In order to expand its technical expertise, Apple Inc. (NASDAQ:AAPL) continues to take the acquisition route. Reportedly, the company has purchased SnappyLabs, the maker of a popular photography application, SnappyCam for an undisclosed amount.
SnappyCam specializes in adding functions to smartphone cameras. Worth $1, the application helps smartphone users to simplify and accelerate the process of taking pictures through the built-in camera. The app enables the smartphone camera to keep on taking photos continuously as long as the on screen shutter-button is pressed.
The acquisition will give Apple Inc. (NASDAQ:AAPL) the opportunity to enhance the camera feature of its smartphone. The company is facing significant competition in most of the markets from handset makers who are using Google Inc (NASDAQ:GOOG)’s Android operating system. Most of these devices carry cameras, which have features much better than Apple’s iPhone.
In such a scenario, the enhanced camera feature will not only boost user experience but will also justify the premium pricing of the product.
Apple Inc. (NASDAQ:AAPL) makes small but strategic acquisitions that provide it with specific technology or products. Over the last 12 months, the company has acquired a number of companies from diversified fields that include social media data generator, data compressor technology provider, map software developer, personal assistant app provider, low energy chip maker and 3-D sensor developer.
In December the company acquired Topsy Labs, which tracks Twitter Inc (NYSE:TWTR)’s tweets. We believe that Apple Inc. (NASDAQ:AAPL)’s strong balance sheet will allow it to pursue strategic acquisitions to bolster its product portfolio. Moreover, its recent deal with China Mobile Ltd. (ADR) (NYSE:CHL) is expected to boost top-line going forward.
However, falling gross margins and lack of innovation are expected to remain the primary headwinds in the near term.
Currently, Apple Inc. (NASDAQ:AAPL) has a Zacks Rank #2 (Buy).
Disclaimer: This article is written by Zacks Equity Research and originally published at Zacks.com.