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Apple should buy Sony
Saturday, October 27, 2007 - 09:15 AM EDT

By Greg Mills

When a company becomes as big as Apple is today, acquisitions become a way to grow quickly and increase synergy towards major corporate goals. Apple long ago stated its
target of living room convergence with video, computer and music, all interactive with the Mac. AppleTV is the first element of that convergence. Steve Jobs has publicly stated that he admires Sony. Apple and Sony go way back in minor collaborations. My first laptop was a PowerBook 100, an Apple Mac manufactured by Sony.

Sony represents some great building blocks to make the transformation of Apple Computer into Apple, the electronics company. Owning Sony would combine the strengths of two great companies into a conglomerate that might blow the competition away. Sony has recently lost its way and needs focus to regain its former glory. Its value is down enough to make it a takeover target in the right situation. Look at the intersections of interest between the companies.

Sony of course, owns PlayStation, which would give Apple the game franchise it lacks. Apple could use that block in building the electronic living room of the future. How would you like to run PlayStation games on a Mac or in HDTV format on your Sony theater HD video display? How about a Sony HDTV camcorder with a built-in hard drive built in that records video in a format that would allow your Mac to use that video directly in the camera and then burn to a Blu-Ray disk, without ever transferring the video into the computer. Electronic devices are commonly "close but no cigar" to doing the cool things that are so "Apple." Sony needs that extra "cool factor" that they have lost sight of over the years, that instinct to know what customers really want is what Apple has in spades.

Blu-ray is another Sony property that Apple can help Sony build on. Apple is one of the early adopters of the Blu-ray high definition video format and we will see Blu-ray disk drives in Macs very soon. The "Apple falling on the Blu-ray side of the fence" will help stop HD-DVD (Toshiba) and make Blu-ray the standard HD disk format. Apple is far and away the innovation leader in computer technology and Apple controlling Blu-Ray technology would send a powerful message; and don't forget the revenue stream from licensing Blu-ray.

Sony TV sets are some of the best video displays in the market place. Like Apple, Sony tends to be the quality leader in it's products. Apple could help Sony focus its R&D, spell that "Steve Jobs," Mr. focus himself. The world class product design of Apple combined with Sony could create an entirely new design engine that might revolutionize our living rooms in 5 years time. Sony has been losing ground on it's market share of big screen TV sets, perhaps Apple can help them design wise, especially with user interface and connect-ability.

Sony holds a lot of patents (over 25,000 US Patents) that combined with Apple technology would be a powerful collaboration of synergy. Intellectual property alone, makes the collaboration interesting, let alone the market and manufacturing implications. The international aspect of Sony and Apple would wear out Steve's old jet, and allow him to buy a nicer brand new one. (Steve, you deserve it) This combination might help Apple sell Macs and iPods in Japan. Remember the halo effect.

Sony pictures and music is an additional property that Steve might find useful, since he's Disney's largets individual shareholder anyway. With the entire Disney and Sony film library in the iTunes store, you have instant content, to make the lagging Apple TV device succeed. Content, content content! Sony's music portfolios and recording companies in addition to the extensive movie library are very valuable to Apple for exclusive sale though the iTunes store. Why negotiate a deal when you can just own them?

Some Sony products that are lagging could be discontinued such as Sony's lackluster music players in favor of iPods sold through Sony distribution. Keep in mind the Sony distribution channels are well established and have valuable marketing aspects Apple might well use to its advantage. Sony has a repair system in place to help with electronic repairs across the board. Some Sony assets could be sold off to help pay for the purchase.

Apple has a big fat bank account, a virtual mountain of cash and perhaps it is time to spend some of it to control Sony. There are a lot of creative ways to do it and I wonder if the thought has crossed the mind of Mr. Jobs. I am thinking Wall Street would like the idea. And Sony might even favor a merger as well. As a die hard Mac fan I can only hope that as Apple grows, it never ceases to be the "Apple" that us Mac fans know and love!

Greg Mills is a die-hard Macintosh user, MacDailyNews reader, and faux art painter who works in the Kansas City area.

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Oct 27, 07 - 09:31 am Comment from: ApplePi

does Apple really need the woes of Sony right now? How does this suite Apple? Apple makes better products in the mainstram market than Sony does, what's the gain? When is enough cash, enough cash? Getting greedy isn't going to help Apple.


Pi

Oct 27, 07 - 09:32 am Comment from: LordRobin

Only if the first thing they did was gut the company down to its skeleton. Apple may be able to purchase Sony, but Sony is a way-the-hell bigger company, with countless departments and divisions. If you don't get rid of the deadwood, Apple will have no more success running Sony than its current management. (Plus there's the danger that the "purchased" company could end up running the show, like what happened when AOL "bought" Time-Warner.)

------RM

Oct 27, 07 - 09:33 am Comment from: Jay-Z

I agree ApplePi. Apple doesn't need Sony right now. They're extremely focused and doing extremely well. There is no need to mess with a winning formula.

Oct 27, 07 - 09:34 am Comment from: Bob

Nah...

Apple should buy Disney

wink

Oct 27, 07 - 09:35 am Comment from: Arnold Ziffel

Should Apple buy Sony?

No.

Oct 27, 07 - 09:35 am Comment from: doc

...still waiting for Apple to buy Microsoft...the final revenge.

Oct 27, 07 - 09:47 am Comment from: Goople

nah, way too much overlap....

Oct 27, 07 - 09:47 am Comment from: Fatty

Err...no.

Apple shoudn't buy Adobe, or Disney or HP or any of the other names mentioned in the past few years.

"I skate to where the puck is going, not to where it's been." --Wayne Gretzky, as quoted by Steve Jobs in January

Sony et al are where the puck has been.

MW = "enough"

Oct 27, 07 - 09:48 am Comment from: ron

No! Buy Pioneer. Elite, the best TV.

Oct 27, 07 - 09:49 am Comment from: CommonSense

Absolutely not! Don't buy problems.

There may be small companies with good ideas that Apple could benefit from. Buying Sony make no more sense than buying Kodak or General Motors

Oct 27, 07 - 10:43 am Comment from: Not Bill

Good one Fatty. Sony is where the puck has been. Apple and Google are the puck these days. Together they should buy broadcast frequency rights for a wireless network. That is where the puck will be.

Oct 27, 07 - 10:50 am Comment from: Johan Niklasson

Steve has come this far by focusing on getting a few things perfectly right. That is both an achievement in focusing on what is important but also in getting rid with what is not. Apple will benefit more from staying focused instead of getting more than a handful products in its lap they would need to "reinvent".

Ten years ago, Apple would be tempted (if they had todays' money), but now they stand better on their own two feet (four feet) and Sony would only mean too much work.

If there is anything Sony does or has that intrigues Apple, Steve will reinvent it and refine it and offer it with an Apple logo.

Oct 27, 07 - 10:53 am Comment from: Reclaimer

Despite Sony's problems, it's still a great company.

I say buy it and fix what's broken.

Sony would give Apple an entry into a lot of product fields.

Oct 27, 07 - 10:53 am Comment from: DogGone

I agree with all the above. Buy companies that offer new tech. The only interesting part of Sony is its media content.