It's been an interesting year for Apple success building on success with constantly growing Mac sales, a runaway hit with the iPhone and record numbers of iPod sales The net result is that Apple is in teh enviable position of sitting on a huge pile of cash just when the market is in the process of imploding. There are an awful lot of companies that are feeling the pinch and as a result are devalued and open for acquisition.
A number of different targets have been floated out there recently, most notably
Sprint and General Motors.
In some ways, Apple's success has been all about keeping their eye on the ball, and more importantly, where the ball is going to be in the near future, tied to a general philosophy of building great products and delivering excellent customer service.
So the question from my perspective is whether it's in Apple's best interest to step outside of their core skills and take a big bite out of some other unrelated industry.
Sprint is the first one that comes to mind, since it's sort of kind of a related industry now that Apple has delivered on the iPhone. But there are a number of reasons why this really is a step outside of the focus of Apple. Apple is a product based company and Sprint is a service company. Apple's history on the services side has been a mixed bag, from the failed eWorld online community to the current, reasonably successful, MobileMe service (despite some growing pains). MobileMe is the best, longest lived of Apple's service offerings and is tightly tied to Apple's product offerings. Stepping into the cutthroat business of cell phone services, especially with an existing long term contract with AT&T seems to be a bit of a dicey proposition. Where's the synergy?
The other thing to remember here is that despite the original US-only launch of the iPhone, Apple is a global company. Is buying a cell provider in the US a logical extension of their strategy? Generally Apple tries to ensure that whatever they do in the US is replicable in other markets. The US is often used as the test bed for limited duration or initial shipments, but always with an eye towards global roll-out in the longer term.
Buying Sprint would be an interesting experiment, but would also come with all of the headaches of dealing with all of their competition in the handset marketplace, including conflicts of interest. Not to mention that it's bleeding money and subscribers all over the place and the turnaround wouldn't happen on a dime, especially given the current state of the economy.
Don't forget that Apple is currently profiting from all of the existing providers subsidies for the iPhone - Apple sells them for around $600 and providers are kicking in about $400 in subsidies which hits their short term revenues. Buying Sprint doesn't give Apple any edge here as they would end up having to subsidize their own products in order to remain competitive - sinking even more money into the deal.
It would be a bold and daring move to buy Sprint in order to push the bleeding edge with respect to new technologies like WiMax and white space spectrum communications, not to mention acquisition of the spectrum licences held by Sprint. But overall, it doesn't make a lot of strategic sense given the limited information I'm using to analyse the situation.