Apple Inc. is Tnot a firm that seems to like making big and bold acquisitions. The firm prefers to buy “unknown” tech startups and incorporate their technology into its own products. Buying small firms helps Apple to maintain its aura of innovation because those small startups do not have a strong brand that might compete with Apple’s brand image. his explains why Apple has refused to acquire Tesla Motors or buy Twitter. However, an analyst thinks that Apple should break its own rule and buy GoPro Inc .
CNBC reports that Ross Gerber, CEO and president of Gerber Kawasaki opined that Apple would be making a very smart move if it decides to buy GoPro now. Shares of GoPro are currently under pressure as the firm fights to turn its cameras from niche products that appeal to action sports’ fans to mainstream consumer products that everybody buys and uses.
Apple could find GoPro Attractive
The shares of GoPro fell to a new 52-week low of $27.52 in yesterday’s session. GoPro stock has lost 68.7% in the last one year and the stock has lost 53.6% in the year-to-date period. At market close yesterday, GoPro has a market cap of $4.07B while Apple has cash reserves above $200B. Retail investors already think GoPro is a good buy on the dip.
In essence, if Apple wants to buy GoPro, it has more than enough financial muscles to pull off the deal. Gerber notes “GoPro has a unique position in the market and they should be bought by Apple”. He goes on to say, “if you are thinking long-term and you’re a growth investor, I think this is finally the entry point we’ve been waiting for.”
Secondly, Apple has been trying very hard to create new product lines for making money instead of relying solely on iPhones as its moneymaker. The firm has launched the Apple Watch but the jury is still out on its ability to jumpstart growth for the tech giant. The iPad is losing ground to Microsoft’s Surface, Project Titan is still a couple of years away, and Apple TV isn’t much different from its rivals.
However, Apple can rethink the market for digital cameras and GoPro has already set the ball in motion – the market has high hopes for Hero+. Daniel Ives, an analyst at FBR Capital Markets says, “I do believe as we go down the next year or two Apple does get more involved in action cameras and potentially we could be viewing GoPro as an acquisition candidate for an Apple”.
A GoPro Buyout is not likely
Apple doesn’t like making big and bold buyouts, but GoPro currently commands a price that won’t leave a dent on Apple’s financials. More so, GoPro offers Apple a chance to add a growing product segment to it family. However, the general feeling on the market is that Apple won’t be making a deal to buy GoPro.