Since the iPhone launched in 2007 Apple has become the most valuable, profitable, and richest company on planet earth. Despite tens of billions of dollars in massive and ill-advised stock buybacks, despite tens of billions spent in shareholder dividends, Apple sits on nearly $200-billion in cash and yet seems to have difficulty figuring out what to do with all that money.
Meanwhile, SoftBank CEO Masayoshi Son wants to spend $31.4-billion to buy chip designer ARM Holdings, the same ARM that Apple uses as the foundation for its A-series CPUs that power the iPhone and iPad. SoftBank is a large, multinational Japanese telecommunications conglomerate that also owns U.S.-based Sprint.
What does CEO Son know about the future that Apple does not?
I always make investments at the beginning of a paradigm shift. You have to go to the front of the edge. IoT is going to explode over the next 10 years.
Son and SoftBank’s record for bets is enviable. The company was an early investor in Alibaba and Yahoo!, among others.
My desire was to acquire T-Mobile and combine it with Sprint, but the U.S. government didn’t like that idea. My mistake.
The candor is refreshing. So is the hubris.
There are all kinds of direct and indirect synergies. This year they will be small. And next year they will be small. Ten years from now those synergies will be gigantic. In 10 years to 20 years from now people will be jealous
Son is betting on IoT; the so-called Internet of Things which many say is the future of technology.
The internet of things is the network of physical devices, vehicles, buildings and other items—embedded with electronics, software, sensors, actuators, and network connectivity that enable these objects to collect and exchange data
Related to the Internet of Things and SoftBanks’ big bet on ARM is Apple because our favorite iPhone and iPad company uses basic ARM designs for its own mobile CPUs. One can argue that Apple made its way from near bankruptcy to solid financial footing thanks to ARM. The company was an early investor in ARM and Steve Jobs sold ARM stock to help prop up Apple’s financials back in the last century.
Here’s the question in all of this. Where is Apple?
There’s an old Wayne Gretzky quote that I love. I skate to where the puck is going to be, not to where it has been. And we’ve always tried to do that at Apple.
Where is Apple skating to these days?
Stock buybacks. Dividends. Billions for a headphone company. Meanwhile, sales of the company’s flagship products are going down. iPhone competitors have better hardware. Half the Mac lineup is ancient by today’s tech standards and has not been upgraded in years. The once high flying and hot selling iPad business has languished and decayed for years.
My fear is not that Apple does not know where the puck is or where it’s going. My fear is that Apple has forgotten how to skate.