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Apple now has the cash to buy the whole cell phone industry save for Samsung

Posted: , by Victor H.

Apple now has the cash to buy the whole cell phone industry save for Samsung
You might have already heard that Apple has $82 billions in cash, more than the US government, and more than any other company. Interestingly, it’s also growing and is currently more than the combined value of a couple of phone makers, but is that enough for Apple to buy the whole industry? Horace Dediu of Asymco asks the question by comparing Apple’s liquid assets to the combined enterprise value of major electronics companies. 

And the answer to that big question is “no,” but if you put Apple’s biggest competitor Samsung out of the equation this quickly changes into a “yes.”

The graph below shows how company’s enterprise values have changed from Q2 to Q3, and it presents an interesting bird eye’s view on how volatile this perception has turned out to be in the past six months or so. Apple has steadily grown its cash assets from $70 billion to the whopping $82 billion remaining the biggest firm in the industry, but what’s even more impressive is the huge leap in Samsung’s EV which grew by $25 billion to $78 billion. 

Enterprise value is considered to be a measure reflecting the possible sum needed to acquire a company. It’s calculated by taking the market cap of a firm then adding its debt, and finally subtracting its cash assets.

A couple of events including Google’s acquisition of Motorola Mobility and Sony’s deal to buy Ericsson’s stake out of Sony Ericsson, showed the EV of those companies recently. Nokia has also nearly halved its EV in the period. Overall, however the EV of the majority of phone makers has dropped sharply in the last quarter with Samsung, Apple and Motorola basically being the only exceptions. Not very heartwarming observation, is it? Do you think that this trend will continue, or could the future reverse it? Let us know in the comments below.

source: Asymco

Apple now has the cash to buy the whole cell phone industry save for Samsung

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posted on 24 Nov 2011, 07:31 3

1. shy2papa (Posts: 199; Member since: 23 Jan 2010)


Nice!!!

posted on 25 Nov 2011, 08:25 2

60. doubleD (Posts: 78; Member since: 13 Dec 2010)


"more than the US government". The US gov is over $10 trillion dollars in debt. Everyone has more money than the US government...

posted on 27 Nov 2011, 14:47

62. Lucas777 (Posts: 2121; Member since: 06 Jan 2011)


obviously they mean in current assets...

posted on 24 Nov 2011, 07:43 1

2. speckledapple (Posts: 877; Member since: 29 Sep 2011)


its interesting because if they consider two other companies, namely Google and Microsoft (who are also in the industry kind of) the answers swings back to no. Microsoft got more money than they do.

posted on 24 Nov 2011, 10:08

21. clevername (Posts: 1428; Member since: 11 Jul 2008)


its not including developers of software, Microsoft and google are not manufacturers. Unless you count Motorola for google but that's treated as a separate entity(and not yet part of google anyway.)

posted on 24 Nov 2011, 07:54 6

3. som (Posts: 768; Member since: 10 Nov 2009)


Samsung invested about $70 billions in R&D and new manufacturing plants in the past 2 years. Apple is a phone vendor not a phone manufacture.

posted on 24 Nov 2011, 12:08 1

27. dmn666 (Posts: 194; Member since: 19 Oct 2011)


That was the biggest BS ever. Samsung is a cheapas* korean company. You are free to embarrass yourself by admiring them, but keep your BS to yourself. There is no R&D in Korea. It\'s only reverse engineering just like China.

posted on 24 Nov 2011, 12:27

28. iamcc (Posts: 1319; Member since: 07 Oct 2011)


Good one!

posted on 24 Nov 2011, 08:06 2

4. Striker (Posts: 92; Member since: 06 Nov 2011)


Not completely true. EV is not a fixed number. It is just an estimate that can change easily. While pure cash is another thing, the real thing!

posted on 24 Nov 2011, 08:10 3

5. Heatfan316 (Posts: 332; Member since: 21 Aug 2011)


Samsung will surpass apple according to these graphs it's inevitable, so I say why is the Headline to this article pro Apple? Here is is the answer Victor H.=apple fan:(

posted on 24 Nov 2011, 08:26 1

9. Heatfan316 (Posts: 332; Member since: 21 Aug 2011)


Apple may have more money in cash but Samsung is growing fast, EV will be too high for Apple to purchase

posted on 24 Nov 2011, 11:06

24. agentoj (Posts: 100; Member since: 29 Oct 2009)


Cash is king. Amazon reported consistent loses during its early years and the only reason investors kept their stock in the company is because Amazon had the cash to remain operational.

