Since then, government scrutiny has increased as a result of Apple facing criticism for its App Store policies and refusal to let independent firms use the iPhone’s tap-to-pay feature.

The scrutiny extends to other tech behemoths. The Federal Trade Commission filed a lawsuit against Meta Platforms Inc. in July to prevent the company from acquiring Within, the creator of a fitness software for virtual reality headsets. After the FTC filed a lawsuit to stop it in February, Nvidia Corp. withdrew from what would have been the largest chip deal in history.

The Federal Trade Commission (FTC) claimed in a report from 2021 that five of the largest tech firms—Alphabet, Apple, Amazon, Microsoft, and Meta—acquired hundreds of smaller companies over the previous ten years, frequently using legal technicalities to avoid informing antitrust regulators about the deals.

Apple is also aiming to cut costs in the upcoming year, which might make M&A even more difficult. According to a report, the Cupertino, California-based corporation is reducing recruiting and spending in several departments. Cook recently stated that Apple’s expenditure in the near future will be more “deliberate.”

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The operating systems at the core of all of Apple’s products, the semiconductor division, and the multitouch technology that powers the iPhone and iPad were all acquired. The foundation for the company’s weather, music, and news services was laid by more recent agreements.

The $3 billion acquisition of Beats Music and Beats Electronics by Apple in 2014 remains the company’s largest acquisition to date. Analysts and investors have long fantasized about more ambitious transactions like Apple acquiring Tesla, Netflix, or Electronic Arts.

Investors saw the company’s decision to rearrange the management ranks in 2019 such that Apple M&A chief Adrian Perica reports directly to Cook as an indication that high-value deals will soon be announced. The company promised to pay $1 billion for Intel Corp.’s wireless chip business that year and spent over $600 million on smaller deals, but no significant acquisition materialized.

Cook was questioned about acquisition expenditure on Apple’s most recent two earnings calls with analysts. He claims that although the business is looking, it won’t just make a deal to increase revenue. According to him, Apple seeks talent or technology that supports its agenda.

Cook stated on the call in April that if the appropriate chance presented itself, he wouldn’t rule out making a bigger transaction. We’re constantly looking, but I don’t want to talk to you about my list.

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