Overall, Sacconaghi said he thinks Apple probably won't buy Netflix. But what it plans to do is compete with both Netflix and existing cable and satellite TV companies, by offering its own over-the-top TV-style service. All the company needs to do is enter into a licensing agreement with content providers, something it has been trying to do for some time. Say no to plagiarism. Get a tailor-made essay on “Why Violent Video Games Should Not Be Banned”? Get the Original Trial Netflix has around 80 million subscribers worldwide, which is impressive. But Apple's firepower and marketing muscle, as well as the addition of any original content the company develops itself or acquires, would be able to bolster that figure even further, the Bernstein analyst believes. The result would be a fast-growing global subscription TV and movie platform. If Apple succeeds in switching a large portion of its iPhone and iPad users to a Netflix subscription model, it could have a big impact on the company's stock price. Despite its size, its value is now valued at a low multiple, due to its hardware orientation. If it were able to create a substantial, recurring entertainment business, the stock could receive a higher value. Netflix CEO Reed Hastings would bring a lot of vision and expertise in digital services to Apple if the company were acquired, as would some other members of the streaming service's management. And Apple could use that talent in other areas of its business, while adding its cash and strength to Netflix's content development aspirations. Historically, the Bernstein analyst notes, Apple has not made significant acquisitions, even though it has the financial resources to do so. The largest deal ever was the purchase of the Beats music business in 2014 for $3 billion. Over the past 10 years, Apple has only spent $12 billion on acquisitions. Buying Netflix would be more than four times that amount. The company believes its core competency is creating great products, rather than buying products made by others. This focus has allowed it to have end-to-end control over all aspects of product development and design, which is a large part of the company's DNA. Purchasing another fully-fledged operating company would be unprecedented. According to Sacconaghi, Apple appears to want to create its own TV-like offering, rather than simply acquiring the TV shows and movies that Netflix has produced or has the rights to. Apple CEO Tim Cook has repeatedly said that TV is an "area of ​​intense focus" for the company and that it wants to offer a comprehensive offering of news and sports as well as movies and of television shows. Although buying Netflix would give Apple an advantage in the subscription services space, the company does not need to acquire the company to gain most of these advantages: it could enter into a licensing agreement with Netflix, while creating its own subscription offer like that of Amazon. Main video. it might even pay extra for Netflix to provide exclusive content. Although Apple has significant cash, most of it is held overseas, so the company would likely have to issue debt to acquire Netflix for $50 billion. A.