EV means nothing. You can estimate all you want, but there is no need to estimate value when you are dealing with cash (except the usual price index).

I do not like some of Apple\'s practices, but choosing to be a growth company has been a wise choice. Apple is as fluid as watered down diarrhea!

posted on 24 Nov 2011, 13:39

33. tedkord (Posts: 4277; Member since: 17 Jun 2009)


You sure do paint a pretty picture with your words!

posted on 24 Nov 2011, 08:18

6. Heatfan316 (Posts: 332; Member since: 21 Aug 2011)


By the way Victor you're an editor, Motorola is spelled with one L not two, see if I make that mistake it's alright, but you're an editor, edit your article before you post them.

posted on 24 Nov 2011, 08:54

11. biophone (Posts: 1893; Member since: 15 Jun 2011)


*them


hypocrite?

posted on 24 Nov 2011, 09:10

13. remixfa (Posts: 13902; Member since: 19 Dec 2008)


lol. spelling police busted again.

posted on 24 Nov 2011, 10:51

23. Heatfan316 (Posts: 332; Member since: 21 Aug 2011)


Hypocrite? Read my post again, I said if I make a mistake it would be understandable I'm not an editor

posted on 24 Nov 2011, 11:44

25. biophone (Posts: 1893; Member since: 15 Jun 2011)


You know their people too right. They make mistakes. I even misread your post. O well.

posted on 24 Nov 2011, 13:04 1

31. phungn (Posts: 26; Member since: 01 Sep 2011)


They're*

Sorry I just had to say it :)

posted on 24 Nov 2011, 11:47

26. Heatfan316 (Posts: 332; Member since: 21 Aug 2011)


Got ya back in the Phonearena Awards 2011 article.lol:)

posted on 24 Nov 2011, 09:45

17. Victor.H (Posts: 406; Member since: 27 May 2011)


The worst double \"L\" nightmare of mine has come true! Thanks for pointing that out, good sir/madam, it\'s now been fixed.

posted on 24 Nov 2011, 08:22 2

7. goflet (Posts: 50; Member since: 31 Oct 2011)


i suggest apple to buy every company in the world..so everything we use will be apple branded...so then we can rest in peace...

posted on 24 Nov 2011, 08:56 1

12. andro. (Posts: 1935; Member since: 16 Sep 2011)


That would be a very bad thing,we'd have countless year on year updates of iphone 4ss followed by the iphone 4sss the year later each with no changes but apple extreme price. Apple barely changes their product each year despite massive pressure from android and despite the iphone being behind the curve,if everything was apple nothing would change at all

posted on 24 Nov 2011, 08:24

8. anirudhshirsat97 (Posts: 379; Member since: 24 May 2011)


Is apple figures shown above includes computers and the other things that apple makes, or only cell phones? If other things are included will they include samsungs other products?? Can any1 plz clarify?

posted on 24 Nov 2011, 08:50 2

10. andro. (Posts: 1935; Member since: 16 Sep 2011)


all that money gained from pr advertising condition people buying the same product over and over again year after year.

