Apple has been stumbling over the content leg of their forward looking strategy. Apple has yet to ink a deal with content providers or networks to provide a streaming solution for cord cutters. A merger or buyout of Disney would seem to me to be one option, albeit a really long shot. Think of the marketing. Imagine Pluto as the voice of Siri. I wonder what the founder would be up to if he were still around.
Naw... Apple should buy Google so they have a monopoly on the smartphone market again. /s
I know you are being sarcastic but never at any time did Apple have a monopoly on the smartphone market. As recently as 2010, Blackberry sold more smartphones annually than Apple. So while Apple certainly deserves credit for inventing the smartphone, the consolidation of the smartphone market into iOS and Android, driving established players like Blackberry, Nokia and Microsoft off the scene entirely, was primarily due to the success of Android. Had it not been for Android, either Symbian or Microsoft Mobile would have succeeded. (Ironically, the same company, Nokia, represented the failure of both.)
What a great Idea. This would be 'The Big One', a magnitude 9.9 earthquake. Hollywood would combust like a magnesium flash gun. I'd expect them to float off the theme parks though. At least then the other studios and creators would have to engage with apple instead of ignoring them.
Would it happen? Probably not.
Actually, by going from needing the Apple platform to disseminate their content to becoming a direct competitor, the other studios and creators would have even more of an incentive to not only ignore Apple but collude against them, not less. Right now, the content owners/creators are simply trying to avoid a situation where Apple makes more money off their content than they do, and Apple gains too much influence over the content creators. Movie and TV studios, for instance, don't want to deal with the sort of 800 pound gorilla that iTunes became for the music industry and I don't blame them. But shift from "we don't want Apple pushing us around" to "Apple is now making movies, TV shows and records that compete with our own AND using their own platform to compete with our content" then the result would be war. It is already bad enough that these companies have to deal with the likes of Comcast, which both disseminates their content through cable AND owns their own studio to create their own content (Universal). But at least Comcast doesn't own the cable channels like HBO and Showtime themselves where their content would compete head to head with that of other studios. With Apple that would be the case ... Disney's content would compete directly with that from other studios on iTunes, for example. The content creators and owners already created a competing standard, Ultraviolet, to keep Apple from monopolizing the digital video market. Who knows what action they would take against Apple/Disney.
Why yes it was. Especially considering the fact that the $3 billion that Apple paid was considered to be far more than Beats was worth. Beats entire product line: headphones, bluetooth speakers and a music streaming company. And Beats wasn't making a whole lot on the bluetooth speakers, and the music streaming company was likely losing money. It is funny ... companies with billions quarterly in revenue with huge product portfolios that are very influential like Qualcomm, Nvidia and - depending on the context - even Microsoft, Amazon, Samsung and Google get regularly marginalized on here while a small maker of audio accessory hardware - we aren't even talking about Bose here! - has this question asked.
Probably no anti trust - just a huge price tag. The combination would be incredibly powerful. It would be great to have competitors pay Apple for content rights. Imagine 'Apple Land' as a section of Disney World or Apple product placements in the Star Wars Movies - LOL! Probably very unlikely though.
What you are stating is exactly what would cause anti-monopoly regulators, especially in the EU, to act.
As an AAPL shareholder, I would not be in favor of this - at least, not as a cash deal at around $157 per DIS share. As a merger or as a largely stock deal? I'd have to think about that some more.
At $157 a share, Disney would cost around $250 billion. Apple has around $160 billion in cash net of debt. If we're talking about using repatriated cash, which the OP suggests, that pile would likely be somewhat smaller due to some taxes being paid on those remitted foreign earnings. At 10% that would cost around $20 billion. And in acquiring Disney, Apple would be taking on a little bit of additional debt (net or cash). Could Apple do it? Sure. But I don't think it would and I don't think I'd want it to. The debt that Apple would have to take on is not my only concern.
Also... for accuracy's sake, though it isn't that important... at the time of his death Mr. Jobs' stake in Disney was worth around $4.35 billion.
Laureen Powell Jobs has a currently estimated net worth of $14.1 B and Disney is the bulk of that. Laureen bought a property in Florida in an equestrian community so that one of her daughters could train with her competition. That probably didn't leave a dent.
I would expect her net worth to be even greater than that (accounting for the trusts). The Disney stake would be worth more than $14 billion today. I'm not sure whether the trust still holds that large a stake though. It wasn't listed on the last DEF 14A filing as a 5% owner. In previous years it had been as it held more than 7% of Disney, though the total number of shares it held had decreased somewhat over the years since Mr. Jobs' death. Perhaps the stake was split up?
