Embark, another August purchase, is also a slam dunk. The company makes apps for public transit users in major cities. It’s an obvious boost to Apple’s own Maps app, joining two other location-based companies the company bought in July: Locationary and Hopstop. AAPL has been relentlessly improving Maps as it works to take on Google Maps, and that means bringing in outside technology and expertise to bolster the effort.
Matcha, a media discovery app the company bought in August could also be related to the existing Apple TV or an Apple television — the app is based on video recommendation, after all. But speculation is that AAPL might have been after its recommendation algorithm (which performs very well) for use with iTunes in general. With millions of songs, apps, movies, TV shows and books being offered through iTunes, finding content has become laborious, and system-generated recommendations are a great way to spur sales.
And then there’s Topsy, the most recent of the Apple acquisitions.
One of the more interesting theories I’ve read about the Topsy acquisition is from Peer Index’s Azeem Azhar, who suggests that Apple bought the company for the purpose of building its own search engine to compete with Google Search. This may sound far-fetched, but AAPL has tackled core Google service before — remember Maps?
Apple has a long standing grudge against Google, dating back to late CEO Steve Jobs’ threat to unleash ‘thermonuclear war’ on the search giant over its use of Android to copy Apple’s move into smartphones. How better to hurt a company that still gets something like 94% of its revenue from displaying ads than to attack its search business?
I don’t know that current CEO Tim Cook is as intensely focused on revenge, but having its own search capability could benefit AAPL stock by directing some of those Google ad dollars its way.
Of course, we won’t know for certain what Apple is doing with any of the companies its bought until the next Siri or Touch ID is released. But Tim Cook is under pressure from everyone from customers to Apple’s own board of directors to speed up the pace of innovation and release something new. Buying technology and know-how is one way to accelerate product development, and Apple’s pace of acquisitions suggests the company is preparing to deliver in a big way in 2014.
As of this writing, Brad Moon did not hold a position in any of the aforementioned securities.