The iphone 4s sells loads filling apples coffers despite being last years phone again and also having screen problems,battery problems,call dropping or silent call problems,echo speaker problems and now apparently iphone 4s has wifi problems:


http://pocketnow.com/iphone/some-iphone-4s-users-are-reporting-wifi-problems

http://www.google.ie/search?aq=f&gcx=w&sourceid=chrome&ie=UTF-8&q=iphone+4s+wifi+problems

Apple should really thank their pr and advertising department for achieving this money heap despite the faulty products!

posted on 24 Nov 2011, 09:13 4

14. remixfa (Posts: 13902; Member since: 19 Dec 2008)


good for apple. effective advertising is wonderful. nothing like selling the same product over n over again at ever increasing profit margins to people that constantly think its the new greatest thing.. lol.

hey, if i could get away with that, I'd do it too.. you know you would.. lol Apple... the ultimate snake oil salesman.

posted on 24 Nov 2011, 12:59

29. taco50 (banned) (Posts: 5506; Member since: 08 Oct 2009)


The same excuses over and over again. If Apple didn't make a great product it wouldn't sell. Such a tired back pedaling excuse.

Whatever helps you sleep at night. Just know your time is very limited here.


Why do fandroids act like Apple has exclusive rights to marketing?

posted on 24 Nov 2011, 13:47

34. tedkord (Posts: 4277; Member since: 17 Jun 2009)


Apple does make a great product, but that's not a necessary condition for sales success. The general public are notorious for their herd mentality, hence the pet rock. You only need awesome marketing.

You only need look at the album sales charts to see that quality of product can have little to nothing to do with sales success. I mean, how else do you explain Lady Gaga? Hell, people bought in to the Monkees as a band, when only one member could even actually play an instrument.

posted on 24 Nov 2011, 14:02

35. taco50 (banned) (Posts: 5506; Member since: 08 Oct 2009)


To have continued success you need a good product.

posted on 25 Nov 2011, 07:07

58. remixfa (Posts: 13902; Member since: 19 Dec 2008)


so, your saying justin beiber and twilight are great products taco? i knew there was something off about you.

posted on 24 Nov 2011, 15:19

43. iamcc (Posts: 1319; Member since: 07 Oct 2011)


Taco, its not an excuse its reality. Apple has great marketing and that\'s one of the biggest reasons their phone sells well. Get over it.

posted on 24 Nov 2011, 15:48 1

45. taco50 (banned) (Posts: 5506; Member since: 08 Oct 2009)


No one of the biggest reasons their phone sells well is because it's the most user friendly and stable smartphone on the market. It has the best ecosystem between iTunes, app store and iCloud.

Only geeks prefer android. And of course there's people who can't afford iPhone so they get android.

posted on 24 Nov 2011, 18:48

49. andro. (Posts: 1935; Member since: 16 Sep 2011)


Actually from experience instore the icloud is ravening apple users battery and also monthly data allowance,most disable it entirely when they are informed of these factors instore

posted on 24 Nov 2011, 19:27

50. taco50 (banned) (Posts: 5506; Member since: 08 Oct 2009)


iCloud only works on wifi. If they didn't have an idiot salesman they'd be a lot happier.

posted on 25 Nov 2011, 07:07

59. remixfa (Posts: 13902; Member since: 19 Dec 2008)


it only works on WiFi?!?!?!?!? lololol what is this, 2005?

posted on 25 Nov 2011, 09:44

61. hepresearch (unregistered)


I can not afford an iPhone... but I did not get Android either! Then again, I can not afford Android either, so it is no surprise. I guess the fact that I can not afford an iPhone makes me an Android geek by default? >8-P

posted on 24 Nov 2011, 18:44

48. andro. (Posts: 1935; Member since: 16 Sep 2011)


if apple slapped an apple logo onto a used tin can it'd sell well as they'd use the usual mental advertising techinques to make the sleeping masses buy it. To most of these people if it has an apple logo they will buy it no matter how faulty or useless it is,quality of product isn't an issue just social acceptance and perception to have an apple product an be able to say ''I've arrived''. If quality of product was the reason for the sales than a year old phone re-released with faulty screens,silent calls,echo speakers,poor battery life and now serious wifi issues certainly shouldn't sell well

posted on 24 Nov 2011, 19:28

51. taco50 (banned) (Posts: 5506; Member since: 08 Oct 2009)


