Apple has over $50 billion in cash. CEO Steve Jobs has said the dough is available should Apple decide to make any “strategic purchases.” So what companies might be a good “strategy purpose” for our favorite tech company?

My “MacNews/MacTech” writing compadre, Greg Mills, thinks Apple will buy Netflix. There are some good reasons why it should. Apple could beef up its presence in the television/entertainment area. And Netflix is a strong company — and getting stronger.

An analyst with Gleacher & Company, says (http://www.istockanalyst.com/article/viewarticle/articleid/4613650) the transaction would make sense. “You know, Apple wants to be the first company to seamlessly integrate the home office and the living room,” he says. “What’s limiting them now is basically content and better broadband into the home. In terms of content, they have over 10,000 titles on iTunes. Netflix has over 100,000 titles. That would be a pretty interesting marriage right there.”

Kaufman Bros analyst Shaw Wu thinks that (http://www.investorplace.com/21487/will-apple-strategybuy-netflix-facebook/), given Apple’s increasing interest in both video and gaming, Netflix (as well as Electronic Arts) could be a target of a multi-billion acquisition by Apple. He says Netflix would give Apple the same penetration with video onto competing platforms like Google Android smartphones, set top boxes like Logitech’s Google TV boxes, and gaming consoles like Nintendo’s Wii much in the way it has with the iTunes software and store. It would also make Apple an automatic leader in the streaming, on-demand video market that is gaining on broadcast and cable service, Kaufman says.

The “Motley Fool” site (http://www.fool.com/investing/general/2010/10/27/what-will-apple-buy-next.aspx) concurs, noting that Apple owns the digital music market, but “it’s a different story when it comes to video.” “It’s doing a reasonable job of trying to sell and rent movies and television shows on a piecemeal basis, but Netflix’s subscription-based streaming buffet is the real dynamo here.”

“Apple certainly has the money and connections to broker the content-licensing deals to get off the ground, but why reinvent the wheel?” says “The Motley Fool.” “Netflix has 16.9 million subscribers, and more than 11 million of them are taking advantage of Netflix’s unlimited streams through their computers and Web-tethered home theater devices. If Apple buys Netflix, it becomes the undisputed champ in this space. If not, it will take years for it to pry Netflix’s 16.9 million — and growing — couch potatoes away, and that seems unlikely given the market’s love for Netflix.”

All this makes sense, but, personally, I don’t think Apple will buy Netflix, based on its past history of NOT spending oodles of cash on company acquisitions. Netflix’s market cap is around $8.7 billion, and the stock trades at 44 times its 2011 earnings estimates.

Apple could certainly afford to buy Netflix, but, to me, it looks like Apple is more likely to continue to partner with Netflix, as it does on the latest version of the Apple TV. That said, I do think Apple is planning to take on the cable/satellite TV companies in some fashion with its impending data center outside of Raleigh, North Carolina. And I don’t think their plans involves a competitor to Netflix (at least not a direct competitor).

Tomorrow we’ll look at why Apple might buy AMD — but probably won’t.

— Dennis Sellers