Premium smartphones maker, Apple Inc. has been predicted to possibly buy Netflix contrary to reports of the iPhone maker launching its video subscription product in 2018.
Analysts from Citi said the smartphones giant could possibly take advantage of US President Donald Trump’s corporate tax cut to acquire the entertainment company.
According to Citi analysts, Jim Suva and Asiya Merchant, there is a 40 percent likelihood that Apple will acquire Netflix.
They posit that under the new taxing rules, Apple will be able to repatriate about $220 billion in cash to the US.
“The firm has too much cash – nearly $250 billion – growing at $50 billion a year. This is a good problem to have,” Suva and Merchant were quoted as saying.
“Historically, Apple has avoided repatriating cash to the US to avoid high taxation. As such, tax reform may allow Apple to put this cash to use.
“With over 90 percent of its cash sitting overseas, a one-time 10 percent repatriation tax would give Apple $220 billion for mergers and acquisitions (M&A) or buybacks,” they added.
A report in Business Insider Australia said that iTunes has been a huge hit for the company, but viewers have migrated increasingly to services like Netflix, Amazon or Hulu to watch their favourite shows leaving Apple struggling to offer a compelling TV or movie offering.