Apple CEO Cook explains how Apple obtains innovative new features for the iPhone

Apple CEO Cook explains how Apple obtains innovative new features for the iPhone
For those who say that Apple should be using its vast wealth to buy other companies and perhaps bring some new innovations to its products (like, say, the iPhone), CEO Tim Cook has an answer. The executive told CNBC that Apple buys a company every two to three weeks on average. He said that over the last six months, the tech giant has picked up 20 to 25 new firms.

Apple's MO has always been to purchase small companies under the radar. The largest transaction Apple made to date was its $3 billion purchase of Beats Audio back in 2014. A more typical purchase was Apple's $356 million acquisition of biometric security firm AuthenTec back in 2012. That led to the debut of the Touch ID fingerprint scanner on the iPhone 5s in 2013. Back in 2010, Apple purchased Siri; at the time, the firm offered a limited personal assistant app in the App Store. The next year, the iPhone 4s launched with Siri on board. In 2015, Apple acquired Israeli imaging company LinX for a reported $20 million helping Apple step up the iPhone's camera game.

So you get the idea. As Cook told the CNBC audience, Apple is "primarily looking for talent and intellectual property." And with more than $225 billion in the vault, it seems that the company has thrived without shelling out for huge acquisitions. However, struggling iPhone sales have confirmed that Apple made a smart business move to focus on its Services unit. The large installed base of iPhone users is an enticing target for subscription-based services like Apple Music, Apple News+, Apple TV+ and the upcoming Apple Arcade. With that in mind, some analysts have been calling for Apple to use its riches to purchase a major entertainment firm like Disney.


The idea that Apple would spend over $240 billion to buy Disney seems laughable in light of Apple's M&A strategy. But there is a history between the two companies that can be traced back to a single man, the late Steve Jobs. After Jobs was dismissed from Apple by John Sculley (ironically Jobs' handpicked choice to run the firm), he invested money in Pixar and became its chairman and eventually CEO. When Disney bought Pixar in 2006 in an all-stock transaction, it made Jobs the largest Disney stockholder with 7% control.

Rumored acquisition targets for Apple include Disney, Tesla, and Netflix


Other big companies rumored to be potential targets for Apple include Netflix. This is another rumor based on the idea that it is cheaper for Apple to buy content than develop it. And perhaps due to the media making comparisons between Steve Jobs and Tesla co-founder and CEO Elon Musk, a hookup between Apple and Tesla has also been the subject of speculation.


Apple has a pretty quick timetable for turning acquisitions into new features and services. Take the 2018 purchase of Texture, bought for an undisclosed price. The app, called "the Netflix of magazine publishing," allowed subscribers to read digitized versions of magazines for a monthly subscription fee. No sooner did Apple gobble up the company than rumors started circulating that it would use Texture in a redesigned News app that would offer monthly subscriptions. And sure enough, this past March Apple announced the News+ service.

Keeping acquisitions small has worked for Apple over the years. And by focusing on these niche firms, Apple can pick up the patents and the talent behind the creation of new innovations for its devices. And since these deals are on the small side, Apple does not have to alert the competition to what it is doing by making a splash in the Wall Street Journal.

FEATURED VIDEO

35 Comments

1. Dr.Phil

Posts: 2488; Member since: Feb 14, 2011

I would say this is typical of a company like Apple or even Google (which if you recall purchased companies like Motorola for the patents years ago). Samsung and other hardware manufacturers like Huawei tend to have their innovations come from within the company without needing to buy out another, although there have been exceptions. And I should mention that I’m not saying one is preferable to another, but rather that each company has their own way about doing things.

22. TheOracle1

Posts: 2340; Member since: May 04, 2015

You're right Dr.Phil. Nothing unusual there. But how do you explain the laziness of Apple in purchasing the iPad name from Fujitsu? Couldn't they brainstorm and come up with a name by themselves? Couldn't the "genius" Steve Jobs dig into his creative "genius" and figure something out? Nah, innovation is creative and Apple are nowhere near that these days and clearly haven't been for a long time.

2. MrMalignance

Posts: 332; Member since: Feb 17, 2013

Wow...I've never seen you work so hard to build up apple. Alan apple indeed. Just like every other company, they develop, but also steal. Innovation has hit a speed bump, so theft is rampant. As for apples mo, that's how they've always been. Jobs loved to buy small firms or bully them into selling. I just hope Tim is nicer when buying companies

11. lyndon420

Posts: 6897; Member since: Jul 11, 2012

Buy companies, or steal developer's ideas and then ban their apps that have been on the app store for a few years over violations that didn't exist before lol.

