There Is a 40% Chance Apple Will Acquire Netflix, according to Citi


The new prediction comes from Jim Suva and Asiya Merchant, analysts at Citi, who believe that there is a 40 percent chance that Netflix would be acquired by Apple, Business Insider reports.

"The firm has too much cash - almost $US250 billion - growing at $US50 billion a year". Under the new taxing rules, the tech giant will be able to repatriate about $220 billion in cash to the US. The tax cut paves the way for Apple to bring its massive pile of cash stored in foreign jurisdictions to the United States.

According to the Citi analysts, "With over 90 percent of its cash sitting overseas, a one-time 10 percent repatriation tax would give Apple $220 billion".

In the same Citi note, the analysts said there's a 20 to 30 percent chance Apple would acquire Disney. Merchant and Suva also see Disney and Tesla as potential candidates for a merger with Apple, though these are far less likely than a deal with Netflix. However, the question here is, despite the huge cash reserves, does it make sense for Apple to buy Netflix? And Apple's method of content delivery - while robust and market-defining within the iPhone and Mac ecosystems - doesn't align with the way viewers are now streaming Netflix and its competitors. Now that we know that such a deal can happen, the question is, will it?

The purchase would tightly integrate the Netflix platform with Apple TV-much like with Amazon Prime and Amazon's Fire digital media players-but it's little more than speculation at this point. While Apple does offer a vast catalogue of video and music content on iTunes, there is no denying the fact that streaming services such as Netflix are much more popular.

Apple has been trying to get hold of providing a compelling television or movie service for years now.

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.

In an attempt to try its hands at content creation, Apple previous year hired Sony Pictures Television presidents Jamie Erlicht and Zack Van Amburg to lead its Hollywood push.

Nollen predicted that Netflix will increase original content from 25 percent in 2017 to 60 percent in 2020.