BREAKINGVIEWS-Apple's TV quest probably could do with some help
(The author is a Reuters Breakingviews columnist. The opinions expressed are his own.)
By Robert Cyran
NEW YORK, May 14 (Reuters Breakingviews) - Apple’s (AAPL.O) opportunity in TV is pretty obvious by now. The simplification of frustrating and complex on-screen guides and remote controls is a task ripe for the gadget king, and one that Steve Jobs indicated to his biographer he had tackled. And while Apple isn’t known for big acquisitions, smaller, targeted ones have helped in past conquests. The scope of the TV market also would seem to lend itself to some outside help.
That’s probably one reason shares in luxury German TV maker Loewe (LOEG.DE) spiked after a blog post said Apple had offered to buy the company. The site in question has a spotty record and a Loewe spokesperson told a local IT journal there was “absolutely nothing” to the story. Then again, German corporate denials of merger talks are often as reliable as most blog posts.
Apple has turned TV into something decidedly more than a hobby. Its Apple TV gadget allows users to stream Netflix (NFLX.O), YouTube and content from iTunes. But it falls well short of transforming the industry. It also doesn’t live up to Apple’s aesthetic or easy set-up standards.
In that context, buying Loewe would make some sense. Unlike Bang & Olufsen’s (BO.CO) gear, where playful form can trump function, Loewe’s design is pure minimalism. They are also just what a customer might expect to pull out of a sleek white box with a bitten-apple logo. Jobs was a life-long fan of German design, driving Mercedes, admiring Braun and adoring his Miele washing machine.
For about 75 million euros, Loewe’s market capitalization after the spike, Apple could find plenty of value. Loewe’s designers, hardware engineers, intellectual property and television models probably would fit nicely with Apple’s storehouse of expertise. And the sum is a rounding error to Apple and its $110 billion of cash and investments. Even if Loewe has nothing to do with Apple’s future, the buzz on Monday reinforces the idea that TV almost certainly does.
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- Shares in Germany’s Loewe rose 24 percent after a blog, AppleInsider, reported that Apple had offered to buy the German maker of high-end televisions.
- A spokesperson for Loewe told Germany’s Heise Online that there “was absolutely nothing” to the report.
- Reuters: Shares in TV maker Loewe jump on Apple bid talk [ID:nL5E8GE236]
- For previous columns by the author, Reuters customers can click on [CYRAN/]
(Editing by Jeffrey Goldfarb and Martin Langfield)
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