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URL:  http://boards.fool.com/frankly-i-don39t-see-any-of-the-candidates-32939806.aspx

Subject:  Re: Apple Acquisitions? Date:  1/3/2018  4:55 AM
Author:  platykurtic Number:  208293 of 208488

Frankly I don't see any of the candidates mentioned in this thread as being *that* suitable for an Apple purchase. To do so would limit further opportunities on other platforms - either through Apple wanting exclusive content or via subtle discrimination & direct competitive moves by the other big '5.' All those competitors have lots of cash also & an approach by Apple may even spark a bidding war which could easily lead to 'buyers remorse.'

Some examples why those candidates may not work ...

Netflix - As a service company Netflix relies on being 'seamlessly' spread across all significant platforms - think Samsung TVs, Apple devices, being a preferred player on Android, Rokus, PCs etc. Apple hasn't shown much interest in this (there's been no expansion of iTunes to Android, Apple Music is a poor player on Android) & that doesn't include the barriers that the platform owner may put in-place (e.g. YouTube on iOS which has some subtle barriers & discrimination against it.) If seamless distribution starts to drop, the content monetization starts to fall, which could lead to a significant loss of value. (You can see some of this in say iBooks vs. the Kindle market.)

Disney - Much like Netflix a key pillar for Disney is to have as much content as easily accessible as possible. This underpins the merchandising revenue, attractiveness of the parks & studios, even the under development streaming service (which Disney seems to be actively attempting to acquire further content for - FOXA for example.) Like Netflix, and for similar reasons, Apple would be a poor owner. (With Android being much larger than iOS worldwide any content limiting would really cost these types of businesses.)

Tesla/GM - Better candidates as they make stuff & don't try to distribute it everywhere. However a much different business & business model than where Apple's success lies. Apple doesn't try to build stuff, rather it designs & distributes stuff. I'd expect that Apple would be more interested in having a Tesla or GM build an Apple car for Apple to sell, rather than own the production itself. GM *might* be interested, but I'd expect Tesla not to be as they probably view themselves as the 'Apple of cars' so actively disinterested (so I'd expect would require extreme duress & no other options - which is unlikely - to accept an Apple offer.)

AMC/VIA - Content distribution issues limiting content value (Netflix/Disney discussion above) & without exclusive content there's no value for Apple.

Sonos - A better candidate but like Tesla probably view themselves as the 'Apple for speakers.' And Apple have an audio brand (Beats) that could extend into this space & Sonos is determinedly mobile OS agnostic (Sonos's new speaker has been developed to integrate Alexis & the Google assistant.) (Is there any news on how Beats' sales & profitability are doing under Apple ownership? Do they have more or less 'buzz'?)

The best candidate is perhaps Apple itself. That is invest in ensuring it's existing platforms are close enough to 'state of the art' as necessary. iOS & iWatch are in a relatively good place however the Mac family has a few gaps & is not actively updated quickly enough (especially the pro space), Apple Maps could use investment & development, Siri a lot of development, if Apple wants to compete in the home speaker space then it needs a lot of development (perhaps using the Beats brand & making this cross-platform like Sonos.)

And there might still be some other 'near to Apple' candidates, say a 'mesh wifi' company to prepare for the next generation of Airport (if Apple are interested - doubtful), some smart home companies (Ecobee maybe, maybe a smart lock company & a security company) to boost the 'it just works' for home automation. However there's really nothing that stops Apple from doing greater investment in its existing services & targeted acquisition now, so I don't expect much to change, other than special dividends & buybacks when it makes real sense. (Apple is really at a size where it may need a restructure & a bit more decentralization to further develop.)
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