Apple pretty consistently pays bottom dollar for acquisitions, and typically does an acquihire which results in the former company's product being deep sixed. So this looks like an autonomous driving skill acquisition, but for all we know the remaining team will be purposed to guessing where you are by dead-reckoning on your phone, or improving Photos' judgement or who knows.
In fact the only case I can remember when they didn't do this was with the liquid metal company, and that one didn't pan out. (there are presumably others but I don't recall any off the top of my head.).
They have bought a few products, like iTunes, without buying the company.
Siri, TestFlight, Workflow, Shazam, Beats, FoundationDB, SoundJam ( iTunes ), FileMaker, P.A Semi, PrimeSense, and of course the biggest one that is still going strong, NeXT. ( Well technically it was NeXT acquired Apple and changed its name to Apple /s )
And I don't think they acquired Liquidmetal the company, they only signed a deal for Consumer electronics exclusive use up to a period of time, and my guess was LiquidMetal were too expensive and they could not figure out a way to hit High Volume Production.
Although I generally do agree Apple pays bottom dollar for acquisitions. One reason why I am not hopeful of them buying the Intel Modem business along with all the 3G - 5G Patents.
If you want to buy some cheap metalworking equipment, buying from a small metalworking company on the cusp of bankruptcy can get you a great price.
But if you want to buy a business that makes a lot of money, you'll be hard pressed to find one if you only look at small companies on the cusp of bankruptcy.
What Apple does is buy companies with fantastic technology, but a very limited ability to bring that to the market as a compelling product on their own.
Siri had limited value as a standalone app interfacing only to public APIs and services, but huge value as a deeply integrated platform interface with links into all the platform services. The original company could never realise that sort of enhanced value, so as a standalone player it's value was limited and Apple could buy it (relatively) cheap.
PA Semi as a small independent chip designer could eke out a decent living doing small bespoke designs for companies here or there. That has value, but it's limited. However as the designers of the undisputed heavyweight champion mobile CPUs, in the most successful consumer product of all time, providing significant product differentiating performance and features, they have enormous value but _only_ if Apple buys them.
User ksec gave a great list of successful Apple acquisitions for which their core products still exist and are thriving and the above pattern applies just as well to all of them. That's the primary model for Apple. I'm sure there are cases where they buy teams for talent, but it's usually talent in a specific area Apple can directly leverage somewhere in their products.
EDIT: I would into be at all surprised if Apple went into these negotiations saying "We love your technology, it;s great. Here's an offer. BTW here's the brochure of another similar company with almost as good technology we could buy instead, integrate into our products and kill you with.".
> *What Apple does is buy companies with fantastic technology, but a very limited ability to bring that to the market as a compelling product on their own.
Not always, Beats headphones was them buying a company producing complimentary products, most of the value was in the brand, marketing and the distinct visual design of the products. There's nothing special about the technology and the company was very effective in bringing their product to market.
This story about Drew Houston meeting Steve Jobs for acquisition talks pretty much confirms the supposition in your edit.
“'You either got Chill Steve or Very Mean Steve': Dropbox founder remembers being summoned to Apple by Steve Jobs — then told his startup would be killed”
If you‘re Apple and only want to buy businesses that make „a lot of money“, you‘re pretty limited. Most oh so successful and profitable companies are only making nickel and dime in regards to Apple. Why pay top dollars for that?
I don't think anyone is arguing against that. I think it's mostly that "the lowest price [they] could" is typically a pretty aggressive offer. Apple is really great at finding companies that have great proof-of-concept products with no way to polish them or scale them and then using their resources to make the "Apple-y" version of that product that's integrated into everything. They're rarely the only company looking at these potential acquisitions and they're more concerned with locking them down than they are at negotiating and potentially losing out.
Many people criticized Facebook for its overpriced acquisitions over the years at the time, but what’s app and instagram have payed off huge for them. Cheaper acquisitions might have not planned out so well. The price can be worth it
Facebook bought a user base with the WhatsApp and Instagram acquisitions. I don't think they cared very much about the technology or the skill set of either WhatsApp or Instagram.
