Over the last five quarters Apple Inc. (NASDAQ:AAPL) has, per regulatory filings, reported total acquisition investments of $11.12 billion in addition to $1.20 billion in cash “business acquisition” payments. That means Apple is silently spending a ton of money to acquire technology, talent, and production capacity beyond its revealed acquisitions.
Three of Apple Inc. (NASDAQ:AAPL)’s acquisitions: Cue, PrimeSense, and Topsy cost the company $595 million in its most recent Q1. So where is all this money going? AAPL has three buckets where it files its acquisitions: “Payments made in connection with business acquisitions,” “payments for acquisition of property, plant and equipment,” and “acquisition of intangible assets.”
Hedge fund managers go about finding investment ideas in a variety of different ways. Some target stocks with low multiples, while others look for growth names, and still others combine growth and value when looking for ideas. Some active fund managers use themes to look for ideas, and Owen Fitzpatrick of Aristotle Atlantic Partners is Read More
In a shareholders meeting last Friday, CEO Tim Cook alluded to “23 companies over 16 months.” WiFiSlam, Locationary, HopStop, Passif Semiconductor, Matcha, Embark and AlgoTrim are all known acquisitions in 2013 along with the three above. In 2014, Apple has acknowledge the purchase of first SnappyLabs and then Burstly. When you add these up you get 14 companies that Apple Inc. (NASDAQ:AAPL) has acquired. 14 is not 23, meaning Apple has made an additional nine acquisitions that it has not announced outside of a dollar figure in required filings.
AAPL is notoriously secretive, and with good reason – it drives sales. Apple’s secrecy also helps to delay the efforts by competitors to copy its products, or to remain credible when claiming that they too were working on the same technologies.
Apple outspends Google Inc
While Google Inc (NASDAQ:GOOG) is famous for splashing the cash to purchase other companies, it appears that Apple Inc. (NASDAQ:AAPL)’s pace exceeds even Google’s. If you ignore the “buckets”, in 2013 AAPL spent $9.45 billion to Google’s $8.81 billion according to both companies filings. While Tim Cook is constantly saying that Apple isn’t in an acquisitions race, the numbers suggest otherwise.
While Google Inc (NASDAQ:GOOG) and Apple Inc. (NASDAQ:AAPL) are continually compared, and were here, the companies are so very different. Google lives, for now, on ad revenue. AAPL lives by selling devices. In the time that Google owned Motorola before breaking it up and selling it off, the company lost over $2.3 billion trying to enter AAPL’s sphere. In 2010 Apple acquired Quattro Wireless for $275 million to develop iAd, whereas Google paid $750 million for AdMob. According to eMarketer,,Google’s AdMob led U.S. mobile ad sales with $3.98 billion in revenues compared to Apple’s iAd which just brought in a bit over $250 million.
Different companies, different paths…for now.