Apple ($AAPL) is one of the biggest companies on the planet. When it comes to market cap, they’re bigger than two ExxonMobils, ($XOM), one-and-a-half Amazons ($AMZN), and 28 Snapchats ($SNAP). The Cupertino company got that way by making innovative, attractive consumer products (most notably the iPod and iPhone) and selling them at a premium. Some analysts even think Apple could become the first-ever publicly traded trillion-dollar company.
During Apple’s recent earnings call last week, the company announced they had $257 billion in cash lying around. Most of this cash is held offshore to avoid high American business taxes. Some of it will be distributed back to shareholders as a dividend. The rest could be used to further fund research and development projects and pay off corporate debt.
Yet $257 billion could also go a long way to accomplish something Apple specializes in: buying other companies.
Apple is no stranger to acquisitions.
The American tech giant bought numerous small tech startups over the last decade-plus to incorporate their technology. Siri, for example, was owned by Siri Inc., a company purchased in 2010. Apple’s barely used Cover Flow feature was originally a creation by Jonathan del Strother, who sold the technology. In 2014, Apple famously purchased the Beats Music and Beats Audio brands for $3 billion in their biggest acquisition ever.
These acquisitions are chump change compared to the more high-profile purchases made by publicly traded companies. Corporations spend tens of billions on their competitors every year, all in the name of decreasing competition or acquiring new technologies. With $257 billion, Apple has the chance to do the same.
Who could Apple buy?
Apple is consistently rumored to buy Disney ($DIS), a company with a $177 billion market cap as of this writing. Though such a prospect is within the realm of possibility, the chances of the company spending hundreds of billions on Disney (and taking on massive debt) is rather slim.
Instead, Apple could buy smaller, popular brands and integrate them within their products. There’s no guarantee that they will. There’s also no indication from company executives that the company will go on a massive acquisition spree. Yet with $257 billion laying around, they can do pretty much whatever they want.
Here are some notable public and private companies Apple could acquire and make more like…well, Apple:
Will Apple buy these companies?
Who knows? The tech giant already has an app with Snapchat-like functions. They recently received permits for a self-driving car project (a la Uber). The company’s Apple Music and Apple TV divisions include a budding entertainment division (like Sony). They also own iTunes, a premiere content distribution platform that dwarfs that of TimeWarner.
By buying any of these companies, Apple could further grow their homegrown efforts and bring more people to exclusively use Apple products. It would also allow them to make money through other avenues, diversifying their revenue stream. At the same time, Apple won’t shell out tens of billions for a completely unrelated company without giving shareholders an excellent reason for the acquisition.