18. IT-Engineer

Posts: 580; Member since: Feb 26, 2015

Yeah they did that a lot, all the way back since iOS 5

24. iloveapps

Posts: 909; Member since: Mar 21, 2019

Envy of app store because your play store is 99% junks and spams.

40. MrMalignance

Posts: 332; Member since: Feb 17, 2013

2nd reply, since phone arena censored me again: @iloveapps: you apparently know nothing of the play store. The apple store and play store both have issues. You really shouldn't make up facts. Try researching whatever it is you want to say, before you say it

3. JRPG_Guy

Posts: 150; Member since: Jan 13, 2019

What innovative features?

4. oldskool50 unregistered

I agree. Mostly out of sarcasm though. Everyone innovates at some point. Innovations also include improving on things others have done. The only thing is Apple rarely does anything in-house. Most of Apple innovations are what is included in the components they buy from other outfits. Apple has never invented anything from scratch. No one is even copying Apple innovations. Most OEM's are already in the mist of doing things, Apple rushes to be first at. and it goes the other way to, but far less often. Apple is a good cook. No pun intended on Tim. They know how to shop get and put together a good product overall. But that isn't good enough anymore and they have been very behind for so long. When you are actually innovative, you never sit and rest on your laurels. Every company that has done that like Microsoft, Nokia, Intel, Sony and so many others have fallen off the map. If Apple doesn't want to end up like IBM or Sega; they need to wake up.

6. apple-rulz

Posts: 2198; Member since: Dec 27, 2016

List what Samsung has created from scratch.

7. Plutonium239

Posts: 1249; Member since: Mar 17, 2015

The bendable display used in the galaxy fold and the special adhesive that it uses.

9. apple-rulz

Posts: 2198; Member since: Dec 27, 2016

Nope, developed by Xerox back in the 1970’s. NEXT!!!!!!

12. lyndon420

Posts: 6897; Member since: Jul 11, 2012

They had mobile phones long before apple did... that's a start.

13. ShadowSnypa786

Posts: 626; Member since: Jan 06, 2017

1. In August 1999, Samsung released the SPH-M2100 in South Korea. While it was essentially a phone and an MP3 player melded together into a single device, the fact remains that it was the first phone ever to support MP3 playback. 2. The Samsung Craft SCH-r900 became the world’s first LTE-enabled phone when it landed in late 2010. 3. Samsung Guru E1107 was the first phone ever to use solar power. 4. The Galaxy Beam which was the 1st phone with a projector built in. 5. Eye-tracking used in the Galaxy S4. 6. 1st phone with a heart rate monitor. 7. Multi-window Multi-tasking which appeared on the Galaxy S4 which something Iphones to this day can't do. 8. Gear VR 9. Curved display PHONE 10. Stylus in smartphone. 11. Samsung coined the term "Phablet" with their Note series. 12. Their superior Amoled technology. 13. Galaxy A9 was world's 1st quad camera phone. And if this is anything to go by then it be the 1st company to put front camera behind the display cos to be honest who else is going to do it? Apple?? :D https://www.gsmarena.com/samsung_is_working_on_an_underdisplay_camera_solution_aiming_for_the_coveted_alldisplay_phone_design-news-36895.php

14. apple-rulz

Posts: 2198; Member since: Dec 27, 2016

This is too easy, first Samsung didn’t invent the LTE phone, Ericsson is the first handheld to use LTE. MP3 was invented in Europe, Germany if memory serves me correct, so all Samsung did was take existing, emphasis on EXISTING, tech and use it. Still waiting for what Samsung created from scratch. Oh and the rest of your list was so ridiculous, it’s not even worth addressing, but I will if you want.

15. ShadowSnypa786

Posts: 626; Member since: Jan 06, 2017

No Ericcson didnt it was Samsung https://en.wikipedia.org/wiki/LTE_(telecommunication) In October 2009, Ericsson and Samsung demonstrated interoperability between the first ever commercial LTE device and the live network in Stockholm, Sweden The LTE services were launched by major North American carriers as well, with the Samsung SCH-r900 being the world's first LTE Mobile phone starting on September 21, 2010 and Samsung Galaxy Indulge being the world's first LTE smartphone starting on February 10, 2011. But I like how you provided no proof so yeah go for it address the rest :D Thanks that list alone I gave you is more than Apple has done to this day. Enjoy dissecting it apart ;)

16. apple-rulz

Posts: 2198; Member since: Dec 27, 2016

Yeahhhhhh....so where exactly did Samsung start from scratch with LTE? Oh and my post is number 6, reread it, it’s clear you didn’t understand my question.

