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

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


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50 Comments

1. shy2papa

Posts: 336; Member since: Jan 23, 2010

Nice!!!

60. doubleD

Posts: 78; Member since: Dec 13, 2010

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

62. Lucas777

Posts: 2137; Member since: Jan 06, 2011

obviously they mean in current assets...

2. speckledapple

Posts: 902; Member since: Sep 29, 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.

21. clevername

Posts: 1436; Member since: Jul 11, 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.)

3. som

Posts: 768; Member since: Nov 10, 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.

27. dmn666

Posts: 244; Member since: Oct 19, 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.

28. iamcc

Posts: 1319; Member since: Oct 07, 2011

Good one!

4. Striker

Posts: 92; Member since: Nov 06, 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!

7. goflet

Posts: 50; Member since: Oct 31, 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...

12. andro.

Posts: 1999; Member since: Sep 16, 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

8. anirudhshirsat97

Posts: 408; Member since: May 24, 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?

10. andro.

Posts: 1999; Member since: Sep 16, 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!

14. remixfa

Posts: 14605; Member since: Dec 19, 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.

29. taco50

Posts: 5506; Member since: Oct 08, 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?

34. tedkord

Posts: 17311; Member since: Jun 17, 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.

35. taco50

Posts: 5506; Member since: Oct 08, 2009

To have continued success you need a good product.

58. remixfa

Posts: 14605; Member since: Dec 19, 2008

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

43. iamcc

Posts: 1319; Member since: Oct 07, 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.

45. taco50

Posts: 5506; Member since: Oct 08, 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.

49. andro.

Posts: 1999; Member since: Sep 16, 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

50. taco50

Posts: 5506; Member since: Oct 08, 2009

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

59. remixfa

Posts: 14605; Member since: Dec 19, 2008

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

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

48. andro.

Posts: 1999; Member since: Sep 16, 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

51. taco50

Posts: 5506; Member since: Oct 08, 2009

All these issues only exist in your twisted brain.

56. Pdubb

Posts: 249; Member since: Aug 08, 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.

15. rmkt3

Posts: 1; Member since: Nov 24, 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.

16. Dmann

Posts: 165; Member since: Oct 17, 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".

19. Victor.H

Posts: 1056; Member since: May 27, 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.

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