To many startup founders, selling their project successfully to a global company giant like Facebook, Google or Microsoft is the best case scenario. No wonder: being noticed by a board of tech experts, signing a serious contract and finally becoming famous in local and international media definitely serves a good motivation (not to mention a pleasant financial reward!). There is a certain sacrifice to be made, however – users/customers may never find out anything about the initial creator of the technology, who also loses the joy of managing their own company. But to be honest, it is all truly worthy: eventually, big companies contribute to the emergence of the new technologies, providing financial and expert support.
Apple is claimed to have acquired the lowest number of startups among all tech giants since the first days of its existence in 1988. According to Cruncnbase data, the company has only participated in 80 startups acquisition deals, in the meantime Google bought 199 small companies, Microsoft – 182. Slow and steady wins the race: most of the startups acquired by Apple have grown into world famous brands and given us really outstanding technologies. In the last 5 years of being headed by Tim Cook, Apple has been purchasing 15-20 startups every year, which in total equals 60% of all startup acquisitions in Apple history.
Tim Cook explained in one of his interviews that Apple buys startups in order to grow as a leading tech company, not just for perspective profits: this way, Apple realizes new technologies, advances old services and often finds new talented employees.
So what happened to some of the startups after they signed a deal with Apple?
On December 20 in 1996 Apple purchased a company founded by Steve Jobs and widely known as NeXT: being in quite a despair, Apple invested $400 million in the company with 11 years of history to get access to the innovative software successfully developed in NeXT. At the time, Apple badly needed to update the operating system, which is why the company authorities decided to buy a sided tech solution. This is how NeXTSTEP operating system eventually became a base for Mac OS X, which also led to Steve Jobs’ return to the company.
Acquisition of Siri, Inc. took place on April 28 in 2008. The sum of the deal was left undisclosed, but in two years prior to the acquisition Siri, Inc. managed to attract $24 million of total investments. Initially, Siri was an ordinary app for iOS, based on artificial intelligence and allowing its users to dictate text and perform various voice requests. After being purchased by Apple the service quickly became an integral part of the operating system for iPhone and iPad. Now Siri is a personal assistant, processing natural speech, doing small tasks, answering questions and offering recommendations. Thanks to the machine learning technology, Siri studies each user’s preferences and gets adjusted accordingly.
P. A. Semi
Palo Alto Semiconductor (P.A. Semi) used to specialize in manufacturing and sales of electronics. This fabless company was noted for a number of successful deals, including the ones with the US Military Forces.
Apple acquired P.A. Semi on April 23 in 2008 for $278 million. Many analysts were surprised at this deal: why would Apple buy a fabless company that could not even offer the processors suitable for the tech giant. No one believed that Steve Jobs bought P.A. Semi with a view to attract experienced engineers to the Apple team. But it was actually true: later Apple started its own manufacturing of processors for iPhone and iPad.
In 2009, Apple invested $17 million in the music cloud platform Lala.com. The platform users could share playlists, organize streams, download and buy tracks. At the time, Lala.com stored over 8 million songs.
One year after this acquisition deal, iTunes moved to cloud, while track identification system of Lala.com became a base for iTunes’s function “Match”.
After Apple bought Quattro Wireless specializing in mobile marketing in 2010, a new platform iAd for mobile devices was launched. However, in July 2016 the platform was closed. Back in 2010 this deal cost Apple $275 million.
Another expensive purchase: $390 million for the Israeli manufacturer of flash memory Anobit. Why would Apple need Anobit? Two reasons: 1) flash memory controllers are the key components of Apple products (the company controls over 23% of the market); 2) Anobit allowed Apple to grow its storage capacity, improve efficiency and reliability. Besides, the company hired new experienced engineers.
Apple patented unlocking technology associated with the fingerprint sensor back in 2008. In 2012, Apple acquired Australian company AuthenTec Inc. for $356 million, involved in development of the fingerprint recognition technology. Already in 2013, Apple presented Touch ID function, which performs scanning of the fingertip and recognizes the smartphone owner.
At the moment of acquisition, AuthenTec was the only world manufacturer of such scanners, which is why Apple had no competitors in this field for quite a long time.
In July 2013, Apple bought an Israeli developer of 3D-visualisation systems PrimeSense for $345 million. PrimeSense technology allows high-level tracking of human movements via a special sensor. The technology became a core of Kinect sensor applied in game console Xbox and Microsoft.
Apple applied PrimeSense technology in 3D Touch for iPhone.
At the same time, Apple invested around $1 billion in the navigation service HopStop, based on online maps and providing users with the stepped instructions on how to reach the destination using a selected means of transport or by walk. This helped Apple to improve its application “Maps”, which was the company’s weak point for a long time.
In October 2013, startup Cue was acquired by Apple for $50 million. The project presented a personal assistant-organizer for iOS and was obviously used by Apple to enhance Siri.
In May 2014 Apple acquired LuxVue Technology startup, involved in manufacturing of displays with low power consumption. Eventually, Apple invited LuxVue employees to work in their team that works on wearables’ software development.
The biggest acquisition deal in Apple history took place in May 2014, when the company bought Beats Electronics for $3 billion. Beats Electronics became a separate department of Apple. Afterwards, Apple Music appeared.
In April 2015 Apple invested $20 million in Israeli company LinX, which develops cameras for smartphones and tablets. The deal outcomes can be checked already this autumn: rumor has it that the new iPhone will be equipped with two cameras.
You may sign up our monthly newsletter to receive updates or news from our team.