Apple could gobble up streaming giant Netflix, say Citi analysts
MUMBAI: Even as the media is abuzz with reports of Apple’s impending entry into the video subscription market in 2018, analysts from Citi have suggested that the iPhone maker could possibly gobble up popular streaming service Netflix to take advantage of US President Donald Trump’s corporate tax cut.
According to Citi analysts Jim Suva and Asiya Merchant, there are 40% chances that Apple will acquire Netflix. Under the new taxing rules, the tech giant will be able to repatriate about $220 billion (roughly Rs. 14 lakh crore) in cash to the US.
In a statement, Suva and Merchant said, “The firm has too much cash – nearly $250 billion (roughly Rs. 15.9 lakh crores) – growing at $50 billion (roughly Rs. 3.18 lakh crores) a year. This is a good problem to have. Historically, Apple has avoided repatriating cash to the US to avoid high taxation. As such, tax reform may allow Apple to put this cash to use. With over 90 percent of its cash sitting overseas, a one-time 10 percent repatriation tax would give Apple $220 billion (roughly Rs. 14 lakh crores) for mergers and acquisitions (M&A) or buybacks.”
A report in Business Insider Australia said that iTunes has been a huge hit for the company, but viewers have migrated increasingly to services like Netflix, Amazon or Hulu to watch their favourite shows leaving Apple struggling to offer a compelling TV or movie offering.
In September 2017, reports mentioned that Apple might lease the Culver Studios in California as it plans to pour $1 billion (roughly Rs. 6300 crore) into TV and movie productions.
The iPhone maker has already hired top Hollywood talent duo Jamie Erlicht and Zack Van Amburg to lead its Hollywood push and is reportedly developing a new TV show that will star Reese Witherspoon and Jennifer Aniston.
The battle for best movie scripts and television projects intensified between tech giants in the Silicon Valley. Google-owned YouTube is already producing original television series and Amazon has won Oscars for “Manchester by the Sea” show.