In order to expand its technical expertise, Apple Inc. (AAPL) continues to take the acquisition route. Reportedly, the company has purchased SnappyLabs, the maker of a popular photography application, SnappyCam for an undisclosed amount.
SnappyCam specializes in adding functions to smartphone cameras. Worth $1, the application helps smartphone users to simplify and accelerate the process of taking pictures through the built-in camera. The app enables the smartphone camera to keep on taking photos continuously as long as the on screen shutter-button is pressed.
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The acquisition will give Apple the opportunity to enhance the camera feature of its smartphone. The company is facing significant competition in most of the markets from handset makers who are using Google’s (GOOG) Android operating system. Most of these devices carry cameras, which have features much better than Apple’s iPhone.
In such a scenario, the enhanced camera feature will not only boost user experience but will also justify the premium pricing of the product.
Apple makes small but strategic acquisitions that provide it with specific technology or products. Over the last 12 months, the company has acquired a number of companies from diversified fields that include social media data generator, data compressor technology provider, map software developer, personal assistant app provider, low energy chip maker and 3-D sensor developer.
In December the company acquired Topsy Labs, which tracks Twitter’s (TWTR) tweets. We believe that Apple’s strong balance sheet will allow it to pursue strategic acquisitions to bolster its product portfolio. Moreover, its recent deal with China Mobile (CHL) is expected to boost top-line going forward.
However, falling gross margins and lack of innovation are expected to remain the primary headwinds in the near term.
Currently, Apple has a Zacks Rank #2 (Buy).