The world hasn’t recovered completely from the economic slump caused by the pandemic. The resulting issues affect everyone differently and wealthy people and corporations are better insulated from the economic downturn. For instance, well-to-do customers
are still splurging on luxury goods from Louis Vuitton, Christian Dior, Fendi, Gucci, Yves Saint Laurent, Ferrari, and Mercedes-Benz, whereas McDonald’s and Walmart customers have curtailed spending.
The luxury sector may still take a hit though and the bottom line is everyone is bound to feel the pinch at some point. Smartphone sales have shrunk but Apple and Samsung seem to be bucking the trend
, at least in some regions, and Apple
has high hopes for the iPhone 14 family
. The company has slammed the brakes on acquisitions.
From one takeover every three to four weeks to just two major acquisitions in 2022
reports that Apple has dramatically slowed the pace of acquisitions in the last two years. The company only
spent $33 million on dealmaking in its last fiscal year and $169 million in the first nine months of 2022, down from $1.5 billion in the fiscal year 2020.
Apple keeps an eye on promising start-ups and past purchases have helped it launch popular features such as the Siri voice assistant and the Face ID biometric tech. Chief Executive Officer Tim Cook revealed in February 2021 that the company had bought 100 companies in the prior six years, meaning more than one every month.
In 2021, the Cupertino giant’s only known takeover was of the streaming service Primephonic and in 2022, it made only two known acquisitions: Credit Kudos, which makes tech for calculating credit scores, and AI Music, which produces tailor-made audio. The figures don’t include money spent on Apple TV+ content.
So, why has Apple cut back on purchases?
After Apple reported its third-quarter earnings results
, the company said it would be “deliberate” with spending decisions. Although Apple reported better financial results than Wall Street had estimated, it only narrowly beat projections. Apple may also slow down hiring
in 2023 because of the economic downturn.
That doesn’t necessarily mean that Apple is not buying as many companies as before because it doesn’t have as much money as before. As of last quarter, it had $179 billion in cash. Apparently, the company has decided to use the cash for stock buybacks and dividends for now.
Apple probably also wants to steer clear of regulatory trouble. Apple notes in its last year’s annual report that buying other companies is harder now. The government is also after Apple because of its App Store practices
That’s not to say that Apple is closed to the idea and Tim Cook said in April that the company is “always looking.”
Apple is far from the only one curtailing spending in the face of the global economic slowdown. Google has also slowed down hiring and Samsung has scaled down smartphone production.