having followed both companies for sometime.. I can't help but wonder why Apple doesn't just buy MU... let is stand alone as a subsidiary.. for $8B.. nothing for Apple with $140B sitting around... they can lock up a major supply of memory... allows them to further distance themselves from Samsung... it's a major purchase...but it's a supply chain thing.. right in Cook's wheelhouse.... any thoughts... Apple can let the people that know this type of stuff run the company... just another division in the company...
Sentiment: Strong Buy
thanks for the input.. it seems other posters also think this far fetched idea is a good idea in concept i.e. Apple having memory production in-house.. has it has done with A5/6 chip design... it cuts out the middle man.. yes it is a stretch.. but it cuts out Samsung... as a company.. what would Apple be willing to pay to shake lose of back stabbing Samsung? if all it would take is $11B to acquire MU.. and turn it into a subsidiary.. memory research under the same roof as chip design... software and design teams 2nd to none.. wow.. what won't this company be able to do when it comes to technology?... $140B cash.. what's $11B to lock up that future? we'll see... Apple will need to shake off Samsung somehow...
Because Apple has a long, bad relationship with Micron. Apple was Micron's sole corporate customer until May, 1986 when Micron got a contract from Sun. (I used to use the second production-line manufactured Mac Apple gave Micron as a gift.) In other words, there would have never been a Micron for long without Apple. Micron then sold defective parts to both companies, founded Micron Computer, aggressively sought to gain other corporate contracts while increasing prices to Apple and distanced the relationship. Apple has never had a good relationship with Micron since, and even sourced other DRAM producers since (one little producer was Samsung), because the company has a major distrust of Micron.
What Apple could do instead is buy new equipment at current low prices and set up shop. It would be able to outcompete other memory producers who can't afford rapid transitions due to low cash and have a lot of obsolete tools depreciating. As far as a barrier to entry, there really is not much there as the memory industry has flattened in the past decade. Talent would also most likely be attracted to work for a success, rather than a failure living on an old story. I do believe that this scenario is for more likely as memory is more of a commodity today than ever.
You have some history here, so I understand where you are coming from, however, wouldn't you agree that this was a very, very long time ago - especially in tech years. And with Steve J no longer here, I doubt that's an issues today. Besides theres much less risk if MU were under Apple's wing than being at-risk, potentially getting burned, buy a third-party supplier that you little to no control over (in reality) other than to threaten to pull your business from them (an obvious big stick).
Appreciate everyone's input, thoughts and speculation. So refreshing to have respectful dialog with everyone.
I've heard crazier ideas. While unlikely, it does have merit. Assuming the E deal is finalized they both could benefit from:
1) having strategic supply chain partnership
2) help each other reduce overhead, streamline operations and improve distribution within a few years (mostly helps MU)
3) help each other improve margins on what they have
4) improve MU's R&D and provide more expertise on the software side, this creating more bundled HW/SW solution
5) help develop cloud based solutions long-term
6) pull through other business for MU that's complementary to their key focus areas
Those were just a few quick thoughts off the top of my head.
While most will dismiss all this And it may not be probable - nothing is impossible.
Love Apple products and especially their service. Long MU.
Fun to speculate.
It is not a far fetched idea. I think the memory market would have to show signs of tightness and pricing power for suppliers for Apple to consider it. Samsung had proven it pays to have your own memory supplier. Elpida fabs need to be intergrated first to increase supply capacity. But right now Apple has there way with the memory suppliers and their gross margins are around 80%. If that changes to Micron's favor and shows signs of staying there, Micron shares will be around $12 and it would take $15-17 to buy out which is 15-17$ billion. Micron would not sell the company at $8.
Bull: About that item 5) help develop cloud based solutions long-term.....I've often wondered how that type of thing will fair when internet bandwidth by the ISP's begins to be metered? 'Cause you know it's'a comin' in the next few years.....