JPMorgan analysts: Apple should buy Blizzard, Netflix or Sonos to reassure investors
Apple investors are worried about declining stock prices and may insist on using the company's free money to make acquisitions. According to analysts of the investment bank JPMorgan , Netflix , Blizzard and Sonos may be among the suitable acquisitions for Apple , Bloomberg writes .
Why Apple investors are unhappy
Since October 2018, when Apple shares set a record in value, their price fell by more than 25%. This contributes to the declining demand for new iPhone. In a recent report, Apple announced the first drop in sales since 2001 - all because of worsened sales of smartphones.
Given this fact, as well as Apple’s having $ 130 billion of free money in accounts — apart from an annual profit of $ 45 billion after deducting dividends — the company's investors hope that the company uses its resources to protect the business.
JPMorgan analyst Samik Chatterjee (Samik Chatterjee) in his note indicates that currently there are not accurate data on upcoming acquisitions, but such transactions could help the company to raise the value of the shares.
Who can buy Apple, and is it really?
In turn, the purchase of a company from the field of game development will allow Apple "to use the turn of this industry towards the mobile segment." This should contribute to the next round of changes in the requirements for the hardware of games. According to analysts, Activision Blizzard could be the best choice for Apple. Its capitalization is $ 35.1 billion.
According to analysts at JPMorgan, video games, video content and smart home gadgets are on the list of Apple’s strategically important industries - it is development in these areas that will promote growth and make more active use of the existing customer base.
Netflix video streaming service was recognized as “the best choice for Apple from a strategic point of view,” since its acquisition will allow the company to grow more actively at the expense of content consumers on mobile devices. However, it is noted that it will not be so easy to buy Netflix - the company's capitalization is $ 148.4 billion.
Smart home speakers allow you to “focus on high user engagement,” and are also useful for “promoting the Apple Music service.” According to analysts, at the moment Apple lags behind competitors in the category of products for smart home. At the same time, Sonos products have an excellent reputation in the market and high user loyalty, its gadgets are perceived as more premium competitors to Amazon Alexa and Google Home. In addition, the company sells its devices worldwide. Its capitalization is "only" $ 1.2 billion.
Despite the recommendations of analysts and investors' concerns, usually Apple is not very actively invested in purchases. Only two cases of acquisitions made by public companies are known: in 2014, Beats Electronics was bought for $ 3 billion, and Apple along with other companies participated in the takeover of Toshiba Memory Corp for $ 18 billion.
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