As Apple this past summer earmarked $1Bn to develop, produce, and own unique and innovative content, it has been assumed that rumors concerning Apple buying Netflix were a thing of the past. However, latest reports indicate that Apple could acquire Netflix.
According to analysts from Citi, there’s a 40% chance that Apple buying Netflix in 2018. Citi analysts Jim Suva and Asiya Merchant said that President Trump’s corporate tax cut is the reason why likelihood of Apple acquiring Netflix is higher than ever.
The cut in corporate taxes, as well as a one-time allowance for companies to repatriate cash accumulated overseas with no troublesome hit, will provide Apple with more dollars, which could be put towards acquiring new companies. Owing to the new tax cuts that are in place, the Cupertino-based entrepreneur will have around $252Bn in cash, which is currently locked up in foreign jurisdictions but can be brought back to the U.S. On the basis of this forthcoming influx of cash, the Company has a decent chance of endeavoring to purchase Netflix.
In accordance with Jim Suva and Asiya Merchant’s estimation, Apple would only need a third of that cash to own the leading streaming service. Suva and Merchant said,
“The firm has too much cash — nearly $250 billion — growing at $50 billion a year.”
The iPhone maker has been struggling to provide a compelling TV or movie offering for years. Though iTunes has been a great hit for the Company, viewers have migrated increasingly to other services such as Netflix, Hulu, and Amazon to enjoy their favorite shows.
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Apple has recently stepped in the world of content creation. Making hit movies is a very different skill-set from developing iPhones: that’s what the Company comprehends, so chances are really high that Apple buying Netflix in the future.
The competition for the best television projects and movie scripts intensified between tech giants in the Silicon Valley. Google-owned YouTube is already offering unique television series and Amazon has won Oscars for “Manchester by the Sea” show.
Apple has already acquired top Hollywood talent Sony duo Jamie Erlicht and Zack Van Amburg to lead its Hollywood push and is reportedly making a new TV show that will star Jennifer Aniston and Reese Witherspoon.
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