Apple: GoPro, Adobe, Box On M&A Wish List For 2016

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As the end of the year approaches, Apple and other major tech companies are setting their eyes on the future. Where will growth beyond the iPhone come from? Mergers and acquisitions have long been a strategy to create growth in new segments while also grabbing up technology that could be useful in future products, and believe it or not, beleaguered action camera maker GoPro may become a target, believe analysts at FBR & Co.

2016 the year for M&As at Apple?

In a report dated Dec. 10, analyst Daniel Ives made a list of companies he would like to see Apple acquire. He would like to see Adobe, Box and GoPro become targets for Apple and mentions Tesla Motors as well, although he admits the automaker is a long shot in terms of being acquired by Apple.

It must be said that any one of these suggestions would present quite a lot for the company to gobble up (especially Adobe!). Apple typically doesn’t make large acquisitions, with most targets being valued in the millions. Box’s market capitalization is approximately $1.618 billion, while Adobe’s is a massive $44.31 billion and GoPro’s is $2.389 billion. Tesla’s market cap is $29.4 billion. By comparison, the company’s highest valued acquisition (that the market knows of) was Beats Electronics in 2014 at $3 billion. Granted, the company has enough cash to snap up any one or even all of these companies, but it certainly seems unlikely.

Apple targets enterprises

The company has made it no secret over the last year or two that it wants to grab a sizeable chunk of the enterprise tech market, and it has made some efforts through partnerships. However, Ives suggests more could be done, particularly in the area of cloud services, if Apple would buy either Box or Adobe Systems.

Enterprise makes up approximately 10% of Apple’s total revenue as the company specifically targets businesses with the iPad Pro in hopes of increasing business revenue. Ives believes that by acquiring Box, Apple would be able to get into the enterprise storage business and “expand its product tentacles (hardware/ storage) into the enterprise cloud frontier.” When paired with the IBM partnership, he said Box could help Apple to ramp its iCloud platform, which currently targets consumers, into a platform suitable for businesses.

The analyst also thinks Adobe would help Apple in cloud services, particularly by targeting creative businesses. He believes Adobe’s services could help the company sell Macs, iPads and iPhones to businesses with a creative focus and adds that the company “would also be at the center of the digital transformation within enterprises” through Adobe’s Document Cloud and Marketing Cloud. Enterprises are using both in their digital marketing efforts and in handling their growing needs for mobile devices and the Internet of Things.

GoPro a possible target?

Ives also suggests that it “would make sense” for Apple to acquire GoPro because action cameras are “uniquely positioned at the intersection of Apple’s smartphone, wearables, and multimedia offerings.” Further, the analyst said GoPro’s new products might enable the company to get into areas in which its competitors are already focusing on, like drones and virtual reality, as it plays catchup in these areas. Further, he thinks GoPro could integrate well with iTunes,  TV and the company’s other multimedia ecosystem.

Spokespeople for Box, GoPro, and Adobe did not immediately respond to requests for comments.

Tesla acquisition a long shot

Of course no report about potential acquisition targets for Apple would be complete without a reflection on Tesla Motors. This fairy tale has been circulating through the media for years, and it doesn’t seem any more likely to be true now than it was when it originally appeared.

Apple has been repeatedly said to be working on building an electric car codenamed Project Titan Ives sees a 60% to 70% possibility of it making an appearance by 2020. He does think cars is a “key long-term growth initiative” for the firm over the next 10 years, and he thinks the company could significantly accelerate its entrance into the next-gen automobile industry by purchasing Tesla for its battery technology.

He thinks Apple could gain “valuable economies of scope” while moving into mass-market volumes in consumer electronic batteries, automotive software and related areas. Ives expects Apple to move slowly in the automotive world, however, and sees an acquisition of Tesla as unlikely even though it would help speed up the process. Of course the tech giant may not even need to buy Tesla if it keeps hiring every engineer the automaker fires.

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