Best Buy (BBY) announces its connectivity strategy along side a near doubling of EPS. Sounds good. Very good in fact. Conspicuous by its absence is any discussion of on-line downloads a la Netflix (NFLX) or iTunes (AAPL). You have the consumer at the initial moment of trust when he/she lays out large wads of cash to buy some expensive gear. If the consumer is going to use connectivity it makes sense the same consumer will consume media on-line. Why lose the relationship?
Brian Dunn, CEO of Best Buy says they are still in the early stages of the strategy. Lots of ways the comment may be interpreted.
Let’s see Netflix (NFLX) has a market cap of some $7.7 Billion. Best Buy (BBY) market cap is roughly twice that at $14.4 billion. M&A seems unlikely. Strategic Alliances seem more likely. But executives do not even discuss the possibility.
Disclosure: No position in stocks mentioned in this post.