The Northern Spy
Going Shopping with $60-90B
Apple's latest quarter
saw the company finish with the usual record sales and profits, the accumulation of some $61B in loose cash with much more already pouring into the coffers, and at least a hint from the iCEO that the money was beginning to burn a hole in the corporate pocket. How would our reader like to go shopping for goodies on an essentially unlimited budget, or at least one larger than many countries? The Spy thinks it a bit late for Halloween, so let's imagine a Christmas shopping trip, though the two dates do have much in common. After all 31(Oct) = 25(Dec).
So, when iSteve is lying awake at night, and he's done with counting lions leaping over the trackpad, with thoughts of merging iOS with MacOS at the lower notebook end completely crystalized into action plans, what should he dream about buying as groceries for all his little Cupertino elves or as presents for the boys and girls to whom he delivers to from his high technology?
Ah, but what fits in iSteve's stockings, at his dinner table, or under his corporate tree, depends not so much on what he is buying but on what else he is (really) buying, so to speak. After all, playing monopoly with real money does require more analysis than throwing a die and hoping to land on Boardwalk, just because.
Speaking of monopoly, becoming an investment bank such as Brookfield Management Associates and their ilk, then using the money to purchase, say, downtown Vancouver as a rental property, the Port Authority of New York for a billionaires' yacht moorage, and/or the entire world's yttrium mines to corner a rare earth market, might be substantial money makers, but aren't the kind with which iSteve appears comfortable.
Returning dividends to shareholders also seems outside his pale, off the dessert menu, not part of Santa Steve's sleigh manifest. So let's assume a technology shopping trip--one that would enhance the Apple to which iSteve would like us to become accustomed.
If he's in the market for revenge eaten cold, he could pick up Dell for chump change, close it down, and return the other shareholders' money. A delicious tidbit, but the iSteve hasn't ever been given to fulsome gestures made primarily for effect, so score this one as unlikely.
If heavy irony were the buy, IBM would make a tasty course, diced and served with beet tops, not just for its big iron, but for its growing corporate service business, data expertise, and iconic enterprise mindshare. However, iSteve seems to prefer that the enterprise pay court to him on his own terms and via the halo effect rather than him taking flowers to his fellow CEO billionaires, so this sounds like a non-starter as well.
If it’s integration on the hardware side, a chip company or two might make a good Christmas appetizer. However, iSteve's inaction on plenty of such opportunities since the Spy first made this suggestion, and his apparent willingness to contract out manufacturing in general, suggests taking the possibility of this menu item with more than one grain of salt. 'Course, all the Intel annoyances would go away if Apple owned the biggest deep fryer of all chip makers, but the antitrust people might have something to say about that. Perhaps a small order of chips rather than a large. A switch from an Intel chip to a proprietary one would not be too much of a reach, provided Apple controlled the design and manufacturing.
On the software side, Apple already has some big-time products, including a real database application (which MS lacks). What's missing? Robust enterprise-scale word processor, spreadsheet, and accounting software. But of these three, only the first category boasts potential buyout opportunities, the most prestigious of which would be Nisus Writer Pro. Next to Excel, other spreadsheets are mere toys, and no one has a Mac accounting package significant enough even to do fund accounting for charities. Both would have to be developed from scratch, projects that could easily burn appreciable percentages of that loose change in the Apple vaults. Feasible? Yes. Likely? No. iSteve appears to have other fish to fry with his chips.
If rapid expansion on the retail front is the white meat he plans to swallow for the main course of his corporate meal, Radio Shack/The Source might prove a good foundation for the main course. iSteve could banish the junk computers and cell phones from the premises, keep the hobbiest merchandise, and add a kajillion small stores in the malls of North America to his retail Mac/iPhone/Pad/Pod sales outlets in a one swell foop. Throw in, A&W, Wendy's, or the whole of Tim Horton's, and he could add ketchup with those chips. However again, the Spy sees iSteve as perhaps a pizza and Jolt kinda guy, but otherwise eschewing fast food for upscale steak and sea food served at a trendy address.
Buying RIM, Motorola, or Nokia would all allow expanded reach in telephony, and might seem worthy of secondary tree-gift status. But that's what all three are these days--telephonies, on the way to the depths where Palm now ekes out bare existance as a remnant of a bygone era. How could he buy such a present for the company that already has everything they offer and more? Scratch this one from the idea list as too late to the table. The meal's already been served and eaten. (Mixed metaphors, yes, of course.)
