Apple Acquisitions: It is no secret that Apple Inc. (NASDAQ:AAPL) has acquired companies in the past. With that being said, most of the company’s acquisitions are of smaller startup companies.
While speaking at the Goldman Sachs’ Technology and Internet Conference, Apple Inc. (NASDAQ:AAPL) CEO Tim Cook took the time to discuss the company’s views on acquisitions, more specifically why they don’t typically target large companies.
As cited by AppleInsider, Cook had quite a bit to say regarding the purchase of smaller companies:
“If you look at the past three years, we’ve averaged about an acquisition every other month. They’re companies where they have really smart people and/or IP. Generally speaking, we’ve been in many cases taking something they’re working on and move the skills to work on something else.”
In other words, Apple Inc. (NASDAQ:AAPL) does not always look at revenue and potential profit when acquiring a company. In fact, it appears that the strategy is to find smaller operations with smart employees and/or IP.
Later on, he discussed the company’s acquisition of PA Semiconductor:
“This was an incredibly skilled group of guys, and they could supplement an incredible group of folks and they were working on PowerPC at the time. We didn’t have an interest in that, so we moved the skills to work on our iPhone and other engines. We will do more of those.”
As you can see, Apple Inc. (NASDAQ:AAPL) purchased this company because they wanted to take the employees and put their skills to use on iPhone and other projects.
Why wouldn’t Apple Inc. (NASDAQ:AAPL) consider purchasing larger companies, being that they have more than $125 billion in cash on hand? While Cook does not rule this out in the future, he is adamant in saying that the company has a “test” for making such a big decision.