INSUBCONTINENT EXCLUSIVE:
investors are likely looking for the company to use its massive cash pile to make acquisitions, and names like Netflix Inc., Activision
are among the companies that JPMorgan sees as strong strategic fits.Shares of Apple have lost nearly 30 percent from an October record,
dropping on concerns over the demand prospects for its key iPhone product line
In its most recent quarterly report, the company posted its first holiday-quarter sales decline since 2001, a drop that was almost entirely
due to lower smartphone sales
The stock rose 1 percent in early trading on Monday, on track for its fourth straight daily gain.Given this environment, and given that
Apple has roughly $130 billion in net cash -- along with an average of $45 billion in cash flow generated every year after dividends --
investors are likely hoping that Apple "uses its balance sheet strength to insulate the business against often-seen disruptions in the
technology landscape," analyst Samik Chatterjee wrote
JPMorgan has an overweight rating on Apple stock, along with a $228 price target.Chatterjee noted that the prospect of such deals was
speculative and theoretical
Apple didn't immediately return a request for a comment, and neither did Netflix, Activision or Sonos.In JPMorgan's view, video gaming,
video content and smart home speakers are among the industries with "the most strategic value," for Apple, "providing potential growth
opportunities to leverage services over a wider installed base."Netflix was deemed "the best strategic fit" for Apple in the content
category, "although we appreciate a combination is less likely as Netflix is unlikely to be a seller for a modest premium." The
video-streaming giant has a market capitalization of $148.4 billion.Video content provides "leverage to rapid growth in content consumption
on mobile" and Netflix has "an established platform to accelerate Apple's nascent investments in original content," Chatterjee wrote to
Shares of Netflix rose 1.3 percent on Monday.The speaker category has a "focus on high engagement with customers," and it offers "synergies
in driving Apple Music services."Apple is "currently lagging competitors in the smart home category," JPMorgan wrote, referring to the
company's HomePod product line
Sonos, in contrast, has a "differentiated position as a premium home speaker system relative to Amazon Alexa and Google Home," along with
"strong loyalty among current customers and [a] robust international presence."Sonos had a market cap of $1.2 billion, as of Friday's close
The stock rose 6 percent on Monday, its seventh straight daily gain -- the longest such streak in its history.For Apple, a video-game
acquisition would offer "leverage to an industry rapidly transitioning to mobile," while the "hardware capabilities for high-end gaming
potentially [support] a replacement cycle."Among targets mentioned in press reports, JPMorgan wrote, "we find Activision Blizzard to be the
best strategic fit" for Apple
Shares of Activision rose 0.7 percent
The company had a market cap of $35.1 billion through Friday.(Except for the headline, this story has not been edited by
TheIndianSubcontinent staff and is published from a syndicated feed.)
