According to Needham analyst Laura Martin, Apple should consider buying Disney to boost its streaming content library. Martin believes that a deal between the two companies could increase Apple's value by up to $631 billion, or 25% of its current market capitalization of $2.5 trillion, if funded by Apple stock. She argues that strong distribution and world-class content are complementary networks and that together, they are worth more than they are separately. Apple's ability to monetize its 1.25 billion customers who have 2 billion active Apple devices being used for an average of four hours per day makes it easier to attract new customers, and a vast content library from Disney+ would raise the exit barrier even higher.
Both companies have rabid super-fans, premium pricing power, brand-first corporate decision making, global scale, and a base of wealthy consumers. Disney purchased Pixar from Apple in 2006 for $7.4 billion, and Disney CEO Bob Iger had a close relationship with the late Apple founder Steve Jobs. Despite rumors, Iger shot down the idea of selling Disney to Apple, and Apple typically shies away from mega-deals.
However, Martin thinks Apple needs to get serious about its content streaming business to bring more customers into its ecosystem, and it could do that with the help of Disney. She believes that Apple is doing a mediocre job of streaming, and owning Disney's intellectual property, characters, and film franchises in perpetuity would lower Apple's cost. While the idea of a merger may be a tough pill to swallow, Martin argues that both companies' key assets and value-drivers could become stronger and not diluted if they are put together.