Apple has decided to spend approximately $163 billion in cash after numerous speculations about a big acquisition.
The biggest company’s take over was headphone producer Beats Electronics Inc, and its price was $3 billion. The second largest take over was Next, the firm that brought back Steve Jobs to Apple. When the company has clearly checked in on a few interesting bigger targets, the management decides to go in an opposite direction.
The first definitely was original content. The company has already defined its wishes to expand original offerings because they have a big potential for earnings. Furthermore, Apple announced it would acquire Texture, a well-known magazine subscription service, for an undiscovered amount of money, still probably not too big.
The second important aim in this area was developing of Apple Music service. Spotify Technology Inc has significantly improved its selling, and the profit has constantly raised following the improvement. There are approximately 2 billion people all over the world who might be willing to pay for a music subscription, and the company has an opportunity to take advantage of that potential.
However, Spotify and Apple together have only hundred million of subscriptions at the time. Still, they believe the number will importantly grow in the near future.
Apple has introduced some significant changes with a desire to attract new subscribers. That also includes some new features, such as a possibility for intuitive distinguishing of videos and movies on the website. The Apple officials claimed the company is nor for quantity but quality. Bringing a larger amount of people to Apple Music service would certainly help Apple boost this part of a business, and the revenue would grow progressively.
The company acquired important competitors, including Walt Disney Co. and Netflix, but its strategy is not just simple spreading all over the market. So, it also includes making original movies and shows as well as bringing big-name talent to the company. This is probably a pat to the ultimate success.
Besides, one of the main company’s interests is developing a supply chain with its own industrial machinery. That way, Apple service would easily outgrow all competitors, and they would stay without a chance to fight back. The company would determinate directions of spreading according to its business interests, and they may include many different things, not just movies, and shows.
Currently, Apple is still growing but slowly. It would maybe go up faster if it introduces some changes, but the management has a final decision.