All these issues only exist in your twisted brain.

posted on 24 Nov 2011, 23:21

56. Pdubb (Posts: 239; Member since: 08 Aug 2011)


So you agree that Windows is a great product? I mean it sells about the best a product can sell. 100's of millions of MS Windows 7 and even Vista before that.

posted on 24 Nov 2011, 09:32

15. rmkt3 (Posts: 1; Member since: 24 Nov 2011)


Interesting article, the thing is both firms are competitors in the phone arena or market. However Samsung, specializes in several different lines of business. Samsungs corporate strategy is Low Cost Provider while Apples focuses on product differentiation strategies. Samsung´s competitive advantage relies on its low cost production, which has been and is sustainable through time. However, I don´t believe Apple will buy Samsung out. Samsung represents a big % of Korea´s GDP, and have a different corporate cultures. Did you know Samsung produces 80% of microchips? Without Steve Jobs, do you think Apple differentiation strategies are sustainable in time? It might have an excess in Cash, the question is what size of market does Apple has in other categories of business such as a tablets, pc´s, laptops, netbooks, software? compared to other competitors such as Microsoft, it is very low. Samsung and Apple differ in target markets and lines of business, although they compete in some categories. Pardon my english is my second language.

posted on 24 Nov 2011, 09:42

16. Dmann (Posts: 165; Member since: 17 Oct 2011)


Well, according to that graph, we could also have the headline: "Samsung now has the cash to buy the whole cell phone industry save for Apple".

posted on 24 Nov 2011, 09:49 2

19. Victor.H (Posts: 406; Member since: 27 May 2011)


Not exactly - Samsung\'s $78 billion is its enterprise value and you\'re not buying things with enterprise value but with cash. Apple\'s $82 billion - in contrast to all other companies there - represents only its liquid assets, not EV. If we looked at Apple\'s EV, the number would have been much much higher than $82 billion.

posted on 24 Nov 2011, 10:42

22. Dmann (Posts: 165; Member since: 17 Oct 2011)


Got it! That's what happens when one doesn´t read the TITLE (Apple cash vs.....).

My bad.

posted on 24 Nov 2011, 09:45 1

18. Dmann (Posts: 165; Member since: 17 Oct 2011)


PS: I know that Samsung doesn´t have 78b in the bank. That´s why I said according to the graph.

posted on 24 Nov 2011, 14:15 2

37. taco50 (banned) (Posts: 5506; Member since: 08 Oct 2009)


You still don't get it

posted on 24 Nov 2011, 09:49 1

20. lubba (Posts: 1310; Member since: 17 Jan 2011)


You know, I'm actually happy for Apple. They did pave the way for cell/tech era. Don't know how to word it. But for google, I'm with S. Jobs on this one.

posted on 24 Nov 2011, 13:01

30. taco50 (banned) (Posts: 5506; Member since: 08 Oct 2009)


More good news for Apple. A huge chunk of this is going into R&D. I can't wait for the new Apple tv and iPhone 5 or whatever it will be called.

posted on 24 Nov 2011, 13:38

32. wassup (Posts: 565; Member since: 23 Jun 2011)


lol R&D....yeah right....good one!!!
LMFAO!!!!

posted on 24 Nov 2011, 14:14

36. taco50 (banned) (Posts: 5506; Member since: 08 Oct 2009)


Thank Apple for your touchscreen with gestures and app store

posted on 24 Nov 2011, 14:30

39. taz89 (Posts: 2009; Member since: 03 May 2011)


again there was app stores before apple

posted on 24 Nov 2011, 14:47

41. taco50 (banned) (Posts: 5506; Member since: 08 Oct 2009)


There were no manufacturer app stores. They were carrier controlled and they sucked.

