Apple (AAPL) can buy Disney (DIS) — at the very least in keeping with one media analyst.

Following Apple’s debut of its Imaginative and prescient Professional headset at its Worldwide Developer Convention (WWDC) on Monday, Needham analyst Laura Martin doubled down on her take that the tech large ought to purchase the leisure firm.

“AAPL wants to purchase DIS to drive adoption of Imaginative and prescient Professional,” she wrote in a observe revealed on Tuesday. “The truth that DIS CEO Bob Iger was on stage touting AAPL’s Imaginative and prescient Professional goggles demonstrates the compelling strategic match between DIS’s content material and AAPL’s wearable expertise.”

“At $3,500, we anticipate adoption to be gradual. Nonetheless, if AAPL buys DIS, its storytellers might create distinctive content material to drive shopper adoption of AAPL’s Imaginative and prescient Professional goggles,” the analyst added.

Disney’s inventory shot up 4% as quickly as Iger started talking at Monday’s occasion. The chief touted a brand new partnership between the 2 corporations centered on the headset. Customers will be capable to watch motion pictures and TV exhibits from Disney+, along with a extra immersive sports activities viewing expertise.

Disney shares have since leveled off, however the optimistic transfer to the upside feeds into longstanding rumors surrounding a possible merger between the 2 corporations.

Martin defined how unique content material shall be key to driving gross sales of the brand new headset, referencing how Steve Jobs was capable of safe iPod adoption by having music corporations promote him particular person songs.

“No one would have purchased an iPod until there was content material on it to drive adoption,” she stated. “[The VR headset] is not a large product, so it’s important to have content material that will get individuals to wish to use it.”

Martin emphasised the profit to Apple could be securing, not solely the IP, but in addition the storytellers.

“You possibly can’t pressure Disney content material makers to do something until you personal them,” she stated, disregarding recommendations a partnership would suffice versus full-blown possession given Disney would wish to shield its P&L (earnings and losses) and maximize income.

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“My thought could be it might be unique to this one platform,” she stated, including, “It is value extra to Apple to have these storytellers and inform tales particularly for an iPhone or an iPad or a watch.”

Martin cited Disney’s lack of a successor to Iger, coupled with its shrinking linear tv enterprise, as key catalysts for a merger, including Apple’s $90 billion in annual free money circulation would assist fund content material creation.

Nonetheless, an enormous query mark facilities across the parks enterprise, along with regulatory hurdles.

“I do not assume Apple desires the parks, however I believe the parks are actually a great enterprise standalone. Personal fairness or one other form of REIT or actual property purchaser could be a logical place,” she stated.

When it comes to regulation, the analyst stated it is not an impossibility for a deal of this magnitude to obtain approval.

“The best way the legal guidelines are written right here, it is not anti-competitive to have a {hardware} firm, or let’s name it a distribution firm, personal a content material firm,” she stated, referencing how Comcast was capable of merge with NBC, which was an analogous dimension to Disney on the time, along with Amazon’s current buy of MGM for $8.45 billion in 2021.

“It’s doable the regulators would attempt to really block it. However when you go to courtroom, all of the precedents permit content material to be purchased by distribution,” she stated.

Alexandra Canal is a Senior Reporter at Yahoo Finance. Observe her on Twitter @allie_canal, LinkedIn, and e mail her at [email protected]

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