“‘We are always looking at acquisitions,’ Apple Inc. Chief Executive Officer Tim Cook told analysts last month. ‘There’s not a size that we would not do,'” Alex Webb and Alex Sherman report for Bloomberg. “But Apple has struggled for years to pull off bigger deals because of a series of quirks: an aversion to risk, reluctance to work with external advisers like investment banks and inexperience in closing and integrating large takeovers, said people who have worked on acquisitions with the company.”
“Some analysts and investors argue for a big acquisition, especially in online video streaming. Apple has started distributing videos through the Music service, and pooling other providers’ video in its mobile TV app, but it has no service akin to Netflix or Amazon.com Inc.’s Prime Video,” Webb and Sherman report. “On Friday, Sanford C. Bernstein analyst Toni Sacconaghi said Apple needs at least one big acquisition in online video. To reach its $50 billion target, the company must find an extra $13 billion in services revenue over the next four years — beyond what it can generate itself. Netflix Inc. ended 2016 with sales of less than $9 billion, so even buying that business may not be enough, the analyst said. Other potential blockbuster Apple acquisition targets include Walt Disney Co. and electric carmaker Tesla Inc., Baird analyst William Power wrote in a recent note to clients.”
“The presidency of Donald Trump may spark tax reforms that free up more Apple cash to spend on takeovers. But so far, the company has tip-toed around the edges of some of the biggest transactions re-shaping the technology industry,” Webb and Sherman report. “‘There’s a swagger — you may call it arrogance — about the culture there,’ said Risley of Architect Partners. ‘They’re used to being able to muscle their way in and get attractive economics.'”
Read more in the full article here.
MacDailyNews Take: As as we wrote last May:
What is unique about Netflix? A handful of TV series are not worth $40 billion. Apple is perfectly capable of taking on Netflix without having to buy them, deal with integrating their employees, etc.
Until Apple actually buys Netflix, we’ll keep saying that Apple will buy Netflix for the same reason they bought Palm.
Now, Disney, for example, would be a much different story, as it teems with synergies for Apple Music, iTunes Store, iBooks Store, App Store, Apple TV, etc.
That said, there have been a number of smaller deals that Apple blew for whatever reason regarding specific content properties that could have made Apple TV quite a different proposition than it is today, including NFL Thursday Night Football streaming exclusivity and/or The Grand Tour, to name just two would-be game changers.
With the amount of money Apple has, even wildly overpaying for the right content in order to maximize the install base for things like Apple TV might prove to be a smart move over the long run.
SEE ALSO:Apple’s Eddy Cue alienated cable providers and networks with an assertive negotiating style – report – July 28, 2016
Apple hires Amazon’s Fire TV head to run Apple TV business – February 8, 2017
Why Apple should buy Disney – January 26, 2017
Apple’s new TV app shows just how painfully behind Apple is – December 14, 2016
Apple approached Time Warner about possible merger before AT&T talks – October 21, 2016
Apple’s Eddy Cue: Nope, we don’t want to be Netflix – October 20, 2016
Google signs up CBS for planned web TV service to debut in early 2017; close to deal with 21st Century Fox – October 20, 2016
Bernstein: Apple buying Netflix would be a waste of $50 billion – October 5, 2016
A chance for an Apple buyout offer as Netflix stumbles – July 19, 2016
Here comes á la carte programming – without Apple – July 13, 2016
Should Apple absorb Netflix? – July 11, 2016
Apple to buy Netflix? – May 27, 2016
Should Apple buy Netflix for $53 billion? – May 10, 2016
Apple declines to place bid on NFL Thursday Night Football – March 3, 2016
Why Apple should buy Netflix – January 7, 2016
Apple TV 4 is a beta product and, if you bought one, you’re an unpaid beta tester – November 5, 2015
Apple made ‘audacious bid’ for Top Gear trio of Clarkson, Hammond and May, but lost out to Bezos’ Amazon – September 1, 2015
Why Apple should buy Netflix – April 21, 2015
Why Apple should buy Netflix – March 26, 2014
Jim Cramer: Apple should buy Twitter or Netflix to spur growth – February 7, 2013
The Netflix buyout battle: Apple vs. Time Warner – April 10, 2012
So far, APPLE seems to be doing just fine without buying everything in sight. I say keep the cash horde. Let it grow to a trillion dollars!
They can probably create most anything they want so no great need to buy it.
Unless there is some unique IP they need for development or legal protection, I don’t see the need to be buying.
A lot of this pressure to buy other big companies comes from the wall street boys and girls. The same crowd that screamed for APPLE to lower their prices so they could capture more market share.
With the exception of a few items, like the Mac Pro, in my opinion APPLE is doing great.
I second that
I second that as well, but what do we get? Planet of the Apps? Not exactly the work of a 700 billion dollar company. Not one with a clue, anyway. Definitely one with a Cue.
Remember the ecosystem stupid…?
Don’t build new roads when the old ones are falling apart from neglect.
The most important objective for Apple is to maintain and refine the integrity and functionality of its current ecosystem. People are already complaining about Apple’s shortcomings in Mac development and various aspects of the OS and applications, as well as iPhones, iPads, iOS, etc. The effort required to make a major acquisition and integrate that company with Apple would just put a greater strain on the company to fulfill its core duties. An acquisition would have to offer major advantages to make it worthwhile to Apple. Disney might be one of the few options that makes sense. Disney’s media portfolio, products, and marketing networks would provide Apple with a major competitive advantage.
“Don’t build new roads when the old ones are falling apart from neglect.”
lol, thank you Aristotle.
Get Samdung!
I think Thursday night football has damaged the NFL by diluting its product. Glad Apple didn’t overpay for those media rights. I think Disney might be the right vehicle.
