More than 25 years ago, Telecom Italia SpA executives offered to buy Apple
Fast forward to today and Apple is valued at over three trillion dollars. The iPhone remains the biggest consumer product in the world while the Apple Watch is the biggest-selling timepiece in the world. And Telecom Italia is no longer riding high as it was when it offered to buy Apple. The Italian phone company has a crushing debt load of over 30 billion euros ($32 billion) and outside of its Italian phone business, its only foreign holding is of Brazil’s third-largest phone company.
Telecom Italia SpA is divesting itself of its landline network
When Telecom Italia met with Jobs, it employed 120,000 people, a number that has since been cut to 40,000. And now, with its debt out of control, the company is being forced to divest itself of its domestic landline network which would make it the first telecom firm in Europe to do so. Ironically, considering Telecom Italia’s interest in a company that was as American as “Apple” pie, a U.S. firm is believed to be interested in what the Italian telecom firm is selling.
Telecom Italia SpA will have to make a deal to remain competitive
One thing that we can be sure of, the company making the deal with Telecom Italia will not be Apple. The amazing thing about the fortunes of the two companies shows how product-driven success can quickly turn things around. Telecom Italia had no debt and a value of over $100 billion when it approached Apple; the latter’s valuation was $5 billion at the time. Jobs turned down the deal.
You never know what the next big product will be and it’s to the credit of Apple that it has run off quite a string of amazing hit products that not only catapulted Apple to new financial heights and captured the imagination of the public, but also negatively impacted firms like Telecom Italia SpA that were involved with older technology.