The stake that Mr. Jobs held in Apple when he died would be worth around $5.5 billion today.
But people insist on calling Apple a monopoly every chance they get. It’s become an alternative fact along with the employment of slave labor.
Apple is a Monopoly of what? Making the majority of the profits in the Smartphone business? That has to be it. In traditional terms of market share? No way in a million years and that is probably what apple wants.
This ain't going to happen. Disney is a global brand which enhances Apple's brand to keep in front of consumers with Theme park, Movies, Sports, etc but Apple is known for buying smaller niche tech companies and put it to use for better product offerings. Disney doesn't fit into Apple's investment philosophy, way expensive(DIS:$113) than in past.
Was Beats a small niche tech company?
One can't compare same as buying Beats vs Disney. It's like lifting 20lb vs 200lb.
Excellent example, along with that of Yahoo and Sony.
How the hell can you compare Yahoo to Apple. Or Sony to Disney.
That is idiotic.
Just because some random larger acquistion did not work in the past does not mean all large acquisitions don't.
This is as idiotic as saying Apple should not release an iPhone because Nokia phones failed.
While I might take issue with your recent epiphany/flipflop over Apple I do support your posts here showing the idiocy of these comparisons. There is NO comparison for a deal like this, far fetched as it may seem.
Anti-trust regulators, both domestic and foreign, would never approve. And Sony has shown what happens to tech companies when they try to transcend tech. Not only are they running the entertainment properties that they acquired (including Columbia Pictures, RCA/BMG and other record labels etc.) into the ground, but where once they are among the biggest and most powerful tech companies in the world - more so than Samsung, Google, Apple and Amazon - now they are pretty much just the PlayStation and the #2 maker of TVs (behind Samsung). They don't even make PCs anymore, and where they had the potential to rival Samsung in the mobile device market, they so badly bungled marketing and product development efforts that now they don't even try to sell smartphones outside Japan, and it is unclear whether they still make tablets at all.
Sony proves that if you try to dominate everything you become good and competitive at nothing. They are certainly a cautionary tale for Apple and all the people who claim that Apple should buy Disney or even Netflix.
If you ask me, Google is another cautionary tale. Of all their efforts to expand beyond their initial search engine/web browser/email product - synergy that they did not innovate as AOL first started combining the 3 back in the early 90s - pretty much everything else they have tried their hands at since then but YouTube and Android have failed. And even those have qualifiers. Google bought an already successful YouTube only after years of trying and failing to compete with them with "Google Video". Android only succeeded because of the efforts of Samsung and the other hardware partners. That is why the other Android products where Google hasn't given manufacturers the freedom that they gave them with smartphones and tablets to control their own products so long as they retained the mandatory apps and Google branding i.e. Android Wear, Android TV etc. have failed, as has Google Fiber, Google Fi, the Nexus/Pixel programs, Google Home, Google VR, Google+ and so on. Even their Google Cloud venture, something that they should be great at, has been only a small success at best. Apple should not try to be Sony or Google.
All you points are moot.
Apple ins't Sony
Sony was bigger and more influential than Apple before they diluted themselves and added all these distractions by becoming a diverse media company instead of sticking with tech. Sony went from revolutionizing consumer hardware with products like the Walkman and Blu-Ray - as well as transforming the video game market with Playstation, which at that time was dominated by Nintendo and wannabes like Sega where Playstation - to getting crushed by companies who used to make cheap versions of their own products like Samsung and Huawei. Take smartphones. I know, you regard Android as an illegitimate interloper and you hate and desire the failure of all Android OEMs equally. But as a tech and business story as opposed to merely "how does this affect Apple" story, Sony with their name brand alone - to speak nothing of things like R&D, marketing, supply chain -should have been #3 in smartphone sales behind Samsung and Apple. Instead they are getting crushed by companies that either weren't selling consumer products like Xiaomi or flat out did not exist at all like One Plus, and haven't even been able to effectively market their mobile devices to PlayStation owners.
