Acquisition on OpTe.ch

Large Questions Loom on News of Apple's Acquisition of Beats

Fri, 09 May 2014 07:21:21 -0700

I wrote a piece yesterday after news broke that Apple is near closing on a deal that would make them owners of Beats for a bit of spare change, $3.2 billion. I highlighted a few reasons why this doesn’t seem to add up, and those are still valid.

Reports seem to be hinting more and more strongly that this is legit, but it still isn’t quite settling right for me. In one camp, you’ve got those that believe the headphones are the primary driver for the deal (Ben Thompson for one). In another (perhaps larger) camp, you’ve got those that think it is for the music streaming service.

Contemplating Facebook's Strategy Based on Acquisitions

Wed, 26 Mar 2014 09:47:01 -0700

Facebook has been making waves lately, tidal waves in fact. After $19 billion for WhatsApp and $2 billion for Oculus, some are left scratching their head and asking some very good questions. Why? How are these related?

I think the answer is simpler than many have offered. I believe it boils down to Facebook wanting to stay relevant long term, no matter what technology or platform enables it.

WhatsApp #

Messaging is a (or the?) primary means of communicating for billions of people, and Facebook Messenger was largely a flop. In a sense, messaging is the simplest highly private social network; you share very specific things with very specific people. I firmly believe that messaging with reign supreme as a top, if not the top, use of mobile phones for the foreseeable future.

WhatsApp: Pay-For-Content is Alive and Well

Thu, 20 Feb 2014 07:11:42 -0700

Apple has made a strong business on trusting that consumers are willing to pay good money for great products. This WhatsApp deal demonstrates the exact same thing. People are willing to spend what they consider to be a fair amount of money for a great product with a great user experience. Obviously some people don’t call Apple’s prices “fair,” but that’s a topic for another time.

This $19B WhatsApp deal makes me extremely happy (and I don’t use WhatsApp or Facebook) if only for the reason of demonstrating that a customer experience focused product still has tremendous value. We don’t need free products with ad support to make the world spin.

On Rumors of Apple Buying Telsa

Tue, 18 Feb 2014 08:27:07 -0700

There has been no shortage of speculation since news broke that Apple’s M&A representative spoke with Elon Musk about acquiring the increasingly famous auto maker. Josh Ong has made a great case for why it might make sense, so I won’t duplicate that.

The whole issue has some red flags that stand out to me as pretty major reasons an acquisition wouldn’t happen.

The auto industry is a low margin industry, especially on the low end. Tesla is not yet competing in the lower end market, so their margins are likely much closer to Apple’s than Hyundai’s, but Tesla has plans to expand into the $30,000 arena where there is simply no way to have Apple-like margins.
The whole situation seems Google-y. Apple’s wheelhouse is making beautiful and simple computing devices. An entry into the auto industry, despite Jobs’ reported desire to do so, is un-Apple-like. With that being said, the auto industry is so slow to adopt new technology that it would be quite easy to disrupt.
Setting aside the magnitude of the purchase being vastly beyond anything Apple has purchased before, the fact that they couldn’t make this purchase quietly is worth mentioning. Apple tries to keep those as quiet as they can, this one would be making headlines around the world.