Apple Inc. (NASDAQ:AAPL) has been trying to infuse life into its Apple TV service as it seeks to create a more robust entertainment experience for users. When Apple started throwing hints about Apple TV last year, many tech writers noted that the firm is making a huge bet on the product as its continues to push for the growth of “Planet Apple“. Apple TV service is yet to live up to its potential, but the firm believes that the right mix of content would make it easy for the TV set top box to evolve into the hub for planet Apple.
Apple is reportedly putting feelers to the ground to acquire a media firm with the right media assets. The perfect media firm with the perfect blend of content that Apple needs is Time Warner and rumors have started to flow that the media firm might be up for sale. The New York Post reports that close sources have revealed that Apple is paying extra attention to a possible buyout of Time Warner
Does it make sense for Apple to buy Time Warner?
Apple Inc. (NASDAQ:AAPL) has built a reputation for being a picky buyer when it comes to acquisitions. The firm usually goes for small startups whose patents and talents can be absorbed into Apple’s core products. Apple also seems to shy away from making high-profile acquisitions in a bid to avoid buying a company with a strong brand image that will stand out in the Apple ecosystem. However, Apple did break its rule once when it bought Beats by Dr Dre for $3B in 2014.
There’s a first time for everything, and Apple can afford to buy Time Warner at its $57B market cap if Tim Cook and the board can find a good enough reason to make the deal. Apple currently seats on a cash reserve of almost $200B and it can easily fund the Time Warner deal in cash and stock.
Buying Time Warner will provide Apple TV with high value media assets that could push Apple TV to the forefront of digital entertainment. Some of the media assets that Apple will get from the deal include HBO, TBS, TNT, CNN, and Warner Bros studio. Apple and Time Warner have already worked together as the firm had a deal with HBO to launch HBO Now on its Apple TV service. In essence, an acquisition of Time Warner should propel Apple TV to the forefront of digital entertainment.
Buying Time Warner will create more problems than it solves
Apple (NASDAQ:AAPL) might be opening up the proverbial Pandora’s box if it goes ahead to buy Time Warner. For one, the firm would need to work out new business frameworks with cable and satellite service providers, it would need to cut new deal s to work out subscription models, and it would need to find a way to integrate TV ads into its offerings.
All the aforementioned issues are big issues that will require urgent attention and Apple will invariably be spending much time making Apple TV work at the expense of other core Apple products such as iPhone, iPad, and Macbook among others. Apple TV is just but one of the key products at Apple and buying Time Warner might not be the best way to disrupt the industry.
However, all the talk about Apple’s Interest in Time Warner are merely speculations and it is possible that nothing would come out of the stories. Nonetheless, it is obvious that Apple TV has not succeeded in disrupting the TV industry and Apple TV still has a longer way to go.