An analyst at JP Morgan has suggested Apple should acquire Netflix as it aims to enhance its position as a video content creator.
In a note to investors, analyst Samik Chatterjee said: “We think Netflix is [the] best strategic fit” for Apple, enabling the company to differentiate itself from pure aggregators of content.
“We believe there is value to acquiring the most successful player in this space, which is hard to replicate with a smaller player in this market.”
Chatterjee suggested Netflix could cost Apple around $189 billion. Netflix has a current market value of $148 billion and $7 billion in net debt.
“We believe Apple can drive synergies between its leading position in smartphones and the rapid transition of video consumption to mobile to drive stronger services growth,” Chatterjee said. “We find Netflix as the best strategic fit, although we appreciate a combination is less likely as Netflix is unlikely to be a seller for a modest premium.”
“An acquisition of Netflix could help Apple drive consumers faster to their gateway app, which is serving as an aggregator of content and multiple subscriptions, and could enhance the opportunity around potential advertising revenues in the future,” Chatterjee added.
Reports Apple could look to acquire Netflix first began in January 2018 when analysts Citi said there was a 40 per cent chance Apple could look to buy the SVoD service.