More ideas for where Apple should park its cash horde

More ideas for where Apple should park its cash horde

Summary: Apple has $25B in cash in the bank. Where are some professional market choices for Cupertino to invest in? Think engineering.

TOPICS: Banking, Apple, Hardware

More ideas for where Apple should park its cash hordeIn a recent column, my Apple Core colleague Jason O'Grady offers some suggestions where Apple could spend it's $25B in cash. He pointed to some consumer content companies, such as Tivo.

Fine ideas. On the other hand, I can imagine Apple driving up its longterm value with some moves in the professional market.

At the top of the list would be Autodesk Inc. This is the major design software for engineering and manufacturing, as well as offering products for both 2D and 3D work in media and entertainment markets.

Like Apple's approach to its customers and markets, Autodesk provides software platforms rather than technologies. While Autodesk products would be hit by a downturn in manufacturing in a worldwide recession, the company's products are business-critical applications that will grow as the economy recovers.

This purchase would certainly fill in some gaps in the high-end Mac OS content creation/film and animation production tools (think Autodesk 3ds Max). And the CAD industry would finally get the choice of a Mac edition of Autodesk. This move would be a great enterprise play for the Mac OS and support sales of Mac Pros and MacBook Pros.

Next on my list would be some bolstering of Windows virtualization on the Mac platform. There doesn't appear to be a way to pry Fusion out of VMware (or out of EMC to be more accurate) but Parallels is a young company (almost 10 years old) with only one round of venture behind it.

I know this move would be a mixed message to Mac developers and to the community. After all, Mac users want Mac applications. And Apple wants to sell its development environment, which also supports its important mobile platforms.

Still, Macs need to play well in the enterprise and running Windows programs without a hit in performance or in compatibility is essential.

In addition, Vista compatibility on the Mac -- even with Boot Camp -- continues to be troublesome for many enterprise and SMB customers. No matter how much Apple's Mac vs PC advertising campaign wants to slam Vista, Macs must be able to run it perfectly.

Finally, Apple needs to pay more attention to its Mail client and to compatibility with Microsoft Exchange. Entourage 2008 works better than before, but it's not the answer. Is there a company that Apple could buy to fix this problem? Eudora fanatics would suggest buying it from Qualcomm.

Perhaps Apple should buy Microsoft's Mac Business Unit and gain access to all the licenses and APIs that are needed to really make a cross-platform Exchange Server solution work? That's an idea!

Topics: Banking, Apple, Hardware

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  • New OS - Instant On OS X

    Invest in converting the iPhone OS and interface into an instant on OS for
    macbook and mini that runs from the BIOS. Maybe even allow it to sync with
    your existing iPhone or touch for apps and bookmarks.

    Maybe even work with a sidewhow style display for instant acess to emails
    and web. ie, iPhone or iPod Nano wide screen style display built into the
    glass trackpad.

    Or maybe a wireless keyboard with a glass trackpad built in please.
    • ...

      You don't know what an 'instant on' os is do you? It doesn't mean that it boots fast, it means all applications talk directly to the processor. The iphone OS does not qualify, or even come close.
  • Autodesk makes sense

    Not having AutoCad mac hurts Apple
    quite a bit.

    Autodesk's media products, with the
    exception of Maya, would also help
    Apple at the high end. Since most run
    on Linux, I'm guessing that Mac porting
    would be easier than it the apps were
    just Windows.

    Autodesk's market cap is only about 5
    Billion so it's affordable. In fact, Apple
    could just by a bunch of the stock on
    the open market to gain power in the
    boardroom for a later takeover.
    • I agree about Autodesk

      Buy just enough to ensure that Autodesk's flagship product will appear on a Mac.
      What would that cost? $2G USD?
      • I disagree about Autodesk

        They would have autodesk with all the CAD and Media and Entertainment division and then they'd do what? Take the core features so that they can add them to iLife 1010?

        They bought Nothing Real and thanks to them Shake is pretty much a dead app now.

        This is what would happen if Apple bought Autodesk:
        they would release the mac versions of AutoCAD, Viz, Revit and all that. Mac versions of Toxik, Max, Softimage (because Softimage now belongs to Autodesk). Then on the next release cycle they would kill the windows versions, cut the prices of the mac versions to something ridiculous like 300usd for Maya, while mantaining the high prices on the linux version so that everybody who wants their apps decides to go for the mac even if linux is superior.

        Two years later they would just forget about the apps because they're too busy producing new ipods and new thin laptops that can fit between two pages of your favorite book.

        Apple can't handle the high end market. You people should know that already.
  • I think buying Sony or another consumer electronics firm

    Apple Inc is going to grow in the consumer appliances
    and it needs to create new products that it can do
    good software for. If Apple buys Sony, it gets access to a
    whole slew of applicances that it can wirelessly connect to
    own servers and sell software, films, music, radio, etc By
    rights, Apple and Disney could create a new home and
    enterprise media unit based on fantastic hardware driven
    OS X. An Apple-Disney-Sony thing makes real sense to

    Jobs, as largest Disney shareholder and having control of
    Sony Films, Sony appliances, Sony Music, could offer a
    fantastic HD television experience with the Apple TV
    appliance built-in. I think that is the next thing for the
    Home Media market and Apple should be there making it
    • say what?

