Jobs Says Apple Will Be 'Bold' with $40 Billion War Chest
Apple is sitting on $40 billion in cash, which it will use not for revenues but to make "big, bold moves," CEO Steve Jobs announced at the company's annual shareholder meeting. He said the company will be aggressive in coming years and its big barrel of cash will provide an important buffer.
"When you take risks, it's like jumping in the air. When they don't work out, it's nice to know the ground is always there," Jobs said.
Jobs didn't offer much direction on how the company will spend the money, except to announce that Apple will open 25 retail stores in China over the next two years.
So what else does Apple have in mind for that money, given that Jobs aims to shoot "big?" Greg Sterling, principal analyst with Sterling Market Research, expects more acquisitions, he said in a telephone interview. Apple's recent acquisition of Quattro Wireless was a "surprise," Sterling said. "Perhaps they'll go further afield from their core business with other acquisitions," he added.
Does Quattro Signal a New Direction?
The acquisition of Quattro, a mobile advertising company, for approximately $300 million was clearly out of Apple's usual direction and served as a warning that Apple won't cede search and advertising on the iPhone to Google forever.
The purchase led many observers to define the current tech landscape as Apple vs Google. "You can just see the tempers rising between the two companies," Gene Munster, senior research analyst at Piper Jaffray, told The New York Times in January. "Two years ago it was a very friendly relationship. Now just every day it gets more competitive."
Both companies are clearly converging on mobility with Apple's iPhone and Google's Android operating system. Apple COO Tim Cook has been emphasizing that Apple should be considered a "mobile-device company," even as it continues to support the workhorse Macintosh line.
'Mobile Device Company'
Speaking at the Goldman Sachs Technology & Internet Conference 2010, Cook addressed Apple's acquisition strategy, saying the company will continue to focus on small acquisitions. Apple acquires companies for technology and talent, not market size, Cook said.
The company's focus is on obtaining talented people through targeted acquisitions, Cook added. Apple is about making the best products, not about having the largest market share, he said.
In the past there were rumors that Apple would buy Twitter, which would offer some social-networking and content angles. On the other hand, Apple could deploy Quattro to support the development community, rather than leaving it as a general advertising network. Or Apple may be looking to diversify revenue streams with a serious play in mobile advertising.
Other possibilities are social networking, mapping and location-based services. Apple reportedly has an internal team working on mapping, Sterling said, but an acquisition could make sense there as well.
As always with Apple, the world will only find out when Steve Jobs makes his move.
Image credit: Screenshot from 2010 video by Apple.
Posted: 2010-02-26 @ 11:41am PT
Never, ever bet against Steve Jobs!!!