I’m surprised it hasn’t happened. It would've made an especially good business case during COVID when Disney's stock price was even lower and Apple was flushed with cash. Still, Disney is ticking at under a $100. I personally think that long-term that's a steal. Better leadership and funding could unlock the company's potential.
Let's go over some data and some hypotheticals.
They could merge Disney Plus and Hulu (once Comast sells their stake next year) with Apple TV+. ESPN and ABC News could be integrated with the Apple TV app (and the others) and Apple News, and the theme parks could then be flushed with Apple’s cash to expand them to a level they need to be to deliver a stellar product to as many people as possible to promote all aspects of the business.
As Bob Iger has said and pretty much anyone on these forums could tell you, it's a bad business decision long-term to just endlessly raise prices. While I don't necessarily think it should be a magnitude cheaper than it presently is, the mindset to just price people out to raise margins may make sense on paper, but it is myopic when getting as many people into the park not only increases brand synergy by promoting other divisions of the company, but it creates a new returning customer that is loyal to the brand for what amounts to a lifetime.
A better product (most notably at WDW) would be able to do that even easier. I also think that there's a strong case that adding a third gate to Disneyland Resort would make it more of a destination. It already has the vastly superior castle-park. There just isn't enough capacity for the demand especially at WDW, so I say drop $2 billion on every park in America and Europe (adjusting accordingly if there isn't enough demand at whatever that point is) and let induced demand fill the parks further, increasing profit margins and brand exposure.
Stock buybacks and dividends, but especially stock buybacks can only go so far. They might as well invest more of that money into proven businesses.
Apple is also about to lose so much “minimal effort” revenue due to Europe's long-overdue consumer-focused legislation that will lower their cut of the App Store revenue, allow sideloading of apps through 3rd party app stores (though this will likely only have a minimal impact), deemphasize the importance of iMessage by allowing other default message app options, open up 3rd party browsers without WebKit requirements, licensing revenue through accessories with Apple's proprietary lightning cable that will be replaced by the far better USB-C standard, allowing 3rd party apps to be equally integrated as Apple’s own, and more. That's many billions of dollars a year right there.
Personally, I think those changes and more will make the iPhone more attractive and a better product overall so it could actually increase sales, but there will be an immediate revenue gap.
Apple has just been abusing its market position as a duopoly with Google's more open Android ecosystem and a monopoly on its own IOS ecosystem to effectively tax people just because they could, as there is only one other option on the market. Tech companies work in a different way than the monopolies of old and antitrust legislation simply hasn't adapted in the US due to a combination of effective lobbying efforts on their behalf and an unwillingness to compromise in both parties, but the present FTC is beginning to go after monopolistic behavior with companies that abuse their market power, so I sense the tide is shifting.
Apple doesn't rely on ad revenue and data like many tech companies such as Google and Facebook, so it has been more insulated from European data privacy laws as well as the global drop in advertising revenue, but there are new headwinds. Apple is not going anywhere and I don't think they'll be so far off from their peak revenues, but the days of their hyper-growth with their legacy businesses are likely over.
Apple is amidst a pivot to get India to produce over a quarter of their iPhones by 2030 (alongside other countries too). That is also the largest market Apple has to grow their products in as the US most definitely but even Europe has mostly tapped out. India is expected to have mind-boggling growth over the next 20 years, though it could be hampered by Modi's very religious government, and while it's unlikely to be quite on the level of China's growth over the past 30 years, it should be one of the largest increases in wealth the world has ever seen. With that being said, I don't necessarily think global sales can come fast enough much like Netflix has learned which is an infinitely cheaper product to offset a plateauing in wealthier markets.
I think the age of someone getting a new phone every year is also over (though I have no data to back that up), though given the more durable nature of recent phones alongside the minimal changes each year has had, hurts their margins in saturated markets like America. It’s more like every 2-3 years at a minimum now even if someone wants the latest and greatest.
The Apple AR thing will be a big deal in 8-10 years when it is able to be in glasses, as that’s the estimated timeline Apple has put on it, but in the meantime, it will be a very expensive product that’s cool, but will be more so used in professional settings, or one per household for those that can afford it if it provides value. That's a big if.
