The rumour mill has churned out talk that Apple is planning to buy Disney. Other rumours relate to it buying Toshiba.
When you get to become the biggest company in the world, expansion is not so easy. And when your brand is as celebrated as Apple’s, you have to be careful about devaluating your brand.
The purchase of Beats seemed to fit: here was a brand with high kudos – or, depending on your persuasion, with grossly overpriced products, just like Apple.
Maybe Disney would be a good fit too. Let’s face it, here is brand with huge value. And content is an area where Apple is struggling. It has transformed the music business, but when it comes to video it is making decidedly small progress.
Disney has a market cap of $180 billion, Apple has around $200 billion in cash, but to buy Disney it may have to pay a premium as high as 40 per cent.
It boils down to whether the Trump government will introduce rules encouraging the repatriation of cash sitting on corporate balance sheets to the US.
Not all are convinced. They argue that Apple buying Disney would send a sign that the company has forgotten how to innovate.
After-all, Apple tries to create a new future, Disney seems to celebrate a mythical past with its movies involving princesses, princes, or just plain beauties falling in love with beasts. It also creates fantasy worlds – the Marvel franchise for example – not core to the Apple image.
Although maybe the Star Wars theme has closer synergy with Apple.
Maybe the other rumour has more logic. Toshiba is in big trouble, it is also the world’s second largest maker of flash memory chips. Talk is that Apple is considering buying a 20 per cent stake in the company, partnering with Foxconn the Taiwanese manufacturer that makes Apple products and several other interested partners.
The Toshiba deal will set Apple back a few billion – pocket money – and does seem to be logical, in the sense that such a deal relates to the core business.
But Apple has many other options.
To carry on growing it has several routes it can go down. It can become a service company; and strengthen its content offering, and buying Disney, or maybe Netflix would fit in well with such a strategy.
Or it can go down the car route – it seems hard to believe that, if Apple is serious about entering the car business, it won’t make a major acquisition.
Or it can focus on the next stage in the evolution of tech – so that may be augmented or virtual reality, and its boss Tim Cook has already hinted that it is looking at augmented reality, or it may focus on the internet of things.
But even bigger bucks may lie with creating closer interaction between AI and users. This is where the next revolution is most likely to occur and the world’s biggest company in ten years’ time will surely be the company that cracks this challenge.