Apple should buy Comcast

“Rumors indicate that Apple (AAPL) and Comcast (CMCSA) will form some sort of partnership. However, a partnership with Apple will have immaterial financial impact as Apple’s revenue nears the $200 billion mark,” Alex Cho writes for Seeking Alpha. “The incremental add needed to sustain revenue growth would require more than just a new product category, it would require an acquisition. The acquisition would have to offer some strategic value to Apple, and it must operate at extreme scale.”

“At this specific juncture Apple should acquire Comcast,” Cho writes. “An acquisition of Comcast [with a market value of $127.96 billion] would make it the highest valued acquisition in corporate history, which may leave some skeptical of whether such a deal is even realistic. But considering the mounting pile of cash, and the slowing growth in Apple’s core hardware business, adding a high-margin service business could be its winning ticket to becoming a resurgent growth investment. It’s likely that investors will come to reward Apple’s management for its ability to create cash generative businesses from scratch, and its savvy acquisitions.”

“For the past 14 years, we’ve never seen a major technology company make any major headway into the old and well-established television industry. However, Apple may be the first to do this, if it plays its cards a little differently,” Cho writes. “If Apple were to buy out Comcast it can get an early lead, and establish the overall direction of network television, and broadband internet in the United States. This is because Comcast has 30% market share in the United States.”

Read more in the full article here.

49 Comments

  1. I don’t think so. The way AAPL is dropping maybe Comcast will be able to buy Apple instead. Looks like another bottom under $500 before long. Remember $395? How long can Apple continue with no new products.

    1. Of course, Comcast will not close to be able to buy Apple, but buying Comcast only has limited value: it is local provider that only covers 3% of world’s population. Even Apple will not be able to buy significant cable players in many key markets. So neither Jobs nor Cook ever bought Comcast.

      1. Exactly. The only benefit to Apple is that they would learn firsthand what is involved in owning dumb pipes.

        A far better investment would be to buy a small innovative content creation company… or exclusively partner with one.

    1. Yup. Comcast has these horribly inconvenient things called wires, servers, hubs, etc. etc. that like to go bad, get chewed through by rats, need upgrading, etc. etc.

      Buying Comcast would just be Apple throwing money to cause a headache. Better to develop partnerships where Apple is not responsible for the hardware of content delivery except for the receiving unit.

  2. That’s what I said weeks ago. The Last Mile would be in their pocket and finally provide Apple a walled garden without dependency on a third party for pipes.

    But can anyone envision an Apple Inc., who isn’t dependent on anyone but their consumers? I can’t.

    So why buy the cow as long as you’re still getting the milk? It costs a lot more to maintain a cow than it does to replenish your milk.

    1. So then what? Apple buys Time-Warner? Apple buys Cox? Apple buys CenturyLink?

      Eventually even Apple runs out of money, and between cash shortages and anti-trust laws, Apple STILL wouldn’t be able to serve eve half of its U.S. customers. And that doesn’t even begin to address international customers.

      Buying Comcast is a poorly thought out idea.

      1. Buying Comcast is a poorly thought out idea.

        I couldn’t agree more. Hence my “why buy the cow” statement. You really should read a person’s entire comment before jumping to conclusions.

  3. This writer seems aware of how badly the Justice Department wants to nail Apple, how US anti-trust laws work, or how Apple isn’t the type of company spend mountains of cash on bribing politicians to get away with things like this.

  4. Apple does not want a cable company with its physical network- that’s WAY too capital intensive. Now, buying a television network like NBC (which Comcast owns) or the rights to NFL games, that’s another story. Can you imagine: you want to watch NFL games on mobile? You have to buy an Apple product. 🙂

    1. Apple just needs to buy Disney, which owns, in a addition to an almost infinite media library, ABC, ESPN, Pixar, Lucasfilm, and pieces of companies like the History Channel. About $70B would buy controlling interest. Then use ESPN, which the cable companies cannot survive without, as a club to force them to the bargaining table for other content.

      1. I agree, if Apple ever were to spend its billions on a big media purchase, it should be Disney. The two companies have been linked for so long. Steve Jobs, due to Pixar, was on Disney’s board. Bob Iger is on Apple’s board. And the vast Disney library and brands would complement iTunes. And of course, ESPN. Don’t know if it’s possible, or even necessary, but on paper, an Apple/Disney combo makes more sense than Comcast. Unless Apple really wants to “revolutionize” cable.

  5. You know Apple operates outside the USA right? So this huge cost covers one, albeit large, market but ignores the majority of it. Apple makes deals specific to countries and rolls them out across the world as and when it can, but when have they made a large acquisition that does not benefit them globally? Maybe they should buy the worlds electricity generation and distribution. How about they mine their own silver and gold?

    1. It also happens to be problematic that most of Apple’s cash is offshore. That means in order to buy Comcast, Apple would have to repatriate millions of dollars, pay at least 25% or more in taxes! and then complete the purchase, which makes Comcast essentially cost $30 million or so more than it should.

  6. Apple should buy AT&T. Massively expand LTE bandwidth and invest in 5g infrastructure.

    Make everything in the Apple work connected wirelessly. Don’t depend on the people who own the cables in the ground to deliver your content.

  7. IMO, Apple needs partnerships with ALL cable and streaming companies… if they own one (be it Comcast, or Netflix, or whatever), then they become direct competitors to all the others. Did Apple need to buy any single record label?

    1. No they don’t. Cable doesn’t compete with cable in most markets, they compete with phone, cellular and satellite, which could be even MORE problematic for their content delivery.

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