17. lyndon420

Posts: 6897; Member since: Jul 11, 2012

The first time I heard the term phablet was when describing the Dell Streak 5...pretty sure it was the first 5" screen on a phone.

19. TBomb

Posts: 1671; Member since: Dec 28, 2012

Regarding the battle of wits going on: You all seem to be forgetting that Samsung has more than just consumer electronics. This gives a nice overview of Samsung through the years.https://www.youtube.com/watch?v=6Afpey7Eldo

27. oldskool50 unregistered

I'm in such tears right now. You destroyed that loser. I almost cut him some slack and was about to tell him, well Apple did invent FireWire or the standard IEEE-1394 standard. But then I would have to bust his bubble and remind him, Apple didn't create that standard alone.

42. Menageryl

Posts: 20; Member since: Apr 25, 2019

Er, no. Samsung was a long, LONG way from first to put a stylus in a phone. That happened almost a decade earlier with Ericsson, followed 18 months later by Sony-Ericsson. Long before the word iPhone existed and back when smartphones were used almost solely by nerds and geeks. :-)

26. oldskool50 unregistered

I've never said Samsung invented anything, but they surely make plenty of products from scratch. Apple only designs a CPU. Someone else has to fabricate them. Samsung does both. Apple only has an OS, which they didn't invent. It is made of up several OS'. Samsung also has a NIX based operating system. Samsung has factories that not only make products, they assemble them too. How many does Apple have? Apple makes all the money in the world, because they don't have the overhead a true OEM does. And so what. Apple chose a different business model. Apple did with hardware, what Microsoft did with software. They made the biggest of their money off how they started. And both got into the game on the other side. Microsoft now makes hardware other than Mice and Keyboards. Apple now has applications. Both Apple and Microsoft uses 3rd parties to make stuff. Samsung does too. But most of its stuff is made by them. So yeah, Samsung makes a lot of stuff from scratch including the World Tallest Building. There are some thing in the world that have more value than money. Most times it's what you do with it. Apple decided to take the money and build a spaceship that doesn't fly. While Samsung built the world tallest building. Oh and every part of that building was made from scratch. Apple only designed their headquarters. Someone else built it. Samsung designed and built the Khalifa. And Samsung also designs and builds their own building too. And their factories and more. Apple? But you don't have to make a product from scratch to have a good product. But it helps.

39. apple-rulz

Posts: 2198; Member since: Dec 27, 2016

"I've never said Samsung invented anything, but they surely make plenty of products from scratch.". Name me a Samung product made from scratch that has zero outside input.

44. GalaxyLeads_iCrapFollows

Posts: 216; Member since: Nov 29, 2017

About everything that Apple has is Samsung tech

10. jjface

Posts: 260; Member since: Jun 07, 2017

the notch

5. Valdomero

Posts: 704; Member since: Nov 13, 2012

One thing they're really good at is making their commercials. Oh and blaming the customers on using bad their products LoL.

8. Xxtoxicskittlexx

Posts: 193; Member since: Jun 11, 2018

**Apple CEO Cook explains how Apple never innovatives the iPhone** There.... I corrected it for you.

25. iloveapps

Posts: 909; Member since: Mar 21, 2019

Yeah because Samsung is so innovative that Fold is coming with a plastic cheap removable film screen for a $2000 and forget that a debris can be get inside to it. Awesome ideas just like curved screen and Bixby.

32. ShadowSnypa786

Posts: 626; Member since: Jan 06, 2017

More innovative than any Iphone in the last 5-7 years even with all the FOLD issues :D Thats facts. Go read reviews people are loving the folding screen concept its the next big thing. Samsung and Huawei are the big players who test it till its safe for Apple to jump in and they will probably buy all the hardware needed from Samsung or BOE.

45. GalaxyLeads_iCrapFollows

Posts: 216; Member since: Nov 29, 2017

Watch, despite the Fold issue, Apple will come begging Samsung to help them make the screen for the upcoming foldable iphone. Apple also knows BOE is low quality chinese crap that is far inferior to Samsung so Apple like usual will rely on Samsung for their screen.

Latest Stories

This copy is for your personal, non-commercial use only. You can order presentation-ready copies for distribution to your colleagues, clients or customers at https://www.parsintl.com/phonearena or use the Reprints & Permissions tool that appears at the bottom of each web page. Visit https://www.parsintl.com/ for samples and additional information.
FCC OKs Cingular's purchase of AT&T Wireless