Apple Inc (NASDAQ: AAPL) made a big mistake by not acquiring the subscription video-on-demand company Netflix Inc (NASDAQ: NFLX) when it had the chance, Wedbush analyst Daniel Ives told Yahoo Finance. What Happened: Ives, who has an Outperform rating Apple, said that not buying Netflix was the “biggest strategic mistake” in his opinion over the last 10 to 12 years by deceased founder Steve Jobs and current CEO Tim Cook.
Ives referred to the relatively thin content choices on Apple TV+ in comparison with competitors such as Netflix and Walt Disney Co’s (NYSE: DIS) plus service and said it was akin to owning a mansion but having little to furnish it with.
“That’s the problem when it comes to this arms race we’re seeing especially with Disney and of course Netflix at top of the heap.”
Why It Matters: The purchase of Netflix would have given Apple a huge stake in the video streaming market and removed the need to build its own content library from scratch, noted Yahoo Finance.
Apple TV+ features include “The Morning Show”, “Ted Lasso,” and “For All Mankind.”
Ives said that the way for Apple to stop being the laggard is to purchase a Hollywood studio.
“We’ve talked about an MGM, a Lionsgate, an A24, otherwise they’re going to continue to sort of be on the outside looking in,” said Ives.
“And that’s why I think this is something they’re going to be forced into…because it’s all about content.”
Netflix co-founder Marc Randolph said this month that the iPhone maker has “no excuse” for not finding footing in the SVOD space and is “still not in it with both feet.”
Randolph had kinder words for Disney and said he had “the deepest respect” for the company right now.
Price Action: Apple shares closed nearly 0.1% lower at $125.86 on Tuesday and fell almost 0.3% in the after-hours session. On the same day, Netflix shares closed 2.32% in the regular session and fell nearly 0.2% in extended trading.
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