Apple Acquires Burstly - Analyst Blog

By Zacks Equity Research,

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Apple Inc. ( AAPL ) recently entered into a definitive agreement to acquire Santa Monica-based Burstly. The financial details of the deal, however, were not made pubic. As per TechCrunch, the employees of Burstly have already started working for Apple.

Burstly provides analytics tools for app developers. It allows app developers to make their apps available for testing by outside users. Moreover, developers can access the services provided by Burstly at no additional costs, a feature which makes it more lucrative.

This acquisition indicates that Apple could be in the process of making internal changes to its own app-testing systems and terms of service. Apple's iPhones and iPads require a rich environment of cool new apps for usage. Burstly will help Apple ensure ample supply of properly tested apps for users.

Additionally, we believe that Apple-owned beta-testing may prove to be more robust especially since Apple is preparing for an App/Game store on Apple TV.

In contrast to the acquisitions made by competitors like Facebook ( FB ) and Google ( GOOG ) that involve huge sums of money, Apple has been acquiring smaller companies, usually which have a robust engineering background.

We believe that Apple's intention to extend its foothold into new product categories such as healthcare and cars in the near-term will drive growth and profitability going forward.

Apple's loyal customer base, international expansion, competitive pricing strategy and a solid cash position will aid long-term growth. However, increasing competition from the likes of Google, Hewlett-Packard ( HPQ ) and Microsoft ( MSFT ) in most of its major product segments, possible delays in product launch, higher operating expenses and increasing legal complexities are headwinds.

Currently, Apple has a Zacks Rank #3 (Hold).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Stocks
Referenced Stocks: AAPL , FB , GOOG , HPQ , MSFT

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