The US president’s corporate tax cut may be put to good use by Apple which is looking to take advantage of the initiative in the acquisition of entertainment company, Netflix. Previous news suggests that Apple will unveil a video subscription product to compete with Netflix but this seems to be a bit bogus if Citi analyst comments are anything to go by. Citi analysts, Jim Suva and Asiya Merchant believe that there is a strong possibility that Apple will acquire Netflix and with the current tax rules, Apple can transfer about $220 billion (about Rs. 14 lakh crores) cash to the United States.
Suva and Merchant said
“The firm has too much cash – nearly $250 billion (roughly Rs. 15.9 lakh crores) – growing at $50 billion (roughly Rs. 3.18 lakh crores) a year. This is a good problem to have,”…”Historically, Apple has avoided repatriating cash to the US to avoid high taxation. As such, tax reform may allow Apple to put this cash to use. With over 90 percent of its cash sitting overseas, a one-time 10 percent repatriation tax would give Apple $220 billion (roughly Rs. 14 lakh crores) for mergers and acquisitions (M&A) or buybacks,”
It appears that Apple has struggled a bit with iTunes as users seem to prefer the likes of Netflix, Amazon or Hulu to see TV shows. As of now, Apple has signed the likes of Jamie Erlicht and Zack Van Amburg to spearhead its Hollywood push and the company is also working on a new TV show which will feature celebrities like Reese Witherspoon and Jennifer Aniston. Apple is trying hard to compete with Google’s Youtube and Amazon which are having a good time presently.