After buying Beats Electronics, Apple Inc may be eyeing Disney as its next big target acquisition. In an article by Washington Post, one analyst at North River Ventures thinks this possibility is "frighteningly obvious."
Francis McInerney said Apple can continue to grow by acquiring Disney. Already a successful company, Apple may be looking for new markets to sustain its revenue and profit growth. After announcing stock dividends and stock buybacks for the benefit of investors, many continue to speculate about Apple's future and its growth.
For months, rumours have been going around that Apple will release a smart watch dubbed as the iWatch in September. Analysts have long predicted that the iWatch release will boost Apple's revenues and propel its stock beyond $100 per share.
McInerney said the "logic is so great this could happen tomorrow." He believes Apple and Disney have a similar way of thinking in "complementary markets." The two companies do not compete with one another but when combined, it would be a "powerhouse deal" in the making.
An Apple-Disney deal has been one of the hot topics of speculators in Wall Street for many years. The analyst believes the trend of moving content to the cloud may force Disney to act unless it gets left behind.
Disney may want to be on a platform so the company can grow in a new market. The report said McInerney's analysis is based on inside information from Apple and Disney. His statements are based on his analysis and understanding of the two companies' cultures and their need to prepare for the future. He believes both companies will act to remain profitable.
McInerney speculates that an Apple-Disney deal can be described as "Netflix on steroids." Apple Inc can benefit from the various ways it can earn from Disney's content while Disney can push its content in a more profitable place of Apple's unbundled world of TV and video.
He said having Disney under Apple's control will be a great asset if the tech giant can launch an Apple television set. This has been suggested for years but has yet to become a reality.
Inerney also pointed out that Disney Chief Executive Bob Iger serves as one of Apple's board directors. The report's author reached out to Apple and Disney for comment, but no response was given on the matter.
Although Apple Inc currently has $151 billion in cash and marketable securities, most of its assets are in offshore accounts. If the company will bring it back to the United States, Apple will have to pay a huge tax bill. It is also questionable if whether or not regulators will approve the Apple-Disney deal.