During its conference call for the March quarter’s disappointing earnings, Apple CEO Tim Cook confirmed again that Apple continues to be on the lookout for companies to buy.
In fact, he suggested that Apple could buy a business larger than Beats, which Apple bought in 2014 for $3.1 billion.
Cook said (emphasis added):
We’re always looking in the market about things that could complement things that we do today, become features in something we do, or allow us to accelerate entry into a category we’re excited about. So as I have said before, our test is not on size. We would definitely buy something larger than we bought thus far. It’s more about the strategic fit and whether it’s great technology and great people. And so we continue to look, and we stay very active in the M&A market.
Cook went on to say that Apple has bought 15 companies in the last four quarters.
The key to his comment is that Apple doesn’t need revenue or users because it has plenty of both. So when it buys companies, it’s looking primarily to add technology and the talent to operate it.
Cook’s comment that Apple could buy a company to “accelerate entry into a category we’re excited about” also suggests that it could purchase automotive-technology companies as it develops its car.
But as Cook suggested at Apple’s shareholder meeting earlier this year, when it finds a company it likes, it will gladly buy it no matter its size – even if it has to spend a good chunk of its $233 billion in cash reserves.
So this means that Apple could conceivably buy a company like Dropbox, worth $10 billion, as I argued earlier this month. But the question is whether Apple sees technology it would like to own.
Apple currently has more than $250 billion in cash and marketable securities it could use.