Apple tipped to buy Netflix as streaming war gets serious

Posted January 03, 2018

"The firm has too much cash - almost $US250 billion - growing at $US50 billion a year".

Merchant and Suva said to the clients that Apple has "too much cash - almost $250 billion - growing at $50 billion a year".

Apple has more free cash than it knows what to do with, and buying Netflix would be a way for it to offload more than $250 billion in newly-repatriated earnings it's been holding overseas. Apple wants to get benefited from this by using its $252 billion cash stored in foreign jurisdiction. "With over 90% of its cash sitting overseas, a one-time 10% repatriation tax would give Apple $220 billion for M&A or buybacks". Suva and Merchant also offer up Disney (25 percent possibility), Tesla (5 percent) and gaming companies Activision, Electronic Arts and Take-Two Interactive (all 10 percent) as potential spending targets for Apple's corporate tax break.

The undisputed king of streaming video-on-demand, Netflix is likely an attractive fruit for any company with deep enough pockets.

If Apple were to buy Netflix it could spark a tech giant arms race, with the likes of Amazon and Google both looking for ways to shore up Amazon Prime Video and YouTube repetitively to fend off any extra competition Netflix can levy with Apple's help and the iOS ecosystem.

Apple tipped to buy Netflix as streaming war gets serious

Now, it is undeniable that Netflix essentially rules the booming industry of video streaming services, and the rising number of cord-cutters in the past few years is indicative of how Netflix will certainly be a major player in this arena moving forward.

"Netflix is miles ahead in terms of programming hours, original content quality and time spent, and we don't expect this to change". Apple's very deep pockets should also mean that it can afford to foot the bill for more awesome Netflix shows like "Stranger Things".

Could there be another acquisition that could shake Hollywood as much as the historic Disney-Fox deal did?

Although iTunes has been a huge hit for Apple, viewers reportedly have migrated increasingly to services like Netflix, Amazon or Hulu to watch their favourite shows, leaving the iPhone-maker struggling to come up with a convincing TV or movie offering.

In August, a report said that Apple was planning to spend approximately $1 billion to create its own streaming content for customers. The boost in original content will result in a $2 billion saving in licensing fees, the analyst said.

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