When I posed the question last week as to what Apple (Nasdaq: AAPL) should do with the $18.4 billion in cash and investments that sits idle on its books, readers offered varying responses, none of which were boring.
Most of you don't seem to mind the idea of Netflix (Nasdaq: NFLX) or Akamai Technologies (Nasdaq: AKAM) becoming part of Apple. But there were mixed -- and strong -- feelings about the iEmpire combining forces with Sun Microsystems (Nasdaq: JAVA). One reader may as well have called me stupid for suggesting it. Another sent me a written thesis offering a rationale for "SunnyMac" that he had previously shared with friends and colleagues.
Adobe! Adobe! Adobe!
Others liked Nuance (Nasdaq: NUAN), arguing that voice will ultimately emerge as the predominant user interface. Still others favored Nintendo, arguing that it would allow Apple to stiff-arm Microsoft and the Xbox 360 in the ongoing battle over the living room.
One reader even posted his case for IMAX (Nasdaq: IMAX) at our Apple discussion board. So far, Fools don't buy the thesis. Only one of 43 respondents said a deal would make sense.
Who's the best candidate, then? Adobe (Nasdaq: ADBE). Reader Matt Garner best captured the thinking in an email sent last week. Quoting:
Adobe ... Adobe ... Adobe. Apple would own all web development software and PDF creation patents as well as a load of other significant IP and know-how. Flash on the iPhone; not an issue anymore ... Buy Adobe and make an iWeb that someone older than 12 years old would use ... Apple seriously needs to start doing some heavy lifting on the software side and make apps for professionals. Adobe is the way to go.
Reader Mark Reschke, though not quite as bullish on a deal, also sees potential in the combination. Quoting:
If Apple is to place any of their beans into a large basket, I would bank on Apple approaching Adobe. Apple could do this, but the question remains, why hasn't Apple done so already? Creative folk are roughly split down the middle on platform choice. Acquiring Adobe would throw these creative types into the open arms of Apple Stores everywhere, selling them high-end creative systems. Apple could force creatives onto the Mac platform one way or another once acquiring Adobe. The point being, Apple gains the entire world of creatives.
Steve likes the minisampler
"If" might be the most appropriate word in Mark's response. As many on our Apple discussion board point out, the Mac's daddy rarely spends on acquisitions. It's been more than a decade since Apple last announced a blockbuster deal -- a $429 million purchase of NeXT, which returned current CEO Steve Jobs to the company after 11 years in exile.
Asking Apple to spend more than $20 billion to acquire Adobe would, therefore, be groundbreaking. But it would also make strategic sense. Matt has it right. Apple needs to get Flash working on the iPhone; a deal would resolve that. And Adobe's work in making browser-based business software available offline is pioneering, and could further free Mac users from Microsoft's Office suite.
Finally, if we agree that Apple's fate is wrapped in the same cocoon that's been woven by the World Wide Web, then the iEmpire has a vested interest in owning technology that helps business be done digitally. iTunes is certainly that, but so is Flash.
Macdobe? Yeah, it has a nice ring to it, I think.
Take a bite of related Apple Foolishness:
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Vote for Apple as the Stock Madness 2008 champion.
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Hey, Sam, how do you like those apples?
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A GPhone might outdo an iPhone.
