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Apple and Electronic Arts? I don't buy it!

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You seriously have to be kidding me. Apple (NASDAQ: AAPL) is interested in Electronic Arts (NASDAQ: ERTS)? I can't believe what I just read.

Well, to be accurate here, I'm not sure if this is a strong rumor or not. Then again, there has been a lot of speculation over the fate of EA since it has been doing so poorly and since its stock has seen a fall in value the last few years (it should be noted, though, that the stock has been strong the last several months).

But Barron's reports that Apple may want to buy the gaming publisher since it has a lot of cash to utilize for investing. Apparently, Guy Adami of the CNBC show Fast Money said there was some buzz equity surrounding this possibility (it was also mentioned that maybe Apple could purchase Twitter . . . but that's another story!).

You know what? Apple taking over EA would be stupid. Seriously. Apple has no business even considering the notion (assuming it actually is, which I find difficult to intellectually fathom).

Why is this such a bad idea? It's simple, really: the two companies would never properly integrate. I don't see a lot of synergy between the iPhone/iPod/iMac portfolio and the Madden games. Now, a lot of readers are probably aghast at that last statement. I'm sure many are saying to themselves, "Does this guy know what he's talking about? Apple could make a lot of use of EA's intellectual properties. Imagine leveraging EA's software on the Apple platforms?"

Sorry, I just don't see it. For that matter, I didn't like the theoretical union between Disney (NYSE: DIS) and EA. In that particular case, I think it's more than arguable that since Disney has enough of its own problems to deal with, it shouldn't be going after a software publisher that is itself trying to figure out how it can return to a proper path of growth.

In the case of Apple, I think the iconic hardware company is doing just fine. It doesn't need some huge acquisition/merger strategy to enhance its current business model. EA would be a bad drag indeed.

Apple simply needs to do what it does best: Sell its very fashionable technology. Consumers love Apple's products. They relish the brand. Apple should keep its focus on making its various trademarks increasingly valuable over time. Throw EA into the mix? Don't want to see that.

Now, is there any company out there that should take a stab at EA? I'm not sure I'd wish EA on any corporate entity, but maybe a Microsoft (NASDAQ: MSFT) scenario might work. At least one can see more synergy with that hookup since Microsoft has the Xbox 360.

I can't predict the future. And I know that stranger things have happened, stuff that you never thought was possible in a million years (like workaholic Jay Leno missing a taping of The Tonight Show). But as far as I'm concerned, an Apple/EA takeover isn't in the cards (famous last words, right?).

Disclosure: I own Disney; positions can change without notice.

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Last updated: November 25, 2009: 12:32 AM

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