What makes marketplaces work is the "saddle" shape of transactions.
Alice wishes to buy a house. She narrows her choice down to three candidates, and is looking to pay the lowest possible price for one of the three.
Bob has a house for sale. After showing it for a week, his agent puts it up for offers, and he is looking to accept the highest possible price.
If Bob's highest possible price is also Alice's lows possible price, they both win.
So it is very possible for one party to sell for the highest possible price, while the other party is buying for the lowest possible price, even if both have the same information about the market.
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So yes, Apple could have paid the lowest possible price while simultaneously--and you would be correct--they sold for the highest possible price.
If we're listing PA Semi, then I'll add Fingerworks. Their first-party products (e.g. TouchStream keyboards) vanished, but their multitouch technology heralded an entirely new age of touch-based UI. Like PA Semi, it took Apple to realize the potential we've now seen from that tech.
Essentially some of best acquisitions in recent history (although I’d say FB has done better but they had their evil ways). Pretty much the opposite of Google.
Well, Youtube is a stark counterpoint. Google today without Youtube is unthinkable. While I despise the company, Doubleclick also radically changed Google and was probably what changed Google into the advertising giant they are now.
True, particularly about double click, but is YouTube really a well managed acquisition?
It seems to be a victim of Google’s schizo approach to product in the sense that every 12 months it seems to be following a new strategy or launching a new product to replace an older one Id never used anyway. Their whole YouTube Red stuff, and YouTube Music, I have no idea what the long term strategy of this company is. Outside of ads of course.
Shazam is another, Apple removed Admob, Bolts, Doubleclick, FB Ads, FB Analytics, FB login, Inmobi, IAS, Moat, and Mopub from the app and continued to update it.
Is Shazam actually one of the safer "always on" microphone apps. I didn't realize it was owned by Apple.
I found the desktop app pretty useful in just identifying songs friends played when people were over, popular songs in commercials, and just popular songs that played when I lived abroad on tv. But as I thought about the security implications of apps like Alexa and Hey Google I eventually uninstalled it. Siri was always basically useless so I kept it off mostly for that reason.
Logic Pro, later the Alchemy synth, then TestFlight are the acquired products that come to mind. However, Buddybuild got acquired and shut down but hasn't resurfaced yet in full, i.e. as a CI tool.
I know, but they don't accept new customers ever since the acquisition. Apple recently added a screenshot/feedback function to TestFlight, which is just one of the many things BB could do. Anyway, I'm hoping TestFlight will become a full CI tool or otherwise, what was the point of this acquisition? However, it's been more than a year already...
Apple is cheap company inside. You see it in their employment offers, pay, benefits, internal snacks & meals, laptops & test devices they give to employees, etc.
Only when your a 'special person' do you get something competitive, but that applies to any company.
Intrinsity wasn't cheap given it was primarily for IC design tools (Fast14). Though you might argue it was a good deal for Apple because it possibly gave them an edge that other IC design houses lack.
I don't think Apple did acquire LiquidMetal (that might be what you mean, but it reads as if you think they paid over the odds for the acquisition) -- they acquired a licence for their IP in 2010, renewed in 2012, and in 2015 established a licence in perpetuity for consumer uses of the technology (I suppose 'consumer' is a useful distinction because there may be military applications for it).
Apple has been filing its own patents for liquid metal alloys and technology since then. It's still a nascent area, but Apple has had a consistent broad thematic focus on materials science in R&D for the last ~7-8 years, so I'm not sure how one could reliably determine this licence to have not panned out.
As far as I know the only direct application of the technology we can see today remains the SIM-removal tool shipped with each iPhone.
Yes, their tagline should be "repurposed in California" instead of "designed in..." They don't really "innovate" much anymore. Well, except record prices.
In fact the only case I can remember when they didn't do this was with the liquid metal company, and that one didn't pan out. (there are presumably others but I don't recall any off the top of my head.).
They have bought a few products, like iTunes, without buying the company.