Apple isn't Sony today, but give them 10 years after buying Disney. Sony didn't fall apart immediately after buying Columbia Pictures, BMG Music Group, RCA etc. either. Neither did the AOL/Time Warner/Yahoo merger go south right away. It took years before the effects of spreading themselves too thin, mostly the result of placing the wrong vice presidents in charge of various divisions, took effect. And here is the deal: Sony was a huge company with a ton of divisions and products BEFORE. If anyone should have been capable of such diversification, it should have been them. But Apple, who throughout its history has only made a small range of computing devices targeted primarily towards consumers (Macs, then iPods, then Apple TV, then iPhones, then iPads, then Apple Watch ... I am not going to mention HealthKit or HomeKit until they become actual products) to take on the huge conglomerate that is Disney (Disney, Miramax, Lucasfilm, Marvel and Pixar are the movie studios alone!) would have no chance of managing such a monstrosity.
Ah so because the people at AOL failed, all the other people are destined to fail in the exact same way, because prophecy. Interesting (lack of) logic there...
Stupid. Apple doesn't need to own a media conglomerate. Talk about getting out of your core competencies. My god Apple can't even update their professional computer lines on a regular basis but integrating a massive company like Disney is a good idea? The only people who think so are those who only care about the stock price.
Exactly right. And the goal of Apple has never been to be as big and powerful as possible. It's to make great products that make people's lives better. Buying a media company could be great if Apple had other ambitions, but it wouldn't help them make great products.
Naw... Apple should buy Google so they have a monopoly on the smartphone market again. /s
Had it not been for Android, either Symbian or Microsoft Mobile would have succeeded. (Ironically, the same company, Nokia, represented the failure of both.)
Er, that's opinion, not fact. It entirely depends on the ability of those companies. RIM showed poor leadership and ability to adapt. MS Windows won the market share war in the '90s, even with only one other serious competitor, so simply being a two-player game is not enough to say what would happen.
Why yes it was. Especially considering the fact that the $3 billion that Apple paid was considered to be far more than Beats was worth. Beats entire product line: headphones, bluetooth speakers and a music streaming company. And Beats wasn't making a whole lot on the bluetooth speakers, and the music streaming company was likely losing money. It is funny ... companies with billions quarterly in revenue with huge product portfolios that are very influential like Qualcomm, Nvidia and - depending on the context - even Microsoft, Amazon, Samsung and Google get regularly marginalized on here while a small maker of audio accessory hardware - we aren't even talking about Bose here! - has this question asked.
Beats was doing huge sales and was the #1 accessory in Apple stores. Apple already made their money back. So no, it wasn't more than they were worth.
Anti-trust regulators, both domestic and foreign, would never approve.
This would present zero anti-trust problems. Apple and Disney have virtually no overlap in their business lines. Therefore, in no market would this result in a reduction in competition. This would be like Wal-Mart buying General Motors or Google buying Boeing--a merger of two behemoths but not the combination of two competitors.
But just to be clear, this ain't going to happen.
While what you are saying is perfectly factual, the regulators have stepped in to prevent companies from getting too big before. Also, please note that I wrote "foreign and domestic." Apple and Disney are global companies, Disney even more so than Apple. So it would not just be America's anti-trust definitions they would have to clear, but those in countries that are far less pro-business and regulation-skeptical, namely the EU. Note that the U.S. government has yet to rule that Google is a monopoly, for instance, but the EU already has (Google is appealing/stalling). The EU even has made ridiculous claims of Apple "monopolizing" their own app store and tech! So I would not imagine their looking very fondly on Apple and Disney merging.
Ok, I was being flippant by saying "zero anti-trust problems." Yes, regulators around the world would take a look at this, but I'm certain that the US regulators (with a Republican administration) and confident that international regulators would approve this with no more than minor stipulations. Even if Apple were to consider this, it wouldn't be predicated on forcing consumer to consume Disney content on Apple devices (which would boost the Apple side while crippling the Disney side and starting an all-out war with everyone). Therefore the "concessions" that regulators would require would likely be very palatable.
Anti-trust regulators, both domestic and foreign, would never approve.
This would present zero anti-trust problems. Apple and Disney have virtually no overlap in their business lines. Therefore, in no market would this result in a reduction in competition. This would be like Wal-Mart buying General Motors or Google buying Boeing--a merger of two behemoths but not the combination of two competitors.
But just to be clear, this ain't going to happen.
The statement "this would present zero anti-trust problems" is based on the assumption both companies would continue to work completely independently of each other and would enter into licensing & distribution agreements with other companies (Samsung or CBS Corporation for example) on the same terms and conditions as the now related companies. The only way to ensure that happens is to have anti-trust regulators scrutinize transactions between the two companies to ensure they are done at arms length. Even though there is little overlap in their current business lines there are still a multitude of ways consumer choice could be harmed by the combined company.
