There are obvious strategic reasons Apple might want to become more acquisitive. The company is moving beyond its traditional base in personal computers and charging into smartphones and mobile computing. As mobile computing takes shape, Apple, Google, Nokia, and other traditional tech titans have become more active in searching for startups that can help them with the new terrain. In Apple's case, it has a war chest of $23 billion in cash and short-term securities to pursue acquisitions. "Their [business] model is evolving, and you can expect them to broaden their horizons," says Bill Whyman, an analyst with International Strategy & Investment.
Many experts believe Apple still won't be making any huge deals—the multibillion-dollar, headline-grabbing transactions other companies specialize in. Whyman says Apple has been an "organic grower" and will likely keep its acquisitions small. Rich Geruson, a former Nokia executive who sits on the boards of seven startups, says big companies like Google often wait to acquire a startup in an emerging field until they see which one is the most dominant. But that's not Apple. "The pattern I've seen with Apple is that they buy very, very small companies," he says.
Burrows is a senior writer for Bloomberg BusinessWeek, based in San Francisco.
