The Billion Dollar Question: Who Will Apple (AAPL) Buy?

At its earnings conference call last week, Apple (Nasdaq: AAPL) CEO Steve Jobs was asked point blank what the company will do with its $51 billion cash hoard. Not sidestepping the question, but not getting very specific, Jobs indicated the company would use the cash for "strategic opportunities" that present themselves in the future.

As would be expected, the comments from Mr. Jobs set off a wave of speculation about who Apple will buy.

One name that keeps coming up is Facebook. But with a value topping $30 billion, it would seem highly unlikely that Apple, which has never paid more than $500 million in a buyout, would be comfortable making a move this large. The same thing with Disney (NYSE: DIS), which, while Jobs sits on the board, has a market cap of $68 billion.

The FT.com had a nice run-down of some companies that seem more likely for Apple to buy:

• Rovi (Nasdaq: ROVI) - Apple already has a partnership with the provider of digital TV technology. "Apple could easily buy the company, or one of its competitors, outright," the FT contends. ROVI has a current market cap of approx. $5 billion.
  
  
• Adobe Systems (Nasdaq: ADBE) - While Jobs declared war on Adobe over Flash and won't support in on new iPhone and iPads products, Jobs & Co. could seek control of the company to optimize the "buggy" technology for Apple devices. ADBE has a current market cap of approx. $14 billion.
  
  
• Akamai (Nasdaq: AKAM) - could give Apple a boost in technology for steaming content. AKAM as a market cap of $8.8 billion.
  
  
• ARM Holdings (Nasdaq: ARMH) - which has the licensee Apple uses for its chips has been a long-rumored takeover target of Apple.
  
  
• Nvidia (Nasdaq: NVDA) - the maker of graphic chips could be a likely takeover target for Apple, say private investors and analysts. NVDA has a market cap of $6.8 billion.

While Apple has a large and growing cash hoard to make acquisitions from, it also has a stock which is valuable currency and carries a $283 billion market cap. Apple could effectively pursue stock-for-stock deals to avoid using its cash hoard.

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