Apple Inc. (NASDAQ:AAPL) is sitting on a cash pile of about $160 billion. And Facebook Inc (NASDAQ:FB) went on to acquire WhatsApp for $19 billion, which might have served the iPhone maker very well. The social networking company has agreed to pay $3 billion in restricted stock, $4 billion in cash and $12 billion in stock. WhatsApp has more than 450 million users worldwide, and it’s adding more than 1 million new ones every day. That’s why Mark Zuckerberg is so optimistic that WhatsApp will soon have more than 1 billion users.
New Apple products unlikely to be revolutionary like iPhone
BTIG analyst Rich Greenfield told CNBC that, with the acquisition of WhatsApp, Facebook Inc (NASDAQ:FB) will get a big chunk of time users spend on mobile devices around the world. WhatsApp has a very high level of user engagement, so the combined strength of Facebook, Instagram and WhatsApp will make Zuckerberg the Goliath of social networking.
Coming back to Apple Inc. (NASDAQ:AAPL), Jon Najarian of optionMONSTER said that the tech giant has a stealth bomber, but it’s still using slingshots. The company should have been there, knocking on the door of WhatsApp with a lucrative offer. Google Inc (NASDAQ:GOOG) was reportedly also in the race to buy the messaging company. Yesterday, Barclays analyst Ben Reitzes downgraded the iPhone maker’s rating to Neutral from Overweight. The research firm said that the tech giant’s new products such as TV, smartwatch and payment service may provide some upside, but they won’t be revolutionary like iPhone and iPad. Reitzes forecasts Apple shares to remain range-bound at least through the next year.
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Apple has to get into social
Apple Inc. (NASDAQ:AAPL)’s iTunes marketplace has more than 600 million loyal users that pay the company for stuff. Jon Najarian thinks Apple could be Facebook Inc (NASDAQ:FB), or it could be Netflix, Inc. (NASDAQ:NFLX). But it’s not aggressive at all when it comes to growing the user base that pays them for apps, content and services. Apple’s “ancient” board is not aggressive, and it’s letting Tim Cook simply sit there and “twiddle” his thumbs. Of course, paying $19 billion might have been a bit too much. But then that’s the cost of being too late to the growth race.
Najarian said Apple Inc. (NASDAQ:AAPL) has to make a move in social to explore the growth opportunities. Otherwise, it risks becoming the next Microsoft Corporation (NASDAQ:MSFT).