      Apple should buy SONY? With Apple's 25 billion?
      (Sony projected revenues between $150 billion down from 240 above SONY report

      Hmmmm, and maybe BED BATH AND BEYOND should buy Walmart?
      • no doubt

        yeah, thats a bit crazy.
    • I doubt Apple could afford to buy Sony!

      M Wagner
  • Bonds

    There are corporate bonds out there returning upwards of
    14%, if you know where to look. There is a crisis in
    commercial paper pushing its yields way up. Competent
    money managers can do more with all that excess cash than
    just making some startup company founders rich. Heck,
    there are foreclosed houses all over California, some of them
    that sold for 500K two years ago that you can pick up today
    for 200 or even less. Investing in technology is risky.
  • RE: More ideas for where Apple should park its cash horde

    With 25 Billion it could buy many things, but I think Joint
    venture with Adobe makes a lot of sense. Strengthens an
    already solid market for Apple adds many other programs
    and is similar in culture to Apple.
  • RE: More ideas for where Apple should park its cash horde

    An instant on OS is coming in the new MacBooks with Led
    screens. Instant on is more a function of the display than the
    software, but with a small footprint software Apple has more
    of a chance than the Bloatware King: Microsoft.
    • How Instant does...

      instant need to be? My Macbook Pro wakes from
      sleep as fast as I can open the lid. Even a cold boot,
      including logging in, doesn't even take a minute.
  • Parallels is a good idea too

    Create a built in API similar to Cocoa that will allow Macs to run Windows applications by emulation without need for Windows.No need to install Windows in a virtual environment.
    • Then perhaps...

      ...they should buy Codeweavers instead, as they're already using WINE to run Win apps natively on OS X.
    • I hate to break the news to you ...

      ... but emulation is simply not robust enough to replace the OS it is intended to emulate -- at least not without the cooperation of the vendor of that competing OS. Otherwise, you are always chasing the latest upgrade of the application that you are trying to support.

      Hardware virtualization is the only reliable solution.
      M Wagner
  • RE: More ideas for where Apple should park its cash horde

    Maybe next to its cash hoard?
  • RE: More ideas for where Apple should park its cash horde

    All these are good ideas but they miss the point.

    Apple has kept itself alive by staying out of the commodity consumer marketplace - accepting lower volumes while retaining loyal customers willing to pay premium prices for premium products.

    In taking this approach to its logical extreme, Apple continues to squander it's opportunities to move into the enterprise market.

    Aside from niche markets, where it's application-base is mature and exclusive to it's hardware, Apple walks away from the business-centric enterprise everyday. Like most of Apple's customers, the high-volume enterprise routinely buys high-end hardware. Because of its high volume needs, the enterprise can be lucrative even at profit margins smaller than Apple is used to.

    Sure Apple offers modest discounts for volume purchases but these are nothing like the steep discounts offered to the enterprise for equivalent hardware from Dell and HP/Compaq. By not aggressively pricing their products to the enterprise, Apple is keeping themselves out of the truly lucrative side of the business.

    When it comes to consumer sales, Apple matches the competition dollar-for-dollar on premium hardware but, by not being willing to match the competition in high-volume pricing, Apple leaves lots of enterprise money on the table.

    By not aggressively seeking parity with the capabilities of Outlook/Exchange, Apple allows Microsoft to keep Apple "in its place" - Strong enough to stay in business (while keeping the DoJ at bay) but too weak to compete head-to-head with Microsoft in the enterprise.

    Unlike Apple, Microsoft is not saddled with manufacturing facilities. Nor is Microsoft particularly consumer-oriented. Microsoft sells to OEMs. Period. They service retailers (anconsumers) only because they have to and, like Apple, their retail sales are always at a premium.

    In the end though, Microsoft dominates because they recognize that their bread-and-butter business is in the enterprise. Apple needs to be willing to part with some of its cash in order to aggressively address the needs of the enterprise.
    M Wagner
    • Apple is an OEM which...

      doesn't need to buy their OS from MS. They
      compete with other OEMs who do buy their OS
      from MS, not with MS as such. It seems they are
      doing this quite well these days, selling their
      computers and gadgets at profits the others only
      dream about.

      Maybe the can buy some foreclosed real estate at
      pennies on the dollar and then, when things
      recover sell it for a profit. Facetious? Maybe!
    • Increased unit sales at lower profit not always good

      Selling more units at a far lower profit per unit
      is not always a good idea. Just look at Dell's
      stock price and market cap as an example.
      Think of all the PC brands that no longer exist. They allowed their prices to get so low that
      profit disappeared.

      Daimler tried the more units at lower profit
      method when they bought Chrysler. That
      backfired bigtime. Mercedes Benz, like Apple,
      has a very good quality rep with the buying
      public. They could not, or chose not, to better the quality rep of Chrysler products. That
      resulted in discounts to move product and even
      lower profits.

      Hershey bought Ronzoni because pasta far
      outsells candy bars. Then they found out that
      the increased unit sales produced no profit
      because most consumers view pasta brands as
      interchangeable and buy on price.

      Both of the two companies above dumped the
      higher volume, lower profit acquisitions
      because there was no profit.

      Apple also faces the problem is all the
      enterprise software that's written for Windows.
      The price of the computers can pale in
      comparison to switching the software, especially
      custom stuff.