The New York Times has published a “rumor” that Apple (NASDAQ: AAPL) may make a strategic investment in Twitter. How that would help Apple, which has seen an erosion in the market share of its flagship iPhone is hard to see. Twitter’s membership is estimated at over two hundred millions. The short burst blog operation has had a problem similar to Faceboook’s (NASDAQ: FB), but even more severe. It has not been able to find a way to drive large sums of revenue from its user base.
The Times reports,
While Apple has been hugely successful in selling phones and tablets, it has little traction in social networking, which has become a major engine of activity on the Web and on mobile devices. Social media are increasingly influencing how people spend their time and money — an important consideration for Apple, which also sells applications, games, music and movies.
It would seem that Apple would be buying a piece of what it could have for a much lower price if it set up tactical relationships with Twitter, Facebook and LinkedIn (NYSE: LNKD)–large purchases of sponsorship and advertising. An Apple investment in Twitter probably would cut off close relationships with the other large social networks,which has a great deal to be said against it.
Apple’s true problem is that it has allowed Samsung to move ahead of it with 4G enabled products with features similar to the iPhone and iPad. Apple can only hope to solve that with a new generation of products–one which it has to hope will sell very well
Douglas A. McIntyre