In your example what would happen if Wal-Mart bought General Motors but followed up by saying the only place you can buy a GM product is through Wal-Mart? It is certainly possible if Apple bought Disney that it would institute a period of exclusivity for digital distribution of Disney/ABC/Marvel movies to Apple products. That would be harmful to consumers who use competing products. Maybe they would also offer substantial discounts to Disney theme parks only if you paid for the tickets with ApplePay which would be harmful to Samsung Pay consumers.
Horizontal consolidation of direct competitors is not the only anti-trust issue. The potential for vertical integration after-the-fact has to be considered as well.
Excellent points. Apple would likely be forced (in some markets) to commit to not doing some things that they would be unlikely to want to do. My assumption is that if Apple wanted to buy Disney the deal would not be scuttled due to regulatory interference.
A good idea in theory, a bad one in practice. Both companies are huge. The CEO of this union would be busy on purely Disney matters as much as on purely technical ones. That would lead to a more vague direction and hurt the tech business imo.
A good idea in theory, a bad one in practice. Both companies are huge. The CEO of this union would be busy on purely Disney matters as much as on purely technical ones. That would lead to a more vague direction and hurt the tech business imo.
In theory, they could run this more like a Berkshire-Hathaway type conglomerate, leaving the Disney leadership intact. They are in completely separate industries, so it's not like the Apple guys would be obligated to mess around in the details of movies, TV, theme parks, licensing, etc., etc.
That is to say that Apple could make this work if they wanted to, while not ruining what's great about Apple. In fact, they would be foolish to give up any of the brand capital of either company, so they would probably do an "Alphabet-style" move--making Apple Inc. and Disney Inc. subsidiaries of a new entity--with Cook either handing the reins of Apple to someone else or someone else coming in to run the parent company.
If Apple had another $150 billion lying around, I'd say "go for it; got to put the money to some use and Disney is an excellent investment."
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Disney
The stake that Mr. Jobs held in Apple when he died would be worth around $5.5 billion today.
In traditional terms of market share? No way in a million years and that is probably what apple wants.
Apple isn't Sony today, but give them 10 years after buying Disney. Sony didn't fall apart immediately after buying Columbia Pictures, BMG Music Group, RCA etc. either. Neither did the AOL/Time Warner/Yahoo merger go south right away. It took years before the effects of spreading themselves too thin, mostly the result of placing the wrong vice presidents in charge of various divisions, took effect. And here is the deal: Sony was a huge company with a ton of divisions and products BEFORE. If anyone should have been capable of such diversification, it should have been them. But Apple, who throughout its history has only made a small range of computing devices targeted primarily towards consumers (Macs, then iPods, then Apple TV, then iPhones, then iPads, then Apple Watch ... I am not going to mention HealthKit or HomeKit until they become actual products) to take on the huge conglomerate that is Disney (Disney, Miramax, Lucasfilm, Marvel and Pixar are the movie studios alone!) would have no chance of managing such a monstrosity.
Exactly right. And the goal of Apple has never been to be as big and powerful as possible. It's to make great products that make people's lives better. Buying a media company could be great if Apple had other ambitions, but it wouldn't help them make great products.
Ok, I was being flippant by saying "zero anti-trust problems." Yes, regulators around the world would take a look at this, but I'm certain that the US regulators (with a Republican administration) and confident that international regulators would approve this with no more than minor stipulations. Even if Apple were to consider this, it wouldn't be predicated on forcing consumer to consume Disney content on Apple devices (which would boost the Apple side while crippling the Disney side and starting an all-out war with everyone). Therefore the "concessions" that regulators would require would likely be very palatable.
Excellent points. Apple would likely be forced (in some markets) to commit to not doing some things that they would be unlikely to want to do. My assumption is that if Apple wanted to buy Disney the deal would not be scuttled due to regulatory interference.
That would lead to a more vague direction and hurt the tech business imo.
In theory, they could run this more like a Berkshire-Hathaway type conglomerate, leaving the Disney leadership intact. They are in completely separate industries, so it's not like the Apple guys would be obligated to mess around in the details of movies, TV, theme parks, licensing, etc., etc.
That is to say that Apple could make this work if they wanted to, while not ruining what's great about Apple. In fact, they would be foolish to give up any of the brand capital of either company, so they would probably do an "Alphabet-style" move--making Apple Inc. and Disney Inc. subsidiaries of a new entity--with Cook either handing the reins of Apple to someone else or someone else coming in to run the parent company.
If Apple had another $150 billion lying around, I'd say "go for it; got to put the money to some use and Disney is an excellent investment."