Apple’s Most Expensive Acquistions

appleApple’s acquisition of Beats for $3 billion dollars marks the most expensive purchase made by the computer manufacturer, however it is not the first costly trade made by the company. During their creation and popularization, co-founder Steve Jobs was controversially removed from his position. While away from the company, Jobs created another computer company named NeXT. NeXT was headquartered in Redwood City, California. Their primary goal was to develop, build, and distribute computer workstations for business markets and higher education. In 1988 the company introduced its first NeXT computer. The computers experienced low sales, with estimates of 50,000 units shipped in total. However, its object-oriented operating system (NeXTSTEP) influenced later computer models from Apple.

NeXT, despite not selling as many units as their competitors, popularized the use of Graphical User Interfaces (GUIs) and object-oriented programming. So popular in fact that Apple attempted to emulate their former owner’s creation with the Taligent project in 1989, and Microsoft did the same with its Cairo project in 1991. Jobs strove to make changes in the work environment for the company, wating to create a more communal environment for his employees. They were even given full transparency to payroll. On December 20, 1996, Apple purchased NeXT for $429 million and 1.5 million shares of stock and accepted Jobs back to the company.

NeXT, although being the first, was not the most expensive acquisition by Apple. PrimeSense was an Israeli 3D sensory production company based in Tel Aviv with offices in Japan, Singapore, China, Taiwan, Korea, Israel, and North America. PrimeSense is most notable for developing the technology for Apple’s rival, Microsoft: specifically, the sensor chip utilized in the Xbox 360 Kinect. Apple acquired the company for $350 million.

AuthenTec was a computer security, biometrics, identity management, semiconductor, and touch control technology company based in Melbourne, Florida. The company provided mobile security software licenses and biometrics sensor technology to mobile manufacturers. They developed NFC technology and fingerprint sensors. The company was founded after deviating from the Harris Semiconductor Corporation. On July 27, 2012, Apple acquired AuthenTec for $356 million.

Most recently Apple acquired Beats Electronics for $3 billion dollars, Apple’s most expensive acquisition to date. Beats Electronics, based in Santa Monica, California, is a producer of audio equipment and products. The company was founded by successful hip-hop producer and rapper Andre Young (aka “Dr. Dre”) and Jimmy Iovine (Interscope-Geffen-A&M Records chairman). Prior to Apple, the company was owned by Taiwanese smartphone manufacturer HTC. In 2012, HTC reduced its stake to 25 percent, subsequently making the Carlyle Group the majority shareholder (along with the original founders). The company is most famous for its headphones and speakers.

The $3 billion acquisition is set to close at the end of 2014. If the deal closes, Andre Young will be the first billionaire in the history of the hip-hop industry. The majority of the sale will be paid in cash, and the remaining $400 million will be represented by Apple stock. Apple’s CEO, Tim Cook, stated that he and his company love music and continue to invest in it. Aside from supplying Beats’ products in retail, the company has not revealed any other plans to on how Apples most expensive acquisition will be integrated into the company.

By Andres Loubriel


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