Apple acquisitions slow down: Economic instability and regulatory pressure are key factors

News on May 18th: In the past two years, technology giant Apple’s pace of acquisition transactions has slowed down significantly. This may be due to a more cautious attitude caused by factors such as economic instability and increased government scrutiny.

According to regulatory filings, Apple’s acquisition expenditures in the last fiscal year were only US$33 million, and acquisition expenditures in the first nine months of this fiscal year only reached US$169 million, far lower than in fiscal year 2020. $1.5 billion.

According to ITBEAR Technology Information, Apple’s acquisition activities are gradually slowing down. Apple has only made two known acquisitions so far in 2022, namely British startups Credit Kudos and AI Music. Among them, Credit Kudos developed credit score calculation technology to help Apple build its own financial product infrastructure; while AI Music uses artificial intelligence to generate customized music.

It is worth noting that these transactions do not include Apple’s Spending on TV content, such as programming purchases and distribution deals with Major League Baseball and Major League Soccer. However, Apple's acquisitions are relatively small compared to other tech giants.

In January, Microsoft agreed to acquire Activision Blizzard for about $69 billion, while Google-owned Alphabet Inc. acquired Mandiant for $5.4 billion. Inc., and Amazon also agreed to acquire IRobot Corp., maker of the Roomba vacuum cleaner, for $1.65 billion.

Despite Apple's deep pockets, as of last quarter it held $179 billion in cash and marketable securities, it can move quickly if it decides to make a deal. Currently, Apple prefers to use its funds to repurchase shares and pay dividends rather than making large-scale acquisitions.

It is worth noting that in recent years, regulatory agencies have increasingly exerted regulatory pressure on technology companies. Apple is no exception, due to its App The Store has been criticized for its approach and unwillingness to open up iPhone tap-to-pay capabilities to external services. Apple mentioned in last year’s annual report that acquisitions face more risks and may face regulatory approval difficulties or harsh conditions.

The U.S. Federal Trade Commission (FTC) pointed out in a 2021 report that the five major technology giants, including Apple, have acquired hundreds of small companies in the past decade, and many of these transactions have not submitted to antitrust supervision. Agency reports exploit legal loopholes.

Economic instability and increased regulatory pressure may have contributed to Apple’s cautious approach to acquisitions in the past two years. Although Apple is flush with cash, it now prefers to use it for stock buybacks and dividends. As regulations continue to tighten, technology giants need to be more cautious and prudent when making acquisitions.

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