Pulse Check Update: Apple Gets Acquisitive
Apple (AAPL) made a couple of dents in its massive cash hoard with two small but strategically significant acquisitions. The company finally confirmed that it bought superfast chip designer Intrinsity and today reportedly picked up voice recognition specialist Siri.
With the need to supply ultra-fast chips for its mobile devices, the Intrinsity deal leads Apple another step closer to designing more of its own high-performing chips in-house.
After the launch of the iPad, technology bloggers and analysts noted that the device was extremely fast compared to previous Apple products. They also found a chip named the A4 inside the iPad and industry insiders suspect the speedy new chip’s design was a combined effort between Intrinsity and Apple.
According to Tom R. Halfhill, a chip analyst for Microprocessor Report, Apple may have paid around $121 million for Intrinsity, the small Austin-based firm.
“The purchase price is like pocket change to Apple, and they get a lot of benefit,” said Halfhill. Intrinsity has also been working with a division of South Korea’s Samsung Electronics, the same division that manufactured the fast A4 chip, according to Chipworks, a firm that reverse-engineers and analyzes technology products. (NYTimes)
Will Strauss, an analyst with Forward Concepts, said one of Apple’s main objectives is to keep its competitors away from these fast-performing lower powered chips. ”The acquisition is both to improve Apple’s product line and to deprive potential competitors of Intrinsity’s’ intellectual property.” said Strauss, who expects Intrinsity-designed chips to be in future iPhone models and in other Apple products.
Strauss and other industry analysts say that Apple’s move is a sign that it has lost faith in P.A. Semi, a California chip design startup that Apple bought in 2008 for $278 million. Several of P.A. Semi’s top executives have since left Apple. (AmericanStatesman)
Siri, based in San Jose, makes a “personal assistant” app for the iPhone: people ask it questions or type them in and it searches for information on that subject.
Apple hasn’t made any statements about what it’s going to do with Siri, but the answer seems obvious, writes Gizmodo’s John Herrman: “They’re getting into search. Voice search, to be exact. And in competitive terms, they’re catching up with—and possible even shutting out—one of their biggest competitors.”
Speaking of Google, “considering that Apple may still have a Google Maps replacement in the wings, it certainly seems as if the company is making more of an effort to separate itself from Google, though both Apple and Google publicly insist that their relationship is still strong,” adds Jacqui Cheng at Ars Technica.
And in the view of Silicaon Alley Insider’s Dan Frommer Siri “represents what we think one form of effective search will look like on mobile platforms: It takes a request from you and brings back actual results.”
In other Apple-related developments, the notorious “lost iPhone” incident may lead to an earlier launch of the iPhone 4G, that’s according to Piper Jaffray analyst Gene Munster. Munster said the prototype leak may cause current sales of iPhone to go down as customers hold off for the newer model. (QuickPWN)
Just last night, Apple CEO Steve Jobs confirmed his attendance to be the opening speaker of Wall Street Journal’s All Things Digital conference, and Dan Frommer thinks it’s likely that Jobs will unveil the new iPhone 4G at the June 7th event.
Apple will also be aggressively opening up its iconic stores in cities around the globe as the company targets consumer markets in China and in Europe.
With 286 stores worldwide, the company plans to open another 40-50 new stores this fiscal year and over half of the new openings will be outside of the U.S. Apple expects to have about 25 stores in China by the end of 2011, said the firm’s CFO Peter Oppenheimer. ”About half the Macs sold in our stores during the March quarter were to customers who have never owned a Mac before,” he added.
Needham & Company analyst Charlie Wolf wrote in a note released Wednesday that Apple’s stores continue to play a pivotal role in attracting Microsoft (MSFT) Windows users to the Mac. Needham estimates that, since 2004, more than 18 million Windows users have switched to a Mac computer.
“Mac sales in the March quarter were almost four times higher than they were in the second quarter of fiscal 2004,” wrote Wolf. Windows switchers have more than doubled the size of the Mac installed base, he added. The customer services offered through the “genius bars” located in Apple stores have also helped woo Windows users onto Macs, according to Wolf. (TheStreet)
This post was based on Company Searches of Alacra Pulse for the companies mentioned.
See Also: Alacra Pulse Prognosis: Apple, Inc Price Targets and Pulse Check: Surging Sales Boost Apple and its Suppliers
Sheena Lee
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