Likewise Facebook, or a search engine—more interesting, and trendier, but which the Spy suggests would have too much a "not-invented-here" look and feel to fit in well with either the Cupertino master chef's menu or his tree decoration scheme.
What then? Well, iSteve does seem to be moving into data provisioning, and in particular the entertainment content delivery business. Witness the several iterations trying to get iTV right. This penchant suggests several interrelated shopping trips that could tap the Cupertino bank account to an effect iSteve might find satisfying:
first since he seems to have decided without even trying it on that the vast new apple data centre in South Carolina is a size or two small, and since in that line of business 100% reliability (and therefore redundancy) is essential, he could throw a few bill at clones of the facility, building at least one more on each continent to ensure worldwide reach. Alternately, he could buy Ireland or Greece and put a whole country under a single data centre roof. Hey, don't laugh. They'd have an economy.
second data centres aren't of much value unless there's something inside all those shiny boxes. Since content is king, why not pick up a few content delivery/streaming outfits and try them on for size. Combining existing music, video, book, magazine, and newspaper streaming/serving into a single coordinated outfit might make just the right kind of fashion statement for the new year.
Perhaps he could take the Library of Congress private. Since the government itself can't or won't, why not pay down some of the national debt from the private sector while he's at it? More practically, Amazon and Fictionwise are the biggest and best established eBook retailers, and either would add much credibility to Apple's tentative and minimal efforts in the field thus far. So would picking up a major textbook publisher and showing the world how schoolbooks could be distributed properly. Music streamer Spotify has also been mentioned by some pundits, though Apple has a track record of closing down competition it purchases in that field.
third a vertically integrative approach here suggests owning the ribbon and string as well as the box and contents that go under the tree. So, why not either collect an existing network like AT&T, tie up a nice bundle of cablevision outfits, or plunk down for an entire television network as a suitable trailer to the main course, or go all out and buy a media empire like Time Warner.
Why not tailor one of his own? There's plenty of dark fibre out there asking to be leased, room for more comm towers to create Wi-Fi everywhere, and surely a satellite orbit or two available. iSteve could pick up NASA for a side dish and its launch capabilities. Hmmm. More debt removed from the back of the public.
fourth, if the real goal is a content production foothold, why not bring existing ally Disney/Pixar in house, and create Apple-branded content--no negotiations needed, except perhaps with Minnie.
fifth, and least in this series since others have already flogged the idea to death, entertainment business expansion does bring Sony to mind as a possible tree present. iSteve could scrap their irrelevant computer business, but keep the gaming and other toys, even use existing factory facilities to make monitors. Apple would gain vertical integration, marketshare, mindshare, industry expertise, juicy technology patents, some handy retail outlets (see earlier suggestion), and a more substantial Asian foothold. Given iSteve's relentless yen for consumer dollars, yuan to believe this rumour has real legs. OTOH, the fit does not appear exact, and the Spy strongly suspects that iSteve thinks the future lies with the delivery of content rather than toys.
The Bottom Line
Apple already owns some of the premiere means of experiencing content. If the company is to integrate vertically then, all things considered, the Spy forecasts a shopping spree focused on entertainment and information content creators, and the means of storing and delivering said content. Thus, we should look for iSteve to buy or to create a network in both those senses of the word. Has the Spy ever been wrong?
Que CIRA, CIRA--Yup, it was out with the old guy.
The voters have spoken, and elected the other CIRA sitting board member for the one slot available in the category for which both he and the Spy were running. Best wishes to that other Rick, and the Spy will continue to have a watching brief on the domain industry, though from somewhat afar for now.
--The Northern Spy
Rick Sutcliffe, (a.k.a. The Northern Spy) is professor and chair of Computing Science and Mathematics as well as Senate Chair at Trinity Western University. He is also on the board of CIRA, operator of .ca. He's written two textbooks and several novels, one named best ePublished SF novel for 2003. His columns have appeared in numerous magazines and newspapers (paper and online), and he's a regular speaker at churches, schools, academic meetings, and conferences. He and his wife Joyce have lived in the Aldergrove/Bradner area of BC since 1972.
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