The Worst Acquisitions Apple Ever Made

The Worst Acquisitions Apple Ever Made

KYLE RUSSELL OCT. 11, 2013, 9:34 PM 12,091

Under Steve Jobs, Apple bought the company that was undercutting them with Mac clones. Over the years, some of Apple’s biggest successes have been the end result of the company acquiring another with promise and integrating their technologies with its own in a way that provides real value to users. Mac OS X and iOS are the result of the purchase of NeXT in 1997. iTunes, which truly set the iPod apart from its competitors, came from the purchase of SoundJam MP in 2000. Of course, not all of Apple’s purchases have worked out so well. Some of the technologies Apple has bought never made it to market and others just didn’t seem to fit in with Apple’s other products.Under Steve Jobs, Apple bought a company that was undercutting Mac sales with its clones.

Apple gave Power Computing Corporation a license to make Mac clones in 1995 in the hopes that Apple could transition to a business model closer to Microsoft’s, which was poised to have a major hit with Windows 95.

When Steve Jobs came back to the company in 1997, he realized that it was simply too late to beat Microsoft at what had become its game and that Mac clones were doing more harm than good by undercutting its own high-margin Macs.

That year, it bought Power Computing Corp. for $100 million and shuttered the Mac clone business, an embarrassing but necessary move.

Apple waited until IBM had 80% of business user market share before buying a company that let its computers network with IBM machines.

Apple bought Orion Network Systems in 1988 in an effort to make buying an Apple computer at a business that already used lots of IBM PCs less of a hassle.

By that time, IBM had already captured 80% of the market, leaving Apple with roughly 6%.

Even with software that made networking easier, there were too many other reasons not to get an Apple: price, other software incompatibilities, and and the difficulty of training workers who had never used a computer in their life to learn a second operating system.

Apple bought a graphics chip maker before it had even brought the product to market.

When Apple acquired Raycer Graphics in 1999, it also hired Bob Mansfield, their vice president of engineering.

While Raycer’s technology may not have been very important for Apple — the company used industry standard graphics chips from ATI and nVidia in later computers — the acquisition is still seen as a success by many because of Mansfield’s later work.

Bob Mansfield went on to lead Mac Hardware Engineering through the release of some of the best-selling computers in the company’s history and later became Senior Vice President of Technologies, a role he has since stepped down from to work on special projects.

Apple bought a student information system for K-12 students in 2001.

The purchase of PowerSchool for $62 million in shares seems like a very strange decision for Apple to make back in 2001.

Sure, the company has always tried to have a presence in schools via programs like student and teacher discounts, but PowerSchool’s software for keeping track of grades and assignments was essentially enterprise software for a niche market — not exactly Apple’s style.

That disconnect from Apple’s other products and services is a likely reason for why they sold the software to Pearson Education in 2006 for an undisclosed sum.

Apple bought a mapping company three years before it released Apple Maps.

When Apple bought Placebase in 2009, some speculated that it would use the company’s technology to replace Google’s backend from the iPhone’s Maps app.

Three years later, Apple unveiled iOS 6 and Apple Maps to less than stellar reviews (to say the least). A lot of the maps were just plain wrong — and the release made Google Maps look awesome.

While many of Apple Map’s problems stemmed from data Apple brought in from other sources, many thought that three years of development should have resulted in a better final release.

In 2000, Apple bought a company that blocked kids from going on sites other than those approved by a panel of teachers and librarians.

NetSelector differed from other filters by not attempting to blacklist all of the inappropriate sites on the web.

Instead, it had a panel of teachers and librarians select sites that were acceptable for children and made only those available.

Of course, the number of sites that could be educational for children is essentially endless. As a result, most found the software more limiting than useful and most schools instead instituted school-wide traditional filters.

Nevertheless, Apple bought NetSelector after two years of including its software on iMacs and iBooks.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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