Originally written : Tuesday, January 18, 2011 at 9:17pm
In light of the recent news in Apple (AAPL), that being Steve Jobs’s health issues and the future dynamic of the company after his departure. Below is a thesis of why now more than ever is the time for Apple to make a “cross market meshing if not societal morphing”, acquisition so to speak. One with a pretty visible revenue stream to come. One that is in the “societal sweet spot” going forward. Apple should BUY Visa Inc (V) on that premise!
If Apple buys Visa, it is foot in door to CHINA. Get in there where ya can. Daily transactions for a Billion PLUS people. I’ll take it!
When I think of Apples success over the last decade. I am reminded of what I’ve studied about RCA (Radio Corporation of America) And the societal and market implementations and implications it had in its time. A time that was in a technological infancy of the great things to come. Most at the time were saying “it (RCA) was going to take over the WORLD!” It was in existence from 1919 to 1986. In 1930, the U.S. Department of Justice filed antitrust charges against RCA, General Electric and Westinghouse (That is so crazy considering the US Navy and GE set up and spun off RCA many years earlier) As a result, GE and Westinghouse had to give up their ownership interests in RCA. RCA was allowed to keep the radio factories, and GE and Westinghouse were allowed to compete in that business only after 30 months passed. RCA) was Wall Street’s and Main Streets “best gal” high-flying tech-stock of the Roaring 1920s. It made many investors and speculators millionaires. It was in essence a monopoly on “wireless communications for the masses.” And not a serious competitor was anywhere in sight at the time.
In the five years before the Crash of 1929, RCA stock soared from about $11 to its September 1929 high of $114 (adjusted for the 5:1 stock split in Feb of that fatal year). That’s an appreciation of 935% in only five years! That equates to an annual compound return of a monumental 60%! Also it never paid a cash dividend. Market players didn’t care, because the stock value increased almost on a daily basis. At its 1929 peak RCA boasted an astronomical PE ratio of 72:1. <span>From 1929 and the stocks top of $114, over the next three years the stock price dropped to less than $3 (-97%) per share in 1932.
Apple in my opinion needs to start making smart acquisitions that will replace a plateau in R&D that is coming. And for sure a plateau of it’s market and social life altering and market impactful release into society/world. And margin contraction issues to come. And poss Anti Trust issues as well. I also feel it’s the same reasons they should also buy a flash component. Or a major school textbook publisher for it’s already in place licensing and “jumped hurdles” into the future education of the worlds children (lets start in USA) for schooling being done at home via the web and your device. And w/ VISA it is alllllllllllll about the cashless society going forward. BUT NOW IS THE TIME TO STRIKE/make the move. It’s good for the broad market and our USA economy as well. Timing is everything….for Apple is now treading water! And that is dangerous for shareholders who are not getting a div at least. Maybe a hologram related company also. Maybe even a cellular provider or satellite company. Take that out of future margin contraction equation. If Apple were to buy Visa Inc. It would be like a EBay owning a Pay Pal.
And can Apple afford to do this? Damnnnn skippy they can afford it! A little cash and a little stock. And a stock split in
AAPL the same day they announce deal to merge/acquire VISA. Apple then can take a shot at becoming the worlds first TRILLION DOLLAR market cap company. I am telling ya….it’s the “deal of the deals” for Apple and it’s shareholders right now. It also stifles anti trust talk cause they will be more so than ever to big to mess with!
And before I go on, I wanna add this: To most around the Globe (and maybe beyond someday…ya really never know with explosive exponential technology growth) > The Visa brand/ logo equates to universal payment acceptance!
The cashless society thesis is coming on strong. That can not be denied or argued. It is for a multitude or reasons this will be an imminent action and transition by our Federal Government. Me personally feel that the orderly functionality of society depends on it. By taking CASH/paper currency out of American and World societies circulation/and people’s daily use. All transactions would be done with a Debit/ID card or via your HAND HELD DEVICE!
Microsoft Surface is exciting here with restaurant table tops and cashless payment and food ordering and social interaction. While say dining on a date and exchanging pics on surface of virtual table top. You can order right from the menu on the table (without even seeing a waiter/waitress…bye bye a couple 100k more jobs) By going to a cashless society would generate a “digital paper trail” per se. To have a FLAT TAX, Consumption TAX, Usage FEE, (or whatever ya terminology ya wanna” lipstick” it with) levied on the goods & services accordingly and automatically. One that is not hindered by political boundaries (ie the different States of the nation and countries of the world) Not to mention the micro managing and real time demand statics/data that could come from this move (I wrote a peice about doing away w/ The National Census on the same basis). And the necessary instantaneous adjustments demographically in needed.
This will in essence be the Coup de Grace’ of the CASH/Underground Economy. These are the individuals and businesses that operate and live their lives on a cash basis, to avoid paying any taxes at all. At first we will see an upsurge/uprise of the barter system for those who will continue to fight it so to speak.
By taking CASH out of society and going to a debit card/device paying culture, would stuff the IRS coffers like we’ve never seen or thought possible!
There’s a reason why the singer Madonna has had hit songs in the last three decades. Because she constantly adapts and changes herself and her music to suit the times and the masses.
“Nothing great was ever achieved by someone NOT taking a risk along the way”
“Our statements must be judged by candid readers who are intelligent enough to lay our words alongside life as they are able to observe it. If our word and their observation agree, the case is made. It is perfectly silly to begin to damn us before it has been shown that our statements are baseless or reckless.”~ Henry Ford
The iPhone as VISA card – Apple 2.0 – Fortune Tech
Not content to take your money, now Apple reportedly wants to be your money!
Posted by Philip Elmer-DeWitt
January 25, 2011 7:08 AM
The Apple (AAPL) buzz Tuesday morning was all about a Bloomberg report — based
apparently on a single source — that the company is following Google’s (GOOG)
lead and building NFC (near-field communication) technology into its
next-generation iPhones and iPads.
“Apple plans to take NFC Mainstream,” begins MG Siegler’s headine in TechCrunch.
“Perhaps The Greatest Trick They’ve Ever Pulled?”
If Apple can successfully tie NFC technology — which lets you exchange money
and data wirelessly from up to 4 inches away — to the 160 million iTunes
accounts the company has on file, it could be huge, Siegler argues. By revising
iTunes to allow accounts to be credited or dinged directly, Apple could avoid
all those credit card fees and maybe get its hands on a slice of the $6.2
trillion Americans spend each year on goods and services.
“It could change everything,” Siegler writes. “It could transform Apple from the
biggest technology company in the world, to the biggest company in the world,
period. By far.”
We’re not entirely convinced.
We’ve been carrying a NFC-chip-equipped VISA card in our wallet for years. We tried to use it a few times to buy stuff at a discount pharmacy in New York City. One time it worked. The other times the check-out clerk rolled her eyes and asked me to just swipe the damn card.
Click here for a list of the 14 handsets already equipped with NFC technology
and the 33 countries currently conducting NFC trials.
•Google to power your mobile wallet