Apple headquarters in Cupertino, Calif.
Don't build it. Buy it.
That simple credo serves Google well, having led to numerous hit products, from AdSense to software stars like Google Earth, Maps and Docs.
Now Apple may follow suit.
Even as the tech world waits in anticipation of the expected introduction of its tablet on Wednesday, Steve Jobs and company are quietly shopping for ways to strengthen Apple's softer side — that is, its software. A hefty stock price and a growing cash reserve of $23 billion has put Apple in prime position to acquire some winners.
It could surely use them. Even as Apple succeeds with a streak of hot hardware — the iPod, iPhone and iMac — the company's consumer software has failed to keep pace with the evolution of cloud computing. Both iWeb and iPhoto have lagged behind competitors' photo- and Web-editing tools: iWeb is struggling to win over novice bloggers, while iPhoto lacks many of the capabilities that are now standard for Web-based photo-editing and storage services.
"Apple is failing at moving to the Web/cloud," says Sachin Agarwal, who spent six years at Apple before founding Posterous, a Web service that simplifies and streamlines tasks such as blogging and posting to social networks. "MobileMe [Apple's service that syncs e-mail, contacts and calendar events] has not succeeded here, and they are in a vicious cycle, since that makes it hard to recruit smart Web developers."
Apple has already begun moving its office suite, iWork, to the Web, but without online-editing capabilities. And with Apple's recent acquisition of the streaming music service Lala, iTunes may finally be more Webified, if not quite as social as Last.fm or Pandora.
After iTunes, iPhoto is the iLife software tool that would benefit most from a move to the Web. Numerous Web-based photo-editing and storage tools already offer simpler and more flexible ways to fix, share and store photos online.
One sleek photo-editing site, Picnik, has 17 million monthly users who have uploaded a billion photos since the Seattle start-up launched just over two years ago. Its easy-to-use interface would align well with Apple's emphasis on design and simplicity.
"With Apple in particular, I can think of nine ways to Sunday that we would add tremendous lift to their overall strategy," says a hopeful Jonathan Sposato, Picnik's founder and CEO.
Apple could also look to buy a blogging upstart like Tumblr or Posterous. Both are so easy to use that they make iWeb's instructions feel like a calculus textbook. Posterous lets anyone create and add to a blog by e-mail — you can post pictures, audio and videos just by adding attachments. When asked if he could envision partnering with his former employer at some point, Posterous founder Agarwal says, "I think Apple would be a great acquirer for Posterous."
Peter Misek, technology analyst for Canaccord Adams, a financial-consulting firm, says Apple may have its hand forced by impatient investors who don't want to see their money lying around unused. "If the cash pile continues to grow," says Misek, "there will be investors who ask, What are you doing with our cash?"
Misek sees potential for acquisitions that speed the online delivery of software and services. "That's an area they're very keen on," he says. "If you look at where their gaps are and where the competition is going to come from, it's going to be from social aspects of software or social networking. If you're moving and adding content via iPods and iPhones, software has to enable the editing of it. We have a generational change in wireless usage, an inflection point, and they have to be well-positioned for that."