As per CITI analysts Jim Suva and Asiya Merchant, there is a 40% chance that Netflix will be acquired by Apple. As US President Donald Trump’s corporate tax cut has passed, both the companies might reveal this news soon.
Now this news is contradictory to the earlier announcement made by Apple that it is launching a video Subscription service in 2018, in competition with Netflix.
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. Adding, “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.”
Now Apple has never successfully offered any interesting TV or movie subscription. Though iTunes was a hit then viewers shifted to Netflix, Amazon or Hulu services.
Read also: Apple is reportedly acquiring Shazam
Now Citi analysts have nothing to lose by making this claim and prediction. As per their claim, there is a 40% chance that Apple will buy Netflix, so if Apple doesn’t, they can clearly say that there was a 60% chance that this deal will not take place and if they are right, well they would totally own the prediction and say that they started it. So nothing to lose, but realistically speaking why would Apple spend $75 billion to acquire Netflix, when it just made an announcement for introducing its own subscription service? It seems quite unlikely, but you never know.