While delivering remarks at South by Southwest in Austin, Apple Internet software and services chief Eddy Cue created a bit of a stir when he indicated the company isn’t in the market to acquire Netflix, Inc. (NASDAQ:NFLX). It’s long been speculated that Apple will eventually make a big splash with a huge media acquisition to further bolster its market presence, but we can count one observer in the camp of those that feel the company is on the money with not pursuing Netflix and others.
CNBC‘s Anita Balakrishnan offers up her take on why Apple’s reasoning is correct.
Critics of Apple have accused the company of failing to innovate, relying on iPhone addiction to drive its business while letting consumers’ living rooms get taken over by Netflix and Amazon’s Alexa.
I don’t think Apple has overlooked these criticisms. Instead, I think the company has a long-term plan to stay out of the war for consumers’ attention — and is actually moving away from plowing everything through our iPhones.
By making its technology more passive, Apple is sacrificing short-term sales momentum to spare us the omnipresent competition for our attention.
As Balakrishnan indicates, while Apple may not have the ‘binge-watch’ factor inherent to Netflix, that doesn’t mean that the company is being bypassed by hipper rivals. Instead, Apple’s products have become so far ingrained in lifestyles that they’re simply there whenever users want them, and that’s usually quite often.
Despite not having plans for a huge media acquisition, the company isn’t bypassing its own content ambitions. The company continues to invest in ways to bolster its own original content lineup, and success in that space could lead to a snowball effect of further growth in the streaming space.
Netflix, Inc. shares were trading at $322.03 per share on Tuesday morning, up $0.73 (+0.23%). Year-to-date, NFLX has gained 67.76%, versus a 4.80% rise in the benchmark S&P 500 index during the same period.