Apple Is in Trouble and Here's Why

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May 21 (Bloomberg) -- Chamath Palihapitiya, former Facebook Vice President of Growth for Mobile and International, discusses Facebook’s and Google’s acquisition strategies on Bloomberg Television’s “Bloomberg West.” (Source: Bloomberg)

That have been making, does it all make sense?

I think most of it make sense.

Having been there through a handful of them announcing them from the sidelines, what has turned out to be the cheapest and smartest acquisitions done probably by any internet company.

One of the things i did when we left facebook is created growth team at social capital.

We use that within the companies that we invested and help them grow.

But they also help figure out what is growing.

Well we do our own internal projections, it tells us that, by 2016, whatsapp will have more acquisitions than apple and facebook.

You apply some reasonable discount, what apple will be worth is multiples more than -- whatsapp will be worth multiples more than what facebook is paying.

If you as a stalwart company aren't figuring out every day how to get into the next wave, you're going to die.

You don't want to be the company five years later with just a bunch of cash and no ability to innovate.

If you do, yet it like cisco, hp.

There is a whole gaggle of these companies now that don't know what to do.

As a result, your lunch is getting eaten.

We will be speaking with john chambers later this hour.

What about oculus?

That is a head scratch her.

-- head scratcher.

Is it worth $2 billion?

I have no idea.

Doesn't matter when you're talking about a nominal amount of dilution?

Again, if he could be the next platform, at least facebook as it.

If not, it is a reasonably measurable right off and they can keep going.

How long will facebook remain the dominant network 10 years?

-- for the next 10 years.

I think that is locked in.

Within whatsapp, you will see everything from transaction, payments come a lot things right now that you see in places like china and japan that will get brought over to the rest of the world.

There will be this massive platform that enables it all.

I will keep facebook relevant for another decade.

What about snapchat?

It is a largely teen oriented product in the united states.

Google is buying a lot of robot companies.

It is competing with facebook and try to connect the world in different ways.

I think google's proposition is very different.

It said we are going to organize all the world's information.

They realize that some point along the way that information is getting generated in all of these other places and let's go untracked and on the locket.

So when you buy that, you are buying that your unlocking information around the home.

Google glass?

The point is they realize that the world's information is no longer trapped on webpages on the internet.

Information exists everywhere.

So their job is to use all of the cash from search to go and basically get them into the information business everywhere else.

It is an amazing business.

What about apple?

I think they are screwed.

I think these guys have lost largely their mojo.

If you see the speech transaction, for me, it is a head scratcher.

You are buying a hardware business, low-margin, doesn't make any sense.

Some people said that they are trying to buy to compete with beat music.

Why not buy the number one for three times as much than buying another for $3 billion.

It does not compute for me.

What if they come out with a larger phone or a smart watch?

I think it is more of the same.

The reality is that the success of companies like netflix, spotify, things are moving to the cloud.

Content is moving to a place where it is available all the time everywhere.

And these devices are getting cheaper and they are becoming more abstracted.

They are becoming more available.

So being in that business is a race to the bottom.

So you have to find a way to go upstream.

Use the balance sheet to buy the winners and software.

By dropbox.

By spotify.

By netflix.

Those are winning strategies.

Much more with you coming up.

Stay with us.

Also, a quick programming note

This text has been automatically generated. It may not be 100% accurate.


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