April 9, 2014
Two years ago, we suggested some ways that Apple should spend its growing stockpile of cash reserves. Among our suggestions was for them to purchase Netflix and getting into the wireless business. We also suggested Apple should think bold and make a play for a company like Adobe or Yahoo. Back in 2012, Apple was sitting on $117 billion in cash reserves. That number has climbed to $159 billion, according to one recent estimate. As you’ll see, our revised list hasn’t changed much since 2012. Take a look:
Merge with DisneyApple and Disney have a long history together with Steve Jobs having co-founded Pixar Animation Studios in 1986. In 2006, its acquisition by Disney was completed. In Disney, Apple would gain an immense film library, and own a stake in a number of television networks, including ABC and ESPN. The purchase would also give Cupertino a 33 percent stake in Hulu, which would be a great way to reenergize the Apple TV.
- Pros: Film library and TV holdings are expansive.
- Cons: Very expensive, and would Apple really want to own theme parks?
Purchase a wireless companyIn August 2012, rumors were flying that Apple was considering a purchase of Sprint. That didn’t happen, and Sprint was bought by Japan’s Softbank in 2013. With Sprint unavailable, T-Mobile might work for Apple. Unfortunately, they better hurry because Sprint has shown interest in acquiring the fourth largest cellular carrier in the U.S.
- Pros: Would give Apple existing locations to sell their products.
- Cons: Would the U.S. government approve such a merger?
Buy NetflixA Netflix acquisition would make Cupertino a major player in the streaming video market, a place it have been slow to embrace. Additionally, Apple could use Netflix’s original programming arm to influence Hollywood more. It would also help Apple compete against Amazon and its streaming growing video streaming business.
- Pros: Instant library, more influence in Hollywood.
- Cons: Few, especially when you consider Netflix’s falling stock price.
Buy DirecTVIn a perfect world, Apple should buy Comcast. Unfortunately, the cable giant is probably a little bit too large for Apple to acquire. The No. 1 cable company in the U.S. is likely to get even bigger thanks to its announced merger with Time Warner Cable. With DirecTV, Apple could revamp its Apple TV interface, and place the "hobby" device in millions of new homes.
- Pros: It would prove Apple is serious about being a player in home entertainment, and give it more leverage when dealing with content providers.
- Cons: It could cause a war with cable providers.
Pay more in taxesLike many U.S. companies, Apple parks billions of dollars in offshore accounts. This may be legal, but it doesn’t sit well with many. By bringing more cash home, Apple could solicit some good will, and add to the U.S. treasury.
The floor is yours. How would you spend Apple's cash?
- Pros: More taxes for the U.S. government.
- Cons: Less money for Apple to spend on new products.