Will Apple Spend $28 Billion on Acquisitions?

As Steve Jobs exits, Apple (NASDAQ:AAPL) may change its unofficial policy on acquisitions, of which the company has made far fewer than any of its biggest competitors.

Though it has the highest market capitalization of any technology company in the world, Apple has spent less than a billion dollars on takeovers in the past decade, while unveiling new and revolutionary products like the iPod, iPhone, and iPad. Meanwhile, its biggest rivals have spent over $15 billion each, on average, to buy companies over the same time period. Microsoft (NASDAQ:MSFT) spent ten times what Apple spent in acquisitions in the last ten years, while losing a fifth of its value.

The company has $28 billion in cash, now left at the discretion of new CEO Tim Cook. While under Jobs, Apple “always grew from within,” according to Arvind Malhotra, an associate professor at the University of North Carolina at Chapel Hill’s Kenan-Flagler Business School, “If lack of his vision and availability of his position causes the future pipeline not to be there, that’s when the acquisition model comes into play. They’re sitting on a cash pile.” Malhotra has studied and taught Apple’s business strategies for a decade.

Apple is constantly flirting with being the biggest company in the world by market capitalization, and again today passed Exxon Mobil (NYSE:XOM) to take the top spot with $351 billion to Exxon’s $349 billion. The nation’s 10 largest technology companies, in terms of market cap, spent over $140 billion on acquisitions in the past 10 years, of which Apple accounted for less than 1%, spending only $910 on takeovers as it increased in value by more than $300 billion. In that time, Microsoft spent $12 billion on acquisitions, not including the still pending $8.5 billion agreement to buy Skype Technologies SA, while its market cap fell 21%.

But while Apple has been at the forefront of technological development since Steve Jobs returned to a failing company in 1997 and turned it around with the first iPod, it still faces competition, especially when it comes to smartphones. While the Apple iPhone is the world’s most popular smartphone, its mobile operating system, iOS, comes in second to Google’s (NASDAQ:GOOG) Android OS, which was on nearly half of all phones shipped in the world this year. And while the market share of the iPhone has remained fairly steady over the last couple years, Android’s market share has more than quadrupled since 2010. In order to compete without Jobs’ vision, Apple may have to spend more on acquiring products and ideas rather than relying exclusively on developing its own.

But Howard Ward, who oversees $36.1 billion at Gamco Investors, says The last thing they want to do right now is make it appear as if [they are] changing their stripes with Steve resigning as CEO.” Ward says that, with Steve staying on as chairman of the board, he will still have influence over the company and be able to contribute ideas toward its development.