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Apple’s software acquisitions: If you want something done properly…

By Eliot Hochberg (eliot@high-mountain.com), July 16, 2002

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I finally get it – Apple is done depending on third parties for software that works.

Apple announced that it has acquired Emagic, a company that makes music recording and editing software for anyone from the dedicated hobbyist to the professional recording engineer. Its main product, Logic, competes with Steinberg’s Cubase, a possibly more familiar name in the segment.

So what may be the significance of this purchase? Well, looking at past acquisitions, thus far Apple has been pretty focused on professional video editing and production tools. Emagic makes an audio tool that professionals use to edit music (and possibly other audio content) for film and TV, as well as professional music recording.

On the surface, this may seem like an obvious jag into a field directly related to video and film editing, and in the end this may be the case. But there are some interesting points worth noting. The main one is that, as of now, it appears that none of the major audio recording companies have updated their software to OS X, which probably makes a lot of sense – Apple hasn’t finalized its audio and MIDI protocols, so why would they? Perhaps Apple is tired of waiting, or maybe it wants to show the industry how music software integration is done. Is Apple scared that these companies won’t port their music software over to OS X, so it’s covering its bases? Another point worth noting is that most recording engineers are very loyal to the product they use, so it’s unlikely that Apple would steal upgrade sales from the competition. It may hook users new to recording, but it will likely only retain the seasoned pros who already use Logic. Finally, note that in the press release, Apple states that the Windows version will stop being sold by September of this year.

So what does this new acquisition tell us that might help predict what Apple will do next? So far, Apple has video editing (Final Cut Pro), compositing (Silicon Grail, Nothing Real), compression (Spruce Technologies), titling (Prismo Graphics), tracking (Cinema Tools) and now sound editing software.

What’s missing? First off, there’s 3D design software. So far Apple hasn’t purchased a 3D software modeling/rendering company. There is no burning need from an OS X availability standpoint, since many of the top products are already available for OS X. If Apple simply wants to make sure that the necessary software is available to do professional work in OS X, then it won’t buy a 3D software company. However, if it wants to make sure that software is always available, then it will buy a 3D company anyway, just to make sure it has the necessary product. My prediction is that Apple would purchase either Electric Image (Electric Image) or Newtek (Lightwave 3D), two successful but smaller companies.

So is there any other area Apple is likely to buy into? Well, that depends on why Apple is buying. If it’s simply to insure that there is a full suite of products available for pro video production under Mac OS X, then Apple may already be where it wants to be. But considering what Apple has done in the consumer space, my belief is that it will expand further into pro markets. Thus, I expect purchases in any or all of the following areas:

These are just a sample of creative areas that Apple could get into, although they seem the most likely to me. If you are a forward-looking investment type, it’s worth noting that most of Apple’s acquisitions seem to come from countries other than the U.S. That may be just a coincidence, but then again, maybe not. Also, Apple seems to be acquiring small- to medium-sized companies in key niches but seeking to develop better working relationships with the bigger fish like Adobe and Macromedia who have products in many key areas. Big niche companies like Discreet and Avid appear to be left out in the cold.

In any case, it’s clear that Apple is trying to become a source of professional software for its system. It will be interesting to see where Apple goes next.

Footnote:

Anyone remember Play Inc., the makers of the Trinity and Amorphium? In researching this article, an interesting piece of info turned up. This is old news now, but it’s worth noting that the company at MWSF 1999 with a booth that didn’t sell any Mac products, but sold live, real-time compositing and 3D hardware is now out of business. Or is it? Apparently, around the time when Play seemed to shut its doors, a new company, Play Streaming Media Group, was formed. it acquired GlobalStreams in February of 2001, then changed its name to GlobalStreams. You can read all about it at the Web site, and the press release.

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