Apple-BlackBerry M&A Rumor Is A 'Partnership Play,' Not A Buyout

Apple Inc. (NASDAQ: AAPL) is rumored to be looking at BlackBerry Ltd (NASDAQ: BBRY) as its next acquisition target. There is at least one reason for Apple to pick up the firm, but Global Equities Research analyst Trip Chowdhry expects another outcome."I think the play with BlackBerry is a partnership play, not at all an acquisition," Chowdhry told Benzinga. "Apple will welcome BlackBerry as an App Store partner. They can publish their security software on App Store and people can download it -- no different from what [other companies] have done."Chowdhry said that Apple does not acquire companies that were successful in the past but offer "zero future value.""If they even have to spend $1, they would rather spend [it] on something that enhances the world, which is very focused on instant responses," he added. "I don't think BlackBerry is in that space."

Money Well Spent

"You don't want that baggage," Chowdhry continued. "Think about it. Where is Apple more benefited: pouring $5 billion in BlackBerry, or if they put maybe just $2 billion into Tesla's Gigafactory? Which is going to add more value to Apple five years from now?"Chowdhry said the answer is "definitely" the Gigafactory -- "not BlackBerry.""The future resides in a completely different industry," he added. "It could have transportation aspects to it, mobility software aspects, control aspects [for your smart devices], infrastructure aspects like the Gigafactory. That's the world that is evolving…and BlackBerry has no play."Foolish companies invest and buy in yesterday's companies. Smart companies invest in creating industries of the future. Mobile is an industry. Apple Watch is an industry now."

Internal Issues

Before making another major acquisition, Apple has to deal with its own internal issues, starting with the supply of the Apple Watch. Chowdhry blames Angela Ahrendts, Apple's senior VP of retail and online stores, at least partially for the device's launch day confusion."Apple Watch is not a jewelry item," he said. "[Ahrendts] has gotten that wrong. The customers are using it as a personal communicator [because it's] always available and attached to them. People want to experience the product, but if you keep selling it like jewelry, you can't!"Chowdhry was particularly upset by Apple's decision to keep the watch under lock and key. Not even the cheapest models, which sell for several hundred dollars less than Macs, iPhones and iPads, are readily available for a test drive at the Apple Store.Disclosure: At the time of this writing, Louis Bedigian had no position in the equities mentioned in this report.