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What Apple's 2013 Shopping Spree Tells Us


The purchases made this year weren't really about mapping.

Halloween held tricks and treats for some companies this year. On October 31, the so-called consortium "Rockstar" -- which includes Microsoft (NASDAQ:MSFT), Apple (NASDAQ:AAPL), Sony (NYSE:SNE), Ericsson (NASDAQ:ERIC), and BlackBerry (NASDAQ:BBRY) -- filed a lawsuit against Android manufacturers including Samsung (OTCMKTS:SSNLF) and Google (NASDAQ:GOOG). That very day, Strategy Analytics also reported the Android operating system had a whopping 81% market share in Q3 2013. In the wake of such revelations, investors are left to wonder exactly what strategies Apple will turn to in order to stay competitive.

During the Q&A portion of Apple's fourth quarter earnings call last week, CEO Tim Cook indicated the company indeed has some tricks up its sleeve, stating that "we obviously believe that we can use our skills in building other great products that are in categories that represent areas where we do not participate today."

One such category may be wearable tech, and specifically smart watches. Apple has yet to confirm that it is making an iWatch, though recent reports that LG Display Co Ltd (NYSE:LPL) is in negotiations to supply LCD panels for such a device, combined with Apple's recent hiring of Angela Ahrendt to lead retail appear to give credibility to the rumors that the product could launch in 2014. (Interestingly, former Wall Street Journal reporter and tech insider Jessica E.Lessin pointed out that Ahrendt is a "watch lady," having launched a high-end watch line for Burberry (OTCMKTS:BBRYF) while at the company.)

There's also speculation about what the future holds for Apple TV. Though the company did release its new iMovie Theater channel in October, and acquired (whose service includes detailing all content available online and on TV) there aren't strong signals that TV is a key area of Apple's immediate focus.

But based on Apple's recent regulatory filing, there's a clear focus on forward momentum: Capital spending, which was $7 billion for the 2013 fiscal year (not including research and development costs) is projected to reach $11 billion for the fiscal year ending September 2014. Perhaps Apple is as focused on keeping pace with its competitors as it is with innovation. Its acquisition activity in the past year seems to prove the point.

Take for example, mapping, a technology with which Apple has notoriously struggled (remember CEO Tim Cook's open letter to consumers) despite its access to robust cloud-based data that it should be able to harness for accuracy and leverage for innovation.
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