posted on 24 Nov 2011, 16:14 1

46. taz89 (Posts: 2009; Member since: 03 May 2011)


nokia had a app store on symbian, and getjar had a store,they were still app stores before apples app store FACT

posted on 24 Nov 2011, 14:25

38. taz89 (Posts: 2009; Member since: 03 May 2011)


so in reality apple dont have the money to buy the whole mobile industry.

posted on 24 Nov 2011, 14:46

40. gallitoking (Posts: 4680; Member since: 17 May 2011)


good day... I was waiting for Snnigly to come up with ways to dispute this.... but.. i guess not... So this proves that Apple does like competition as they could easily buy it except the copy-caters... and imagine 2012.. when a redesign iphone comes out.... ohhh the massacre.... would be inevitable...

posted on 24 Nov 2011, 14:47

42. taco50 (banned) (Posts: 5506; Member since: 08 Oct 2009)


The massacre has already started

posted on 24 Nov 2011, 15:22

44. iamcc (Posts: 1319; Member since: 07 Oct 2011)


Yeah, but it won\'t be the iPhone who ends up on top. They may keep the #1 individual phone sales trophy for awhile but as a whole iOS will lose to Android unless they make changes to how they are doing things.

posted on 24 Nov 2011, 21:00

52. hepresearch (unregistered)


I disagree with you... I do not mind if you decide to disagree with me as well. In my opinion, it is Android that must change some things in order to stay even with iOS. I am hoping that ICS may have already brought that change, and I am looking forward to trying out a Galaxy Nexus just to see for myself. Unless this is accomplished, I have already predicted (for what it is worth...) that 3 out of every 4 handsets in the US will be an iPhone or its Apple-designed successor by 2020. This may also be changed by unforeseen economic factors, but will still favor Apple by profit margin regardless of where sales migrate.

For a while, I imagine that most consumers will either have or have had an iPhone at some point, but after that devices will necessarily become scarce and extremely expensive until only a few people will have them and the rest of the world will lose what they previously had. This is what must almost certainly happen if a severe worldwide economic disaster cannot be averted.

posted on 24 Nov 2011, 21:05 1

53. BattleBrat (Posts: 1038; Member since: 26 Oct 2011)


"The massacre has already started"

Yeah, I know, Apple is losing its grip, its marketshare growth is slowing, rapidly being overtaken by Android. And now look at Samsung's growth, it's INCREDIBLE! Times were Apple's hardware was roughly equal to it's Android equivalents, and most android phones at the time were (let's face it) rubberized plastic bricks. But Android is now bringing the heat, Android's hardware is evolving WAY to rapidly, and Apple's 1 a year policy is no longer going to work, Red apples turned to horse apples (farming term for horse crap) and their OS is getting OLD and BORING, the same apps on the same screens, give me a dozen apple phones and I will show you apps arranged differently with a different background, give me a dozen android phones, and I will show you a dozen different people, with their personalities mirrored through their phones.
Apple needs to start innovating again, I didn't mind they didn't do a cosmetic upgrade to the Iphone, but the lack of 5th gen Itouch?!? UNACCEPTABLE!!, and they didn't do anything to the other MP3 players either, WHAT HAVE THEY BEEN DOING FOR THE LAST 15 MONTHS!?!? It's like they WERE working on that teardrop-Itouch looking Iphone, then Jobs axed it and they threw together the Iphone4s in three months, that's what it looks like to me, Change is coming Taco man, but you aren't going to like it.

posted on 24 Nov 2011, 22:20

54. taco50 (banned) (Posts: 5506; Member since: 08 Oct 2009)


Android has the same layout add some widgets.

Keep hoping, but it's not looking good for android.

posted on 24 Nov 2011, 22:34

55. BattleBrat (Posts: 1038; Member since: 26 Oct 2011)


The numbers don't agree with you, apple may be making money, but they aren't getting the marketshare, they aren't moving the phones, and yeah I know your stupid "Iphone is number 1 handset" tagline, but Android is taking over, the numbers prove it.

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