On balance, Sacconaghi said he believes Apple probably won't buy Netflix. But what it intends 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 Shouldn't Be Banned"? Get an original essay Netflix has around 80 million subscribers worldwide, which is impressive. But Apple's firepower and marketing prowess, plus the addition of any original content the company itself develops or acquires, would boost it even more, the Bernstein analyst says. The result would be a rapidly growing global television and film platform. If Apple can shift 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, it is now priced at a low multiple, due to its focus on hardware. If it can build a substantial recurring entertainment business, the stock could have a higher value. Netflix CEO Reed Hastings would bring a lot of vision and experience in digital services to Apple if the company were acquired, as would some of the streaming service's other management members. And Apple could use these talents in other areas of its business, while adding money and muscle to Netflix's content development aspirations. Historically, analyst Bernstein notes, Apple has not made large acquisitions, even if it had the financial resources to do so. The largest deal ever made was the purchase of the Beats music business in 2014 for $3 billion. Over the past 10 years, Apple has spent just $12 billion on acquisitions; buying Netflix would represent more than four times that amount. The company believes its core competency is creating great products, rather than purchasing products made by others. This focus has given it complete control over all aspects of product development and design, and this is an important part of the company's DNA. Purchasing another fully-fledged operating business would be unprecedented. According to Sacconaghi, Apple appears to be building its own over-the-top, TV-style offering, rather than simply acquiring TV shows and movies that Netflix has produced or has the rights to. Apple CEO Tim Cook has repeatedly said that television is a "hot spot" for the company and that it plans to provide a comprehensive offering with news and sports, as well as movies and TV shows. Although buying Netflix would give Apple an advantage in the area of ​​subscription services, the company does not need to acquire the company to gain most of these advantages: it could enter into a licensing agreement with Netflix, building on the at the same time its own subscription offering like that of Amazon. First Video. it might even pay extra to get Netflix to provide exclusive content. While Apple has a lot of cash, most of it is held offshore, and so the company would likely have to issue debt to acquire Netflix for $50 billion. Such financing would cost the company up to $2 billion in interest payments per year, and Netflix would only generate about $300 million in net profit each year. This means it would dilute Apple's earnings. The best voice on fusion in.