Venture Acquisitions by Apple

Acquiring small companies that can be easily integrated in existing company projects

By: Vadim Kotelnikov, Founder of Innovarsityfree online Innovation University!


Innovation Case Studies and Best Practices Venture Acquisitions Apple Innovation Strategies Venture Acquisitions by Apple Venture Acquisitions by Apple


Apple’s Venture Acquisition Strategy and Practices


Apple's venture investing and acquisition strategy is not very aggressive To stay ahead, Apple usually over-invests in its supply chain. The company is reported to pay a significant portion of the factory construction cost in exchange for exclusive rights to the output for a set period of time, and then for a discount once this period expires. Not only does this allow Apple to come out with new components long before rivals, but these components are very difficult to duplicate.

The company makes fewer acquisitions than their competitors. When Apple does buy companies, it's almost always tight lipped about how they will fit into its strategy and how easily their technologies can be integrated into existing company projects. Yet, some acquisitions stand out in terms of adding important features to existing product lines or opening doors into new markets.

The company made its first acquisition in 1988 when it purchased Network Innovations. Apple's $429 million acquisition of NeXT in 1997 helped the company move smoothly from PowerPC to Intel processors. This deal also brought Steve Jobs back to Apple.

In 1998, Apple acquired the intellectual property and the development team from Macromedia to make Final Cut Pro one of the top video desktop editing programs on the market.

In 2002, Apple's acquired a German firm Emagic for $30 million. The Mac versions of it's  high end audio recording and production application Logic was further developed by Apple to produce Logic Studio. The PC version of Logic was buried.

By acquiring FingerWorks, a developer of gesture recognition technology, in 2005 Apple added a significant patent and engineering value to its multi-touch technology package.

PA Semi was another essential acquisition. Apple which is now referring to itself as a mobile device company wants as much of the value chain under their control as possible. Purchased in 2008 for US$278 the chipmaker startup was tasked with making system-on-chips for iPhones and iPods.

Apple's $275 million acquisition of mobile advertising firm Quattro Wireless in 2010 reflects the company’s desire to strengthen its mobile technology portfolio. Quattro deal gives Apple an alternative to Google's entrenched dominance in mobile advertising. Quattro is a counterpart to AdMob, the mobile advertising firm that Google acquired in 2009 for US$750 million. With Quattro, Apple is able to deliver advertising to mobile devices while improving the measurement and execution of digital ad campaigns.


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