Sandisk already in my portfolio.
Apple Acquisition Targets UPDATED JUNE 12TH, 2011
Recent rumors and discussion about Steve Job’s comment about saving cash for strategic opportunities has me thinking about what could be good targets for an Apple takeover.
I’ve long felt that Netflix would be a good target. Netflix has worked with movie and television studios to develop a large library of video on demand titles, and Netflix instant streaming applications are available for many Apple products, including the newest version of AppleTV. While Netflix also has the mail-rental DVD business, this could provide some diversification in Apple’s revenue stream, as well as provide free advertising for Apple products and services on the inside of the DVD sleeves. I no longer feel Netflix is a potential Apple acquisition target. While I still feel Netflix is a good company (and continue to own netflix stock myself), I don’t think they would sync together well, or pass anti-trust reviews. I still feel and hope that Apple and Netflix are complimentary, and hope that they continue working together to make sure that Netflix instant streaming is available on Apple devices such as the iPad and AppleTV.
Tivo (new potential target June 2011). One of the big issues with the AppleTV is that it isn’t really “television” in the traditional sense of the word. You can watch anything in your itunes library, and some third party apps such as Netflix and Youtube, but you can’t hook up a coax cable and watch pay TV or over the air broadcasts. If Apple were to buy Tivo, they could produce an “AppleTi-Vo” set top box that does everything the current apple TV does plus work with live TV and be able to record and rewatch shows. Both Apple and Tivo are big into quality user interfaces. Tivo is a 1.3billion company, and Apple’s cash reserves would only take a small hit to acquire them. Apple could easily produce hardware that duplicates this technology, but would have to build the customer base, something they’ve struggled with their current AppleTV offering. Apple owning TV would also help keep some revenue from customers who switch to google’s android phones.
Pandora (new potential target June 2011). Privately held Pandora operates an internet “radio” station that is customized for each user. As it stands, users can buy songs that are played through either iTunes or AmazonMP3. Apple purchasing Pandora could cut off the customers Amazon gets through Pandora. They could also intergrate it into iTunes directly. Pandora apps are already available for iPhone (and again, apple would gain revenue from users who are have Android phones).
I could see some success with a takeover of privately held Valve Corporation, makers of the Half Life, Portal and Counterstrike FPS franchises, as well as developer of the Steam content delivery system. Games are still a sticking point for PC users not to switch over to Macs (Apple releases of games are often much more expensive than the PC version and over a year behind). Apple purchasing Valve would gain several valuable game franchises which, as well as the Steam content delivery system.
Sony was rumored a while back as a target. I’m not sure that would be a good fit – Sony is much too large to easily merge into Apple, and makes competing products that would not fit together.
Component companies such as Sandisk, Western Digital, nVidia could be a possibility. Apple would get a better supply link to critical parts, and could have sway over new developments.
Foxconn would be a stretch target, mainly due to the controversial employment practices (Apple is able to distance themselves now by having a contractually relationship wiht them) and the fact that Foxconn makes products for Microsoft, HP, Sony and other Apple competitors.
Disclosure: I own both Apple and Netflix stock.
wrjohnston.net |
