Here’s an idea: let’s cut Apple in half. Sure, the company is the most profitable on the planet and grabs more headlines than the U.S. President. The trouble, according to some on Wall Street, is Apple isn’t acquiring and selling enough to earn financial wizards hefty commission checks.
The thinking behind this notion being floated on Wall Street is that Apple could become even more valuable than its current $346 billion if the tech giant split its Mac hardware business and its iOS/iCloud offerings into two units. Motorola did something similar, splitting its hardware and cell phone businesses. Google recently acquired Motorola Mobility, the unit that has created so many Android-based smartphones.
Unlike Motorola and others that have split off units, Apple is almost averse to acquisitions. Indeed, over the past decade, the Cupertino, Calif. firm has spent just $1 billion on acquisitions, averaging 15 times less than its rivals. The key is acquisitions. Wall Street money managers only get paid when they assist companies splitting up or acquiring others. In other words, Apple has been great for consumers and small investors, but not much of a gravy train for big-time Wall Streeters.
While such a split-up would never happen when its co-founder also held the CEO reigns, the possibility is given more life under Tim Cook. UBS analyst Maynard Um suggested Apple could also buy back shares, something “generally more of a possibility with management change.”