Don’t forget old summer redstone is ready to call it quits, so there could be an opportunity there.
Arrogance
Success ➡️Arrogance➡️Complacency ➡️Shit hits the fan ….
He who pays dictates the terms.
“Some analysts and investors argue for…” You can stop right there because whatever comes after is worthless, obtuse noise coming from the clueless wonders of finance.
Apple doesn’t need to spend a dime on Netflix or any other streaming service. They have the capability and resources to replicate and supplant the other streaming services if they put their mind to it. Now obviously, that hasn’t happened yet. But whatever ails Apple in its quest for video dominance won’t be solved necessarily by a large outside acquisition.
It’s clear by their “throw shit on the wall and see what sticks” approach that Apple does not know what’s going to happen with video and music over the next few years. Of course no one really does.
With regard to Apple Music, I understand why some have a hard time getting past the programmatic focus on hip hop and rap. I like listening to Zane Lowe, who is a fantastic host who exudes wit, has great timing, and conducts great interviews. He plays some really cool new stuff that I would never hear otherwise. Of course, when it all gets mixed in with hip hop and rap it is a big turn off for me. So, I get why some are dismissing Apple Music. Still, they’re wrong to dismiss it.
While big acquisitions may not buy Apple out of its current dilemma, I maintain that the Beats acquisition was a fantastic move. They started out with a compelling if imperfect offering and have been honing talent and developing infrastructure while deepening their influence in the music industry. Beats 1 is but a single stream. Over time Apple Music can grow more streams for those with different musical tastes.
With video as with Beats, Apple needs to hire the right talent to get videos off the ground. Do they really have to buy all of Netflix to do that?
Apple enjoys its ‘pile of gold’ too much IMO. It may be one of the things that has buffered AAPL from dropping further than it had till recently.
Rather than being timid, doing nothing and accumulate so much cash, how about returning some of those to us consumers. When I hear Apple is taking majority of the profit compared to its market share, it is beginning to bother me. I was not before, and I have been user of Apple products including iPhones for more than a quarter century. I never felt so disgusted at Apple’s management. Tip toeing timid and risk averting bean counter at head, feeling of admiration and excitement are rapidly fading away. Although cliche, we need Steve Jobs-like figure back. I am beginning to drift away from greedy Apple for the first time.
Apple returns cash to shareholders every quarter. In fact, I expect to get $10k tomorrow. Apple would likely return ALOT more, once corp tax reform is settled. Right now, their hands are tied, as they have already maxed out returning their US-based cash.
All the negativity disgusts me more. Most of the comments totally lack objectivity and factual evidence.
Return profits to shareholders? Of course! That’s give and not the point of discussion. But that’s not the point. Everything must be in proportion. I am beginning to feel ripped off. Rumour of iPhone 8 going north of $1,000? I want Apple to price their products a bit more sanely and reasonably, paying small time shareholders aside. What do Apple think they are. But Apple is now a phone company. We should not have an elevated fantasy, I agree. But again, lower the price Apple! Enough is enough.
95% of Apple rumors are false. And even if a special 10th iPhone flagship is priced at $1000, that doesn’t mean the entry price. Try not to be influenced by all the fake news and haters. The Macalope tore apart the $1000 iPhone story.
We consumers want price lowered. C’mon Apple, $1,000 for a phone?
But Criticism is actually by shareholders. They obviously want Apple to be a bit bolder to bring in even more profit by investing, not sitting on so many billions of dollars. Accumulating disproportional cash profit by ripping consumers off must be reeveluated. That’s what I am saying.
What $1000 phone? You mean the $969 256GB Jet Black iPhone 7 Plus? Or are you speaking of the non-existent “iPhone X” that supposedly will have a lot of high-end, low-yield technologies?
“Ripping off customers” Are you paying too much for something? That’s your own stupidity as a consumer. Here’s a hint… if you think it costs too much, don’t buy it, then you won’t feel ripped off. There are many, many other choices at every price point.
And in reality, ripping off customers is mainly something that happens at the low end of markets, not the high end. People who buy cheap, get cheap and then feel like they’ve been ripped off and regret it. People who buy at the high end do so for reasons other than cost; there’s an appreciation for design, craftsmanship, engineering, materials, performance, support, etc. Those are things Apple excels at and can justify their pricing accordingly.
When someone has to drag in the tired old “arrogance”, you know they don’t have much ability to think or write.
Your tone of arrogance is noted.
Amazing it just gets more and more hilarious. I think it’s time for an impromptu humor test.
What do you find most funny:
a. MDN’s headline saying “Apple’s arrogance said to contribute to struggles to make big deals” while the original headline reads “Apple Struggles to Make Big Deals Hampering Strategy Shifts.”
b. MDN’s link that points to an article entitled “Calls for Russia Probe Mount for White House Reeling from Flynn Fallout” (Flynn, wasn’t he the guy that came up with TRON?) instead of pointing to the actual article, possibly here:
https://www.bloomberg.com/news/articles/2017-02-15/apple-struggles-to-make-big-deals-hampering-strategy-shifts
c. My post pointing it out.
Have fun.
Hulu would be a good get for Apple. But I doubt it’s available since it’s owned by several content makers. If Sony, Dish, DirecTV, and Hulu can all create a live streaming service (with Google and probably Amazon soon to come too), why the hell can’t Apple get a deal done?
Their TV app kind of sucks. For example if you have the CBS app, they autoplay the next available show automatically, and if you are on the last, it will play the very first episode. So on Apple’s TV App, CBS shows are ALWAYS at the top of the Next Up list. Sucks. And then of course Apple doesn’t support Amazon Prime Video and their TV app doesn’t catalog Netflix exclusives.