Three reasons why Apple would not buy Netflix - NewCydiaTweaks

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Monday, January 8, 2018

Three reasons why Apple would not buy Netflix


Reading many of the headlines of the news this week on Apple we find a rumor that refuses to die: Apple will buy Netflix. After the tax reform Trump has gained more strength, as the company can repatriate tens of billions of dollars to the United States. Even so, Apple will not buy Netflix. Here we tell you why.
First, the aforementioned tax reform formulated by the Republicans, and signed by Trump just before the end of 2017, will allow Apple to bring back to the United States about 250 billion dollarsat a rate of 15% (compared to 35% according to the previous law).
The Fast Company reports that analysts from Citi, Jim Suva and Asiya Merchant, believe that Apple could use a large part of that cash to acquire Netflix. However, the same analysts believe that this deal only has a 40% chance of becoming a reality.
So, we summarize the reasons why Apple would not buy Netflix this year.

Why Apple would not buy Netflix

1. Apple could not repatriate all its cash
The analysts base their predictions in that Apple will transfer all of its cash to the United States, that is to say, about 252 billion dollars, that after discounting the taxes would be about 220 billion. Of this, those of Cupertino would hardly need a third party to acquire Netflix.
But Apple will not bring all its cash to the United States. The Fast Company assures that trusted sources assured that the company will only bring in half of the amount mentioned in 2018.
2. Apple does not make its purchase decisions based on its cash holdings
Apple's strategy to define its acquisitions has more to do with the technology needed to develop its products in the future, than with increasing market shares. For example, Apple's biggest acquisition to date has been the Beats speaker company, for 3 billion. Since then, their finances have continued to grow and they have not made any purchases that rival that one. They recently acquired Shazam, but for 400 million.
Apple simply does not make big purchases.
3. The strategic need to acquire Netflix may have passed
The development of content seems to be the line of business that will replace the iPhone as the biggest generator of profits for Apple. And as has been seen in the company's latest reports, the business continues to grow rapidly. Between 2016 and 2017, Apple reported a service line growth of 34%, surpassing the quota of iPad, Apple TV, Apple Watch, iPod and Beats.
As the president of Creative Strategies, Tim Bajarin wrote in an email to Fast Company.
While Apple could use momentum in the content, its service offerings are already a profitable segment of its business and the need for something like Netflix is ​​not as critical as it would have been two years ago.

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