That Apple has always been "left over" is not something that at this point will surprise anyone, however, that attitude seems to have been accentuated in recent times in such a way that the company would have settled into the "culture of arrogance", a position that would be holding back and even preventing major acquisitionss that would improve the company's video streaming plans.
A report published by Bloomberg delves into Apple's M&A practices vis-à-vis other companies, highlighting the "arrogance" that Apple displays in such negotiations.
Apple prefers to do to buy
According to different sources consulted by Bloomberg who have worked with Apple in the field of marketing and advertising, the company repeatedly struggles to get big business off the ground, despite a "series of quirks", including his refusal to work with investment bankers, his inexperience in large acquisitions, and a blatant "risk aversion." »
Apple is more interested, and capable, in creating their own services rather than buying them directly from a competitor, with occasional exceptions such as the 2014 acquisition of Beats and the subsequent launch of Apple Music.
"The first step in M&A is to have some conviction about what you want to do," said Eric Risley, a managing partner at Architect Partners LLC that has negotiated deals with Apple. "Apple, probably more than most, feels that it is very capable of building things" rather than buying them, he added. An Apple spokesperson declined to comment.
According to several analysts and investors consulted, Apple's next big move should be the acquisition of a streaming video service. The company has begun making progress to strengthen the original audiovisual content division on Apple Music, with Carpool Karaoke: The Series y Planet of the Apps that will arrive this next spring, but analysts say you need something "similar to Netflix or Amazon Prime Video."
Apple will need a bigger deal than the Beats purchase in 2014
Erick Maronak, chief investment officer at Victory Capital Management, notes that Apple "is going to have to look for something bigger than a Beats-like acquisition" to reach the goal of $ 50.000 billion in service revenue. This could include other possible very media acquisitions such as Walt Disney or Tesla, as Baird analyst William Power observes.
Another logical objective, and one that has already come to the fore on different occasions, is Netflix, every time something like the company "needs at least one big online video acquisition" is mentioned.
But even here, some analysts and investors are advocating a big takeover, especially in online video streaming. Apple has begun distributing videos through the music service, and sharing other video providers on its mobile TV app, but it does not have a service similar to Netflix or Prime Video from Amazon.com Inc.
On Friday, Sanford C. Bernstein analyst Toni Sacconaghi said Apple needs at least one big acquisition in online video. To reach its $ 50.000 billion goal, the company must find an additional $ 13.000 billion in service revenue over the next four years, beyond what it can generate. Netflix Inc. ended 2016 with sales of less than $ 9 billion, so even buying that business may not be enough, the analyst said.
Apple's strategy is not always valid
Apple's procurement team consists of a dozen people led by Adrian Perica. Most of the offers "are carried out at the behest of the company's engineers.", so this team meets with Apple engineers to advise them on what potential acquisition targets are attractive.
His strategy works well for small businesses, but not so much for big deals:
Apple refuses to work with investment bankers in an attempt to work directly with the other company's management teams. This results in an air of arrogance, according to Eric Risley, who has negotiated deals with Apple, further stating that "they are used to being able to break through and get an attractive economy."
