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Apple’s cash enough to buy mobile rivals
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Apple could buy the majority of its rivals in the mobile phone space using its cash pile, which is forecast to hit USD70bn by the end of the quarter, according to a new report by Asymco. The research firm claims that the sum of Apple’s liquid assets is higher than the combined enterprise value of Nokia, RIM, HTC and Motorola Mobility, which together account for around three-quarters of the world’s mobile phone sales. The sum of the four firms is estimated to be USD66bn, while report author, Horace Dediu, estimates the mobile subsidiaries of LG and Sony Ericsson to be worth USD10bn and USD3bn respectively. Dediu attributes the “spectacular” and “predictable” falling value of struggling firms Nokia and RIM as a key factor in the mismatch of wealth. The stats are indicative of the continuing shift of power in the global mobile space as high-end smartphones such as Apple’s iPhone and devices running on Google’s Android OS continue to gain mass adoption.
However, Apple could not afford to buy Samsung as well, which Dediu estimates is worth USD53bn. Research by Nomura earlier this month claims that Samsung will usurp Nokia this quarter to become the world’s largest smartphone manufacturer but Dediu asserts that as many of the manufacturers continue to decline in value, the continuing popularity of Apple’s high-end device portfolio, which also includes the iPad tablet and iPod range, will ensure that its cash pile continues to rise, adding that “a time may soon come when Apple’s cash will be worth more than the entire phone industry”.
The iPhone is considered one of the major factors behind the firm’s success in recent years, and the device has turned Apple into a force in the lucrative smartphone space. Apple sold some 18.65m iPhones during the latest quarter, outselling its Mac PC offering four-to-one. The iPhone’s software, iOS, is currently second behind market leader Android as the top smartphone OS in the US, having recently surpassed RIM, according to comScore, while it continues to climb the manufacturers chart in the country, comprising 8.3% of the market, though it still sits behind LG, Motorola and Samsung. Dediu’s research echoes a separate Asymco study with Timetric earlier this year that claims that Apple accounted for 51% of all mobile phone profits in Q4 2010, despite holding just a 4.2% share of the market, further proof of the iPhone’s importance to the firm.