I personally don't think the plans are laughably bad like Facebook's metaverse nonsense, but I think it will need more time, and reports that Tim Cook is trying to expedite its release lends credence to that angle. It probably won’t be going mainstream like the Apple Watch in my view, but it’s a potentially very important product to lay the groundwork for the future, so while I honestly don't think it will be all that successful in its current form, I imagine if it is just able to fund R&D it could be viewed as a success.
Apple tried doing self-driving only to realize it was 20 years away so now they've pivoted to developing an expensive luxury car through a partnership with an existing company such as Volkswagen, Hyundai, or Lucid Motors. It will be an EV but that’s not a huge differential given every company is now pivoting to that. I think Apple Carplay's overhaul may be even more important to the company while the Apple Car remains a profitable niche division, but that's purely speculation and years away.
I think The Walt Disney Company has so much untapped potential. They’ve always underdelivered on quality for live-action films, thus, minimizing their potential returns and almost guaranteeing a string of bombs, but their animated films need a boost too. A different perspective from Apple could do just that.
The only thing I don’t like is how much bigger that would make Apple, but honestly, like Comcast improving Universal Studios' parks, I think Apple might be able to do that too.
Again, I am VERY pro-anti-trust legislation and believe the FTC and the federal government should have enforced the laws far better for decades, so don't take this as me liking the idea of a mega-conglomerate getting even bigger, so I'm not necessarily for this for that reason. That being said, it also wouldn't be a horizontal merger, but I am really interested in just discussing the business side and how this could affect the parks rather than the societal and moral issues involved.
Just as a business case, I think as far as mergers go, it definitely wouldn't end up like the disastrous Time Warner/AT&T deal that appeared DOA from before it started given AT&T's pathetically intransigent leadership, so it's compelling to ponder how it would play out with Apple being a purchaser of Disney.
A lot of the things I've cited are fact-based and many others are purely based on speculation and my take on the state of Apple, so don't view this as any more than a fun discussion.
This is most definitely not the subject I am most informed on (unlike economics or public/foreign policy), so completely destroy my thoughts if you'd like.
I know it has been rumored/speculated for a while now, but I'm curious to see how you all would think the business ramifications would play out.
Let's go over some data and some hypotheticals.
They could merge Disney Plus and Hulu (once Comast sells their stake next year) with Apple TV+. ESPN and ABC News could be integrated with the Apple TV app (and the others) and Apple News, and the theme parks could then be flushed with Apple’s cash to expand them to a level they need to be to deliver a stellar product to as many people as possible to promote all aspects of the business.
As Bob Iger has said and pretty much anyone on these forums could tell you, it's a bad business decision long-term to just endlessly raise prices. While I don't necessarily think it should be a magnitude cheaper than it presently is, the mindset to just price people out to raise margins may make sense on paper, but it is myopic when getting as many people into the park not only increases brand synergy by promoting other divisions of the company, but it creates a new returning customer that is loyal to the brand for what amounts to a lifetime.
A better product (most notably at WDW) would be able to do that even easier. I also think that there's a strong case that adding a third gate to Disneyland Resort would make it more of a destination. It already has the vastly superior castle-park. There just isn't enough capacity for the demand especially at WDW, so I say drop $2 billion on every park in America and Europe (adjusting accordingly if there isn't enough demand at whatever that point is) and let induced demand fill the parks further, increasing profit margins and brand exposure.
Stock buybacks and dividends, but especially stock buybacks can only go so far. They might as well invest more of that money into proven businesses.
Apple is also about to lose so much “minimal effort” revenue due to Europe's long-overdue consumer-focused legislation that will lower their cut of the App Store revenue, allow sideloading of apps through 3rd party app stores (though this will likely only have a minimal impact), deemphasize the importance of iMessage by allowing other default message app options, open up 3rd party browsers without WebKit requirements, licensing revenue through accessories with Apple's proprietary lightning cable that will be replaced by the far better USB-C standard, allowing 3rd party apps to be equally integrated as Apple’s own, and more. That's many billions of dollars a year right there.
Personally, I think those changes and more will make the iPhone more attractive and a better product overall so it could actually increase sales, but there will be an immediate revenue gap.
Apple has just been abusing its market position as a duopoly with Google's more open Android ecosystem and a monopoly on its own IOS ecosystem to effectively tax people just because they could, as there is only one other option on the market. Tech companies work in a different way than the monopolies of old and antitrust legislation simply hasn't adapted in the US due to a combination of effective lobbying efforts on their behalf and an unwillingness to compromise in both parties, but the present FTC is beginning to go after monopolistic behavior with companies that abuse their market power, so I sense the tide is shifting.
Apple doesn't rely on ad revenue and data like many tech companies such as Google and Facebook, so it has been more insulated from European data privacy laws as well as the global drop in advertising revenue, but there are new headwinds. Apple is not going anywhere and I don't think they'll be so far off from their peak revenues, but the days of their hyper-growth with their legacy businesses are likely over.
Apple is amidst a pivot to get India to produce over a quarter of their iPhones by 2030 (alongside other countries too). That is also the largest market Apple has to grow their products in as the US most definitely but even Europe has mostly tapped out. India is expected to have mind-boggling growth over the next 20 years, though it could be hampered by Modi's very religious government, and while it's unlikely to be quite on the level of China's growth over the past 30 years, it should be one of the largest increases in wealth the world has ever seen. With that being said, I don't necessarily think global sales can come fast enough much like Netflix has learned which is an infinitely cheaper product to offset a plateauing in wealthier markets.
I think the age of someone getting a new phone every year is also over (though I have no data to back that up), though given the more durable nature of recent phones alongside the minimal changes each year has had, hurts their margins in saturated markets like America. It’s more like every 2-3 years at a minimum now even if someone wants the latest and greatest.
The Apple AR thing will be a big deal in 8-10 years when it is able to be in glasses, as that’s the estimated timeline Apple has put on it, but in the meantime, it will be a very expensive product that’s cool, but will be more so used in professional settings, or one per household for those that can afford it if it provides value. That's a big if.
I personally don't think the plans are laughably bad like Facebook's metaverse nonsense, but I think it will need more time, and reports that Tim Cook is trying to expedite its release lends credence to that angle. It probably won’t be going mainstream like the Apple Watch in my view, but it’s a potentially very important product to lay the groundwork for the future, so while I honestly don't think it will be all that successful in its current form, I imagine if it is just able to fund R&D it could be viewed as a success.
Apple tried doing self-driving only to realize it was 20 years away so now they've pivoted to developing an expensive luxury car through a partnership with an existing company such as Volkswagen, Hyundai, or Lucid Motors. It will be an EV but that’s not a huge differential given every company is now pivoting to that. I think Apple Carplay's overhaul may be even more important to the company while the Apple Car remains a profitable niche division, but that's purely speculation and years away.
I think The Walt Disney Company has so much untapped potential. They’ve always underdelivered on quality for live-action films, thus, minimizing their potential returns and almost guaranteeing a string of bombs, but their animated films need a boost too. A different perspective from Apple could do just that.
The only thing I don’t like is how much bigger that would make Apple, but honestly, like Comcast improving Universal Studios' parks, I think Apple might be able to do that too.
Again, I am VERY pro-anti-trust legislation and believe the FTC and the federal government should have enforced the laws far better for decades, so don't take this as me liking the idea of a mega-conglomerate getting even bigger, so I'm not necessarily for this for that reason. That being said, it also wouldn't be a horizontal merger, but I am really interested in just discussing the business side and how this could affect the parks rather than the societal and moral issues involved.
Just as a business case, I think as far as mergers go, it definitely wouldn't end up like the disastrous Time Warner/AT&T deal that appeared DOA from before it started given AT&T's pathetically intransigent leadership, so it's compelling to ponder how it would play out with Apple being a purchaser of Disney.
A lot of the things I've cited are fact-based and many others are purely based on speculation and my take on the state of Apple, so don't view this as any more than a fun discussion.
This is most definitely not the subject I am most informed on (unlike economics or public/foreign policy), so completely destroy my thoughts if you'd like.
I know it has been rumored/speculated for a while now, but I'm curious to see how you all would think the business ramifications would play out.
