Apple recently made a tremendous investment in another company. The tech giant has just spent $400 million to acquire a “music discovery app” known as Shazam. The purchase drew attention not so much for the sale price, but for Apple’s involvement. Apple’s business model does not greatly emphasize the purchase of startup properties.
Apple’s past presents a business model many startups seek to emulate. Steve Jobs’ launch of a startup computer company eventually changed the face modern technology. Apple, despite owing its inception to a successful startup plan, has not chosen to take the reigns of other startups. A common business model in the tech industry is to pinpoint startups on the verge of success and purchase them. Hotmail may be one of the most famous examples of a startup purchased by a major player and then taken to lofty heights. Apple continues to leave that business approach to others.
Mergers and acquisitions do not often factor into the Apple business model. The company continues to focus on spending funds, significant funds, on developing new products and concepts in-house. Exceptions to this approach to take place at times. The purchase of the Shazam app indicates Apple may find certain startups valuable enough to acquire. In 2014, Apple spent a massive $3 billion to acquire Beats Electronics. Overall, the past five years have not reflected significant acquisitions activity.
Apple does things a certain way because the established method clearly works well. Apple’s profits and stock prices indicate current policies. Making drastic changes such as shifting resources to expand mergers and acquisitions might not be the best strategy. Things could change in the future. At this time, however, Apple prefers to remain on its traditional course.