Although Apple Inc. (Nasdaq: AAPL) has not yet officially announced its acquisition of Anobit Ltd., and assuming there is no last-minute surprise in the details, the acquisition can be considered as a disappointment. Outwardly at least, Anobit had the right DNA to achieve the vision that has been the talk of Israel's high-tech industry for years - to become a really great company.
Ostensibly, Anobit had it all: experienced managers, big money, a rapidly growing field, supportive investors, outstanding technology, and computing giants waiting in line with open arms and checkbooks to integrate the company's products in their computers. Taking all this into account, an exit at $300-400 million, or even $500 million, is small change.
The possibility of setting up a flash memory knowledge center that will employ thousands of Israelis and have hundreds of millions in annual sales was on the agenda. But Anobit chose another road.
The sale to Apple can help consolidate a thriving development center that will contribute to the Israeli economy and high-tech industry, but it will not supply a large local company. A possible future acquisition could have been made at a 10-digit figure.
It is hard to pass judgment on the company's managers or to know exactly what their considerations were. It seems that Anobit realized that its future in developing flash memory for the enterprise storage market was going to be harder than it expected.
Gartner Group estimates the market flash memory Genesis Solid State Drives (SSD) for servers and storage systems at $1 billion in 2010, and projects it to grow to $4.5 billion by 2013. This market estimate has been boosted by the rapid adoption of switching to cloud computing. Anobit saw the enterprise SSD market as its primary growth engine and its executives spoke in this vein for a long time. When you are supplying sought-after flash memory systems that cost tens or even hundreds of thousands of dollars per unit, the sky's the limit. But something apparently went wrong, in which case the sale to Apple seems more honorable than hoping for the optimal result.
Published by Globes [online], Israel business news - www.globes-online.com - on December 20, 2011
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