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Unlikely that Apple will buy EA

by on06 May 2009


Better investment is to buy WB Music, instead

All of the movement to Apple has fueled the speculation that Apple might be strengthening its position in the video game arena with the addition of a variety of new talent from both AMD/ATI and Microsoft. We have been bombarded with whispers that Apple is considering making an offer to buy Electronic Arts.

While some of these rumors might have a shred of truth in them, we have to weigh in our opinion by saying that if Apple is really considering such a move, it would likely be one of the biggest missteps in the company’s history and we consider it highly unlikely.

As some have pointed out, what would be a better value is for the company to somehow acquire Warner Bros. Music because that way they would control the rights to 20 percent of all of the recorded music. This would be a much better value and offer the ability to yield immediate dividends by virtue of the fact that it would be a natural fit to plug this into iTunes and expand the way in which they can control the price as well as the way in which the music is delivered.

Much of this speculation also goes with the possibility that Apple is working on a larger device that is targeted at social networking as well as gaming. This is the reason that Apple has been acquiring all of the new talent. Some believe that this 10-inch screened device might be the ideal size to introduce a next generation portable gaming platform that would set it apart from anything else on the market today. We speculate that this is, in fact, possible, but without at least some netbook and tablet computing features, we think that the possibility of a device this size being successful based solely on a social networking and gaming business model could be trick for a company that has never really previously played successfully in this field.
Last modified on 06 May 2009
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