Will Apple, Inc. Embrace a Conglomerate Strategy?

On May 8, news broke that Apple (NASDAQ: AAPL  ) is in the late stages of negotiations to acquire Dr. Dre and Jimmy Iovine's Beats Electronics for $3.2 billion. The news was quite a surprise to investors. Not only is $3.2 billion eight times the price of Apple's largest acquisition to date, but this is also the first time the company has acquired such a well-known brand. Even more, Bloomberg is reporting that Apple plans to keep the brand around after the acquisition.

As Fool technology specialist Daniel Sparks explains in the video below, such a move could signal that Apple is opening up to a broader conglomerate strategy. With the Street concerned with Apple's slowing revenue and net income growth, buying into new business opportunities could help Apple address this problem.

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  • Report this Comment On May 18, 2014, at 2:57 PM, GaryDMN wrote:

    I think you have them confused with Google. Apple is focused on consumer electronics, products, software, services and content. Google on the other hand is an advertising company, that wants to span several industries, that include fiber carrier networks, robots and consumer electronics. Apple makes money on every consumer product it offers. Google makes money on advertising.

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Daniel Sparks

Daniel is a senior technology specialist at The Motley Fool. To get the inside scoop on his coverage of technology companies, follow him on Twitter.

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