Sequencing Apple's DNA

9On Company Acquisition

9.1. The chasm

We have seen how important acquiring external assets for large companies which are technology thirsty is. The motivation looks simple when catching up with competition or erecting entry barriers for dangerous competitors. After all, acquiring is controlling, at least on paper. But, does an acquisition strategy amounting to quick gains or long losses?

9.1.1. Business school

The CEO must seize any opportunity to buy competitors, to increase the market share. The necessary effort to reach product line convergence is estimated and engaged after the acquisition. In some cases, it may compromise the financial interest of the operation. Coming across the situation by then is too late....

9.1.2. Apple

Market share is not the fundamental objective. When buying a company which, as a start-up, frequently has no market share at all, the only thing that matters is the potential of its technology for the product lines of the company, and the time to market gained by acquiring it. The offering of the acquired company, if any, is immediately withdrawn from the market, to become an Apple exclusive differentiating factor.

Apple never buys a company based on its established market share.

9.2. Amplifying the gap

Table 9.1 is borrowed from Wikipedia and shows the list of companies acquired by Apple since 1988. It traces the historical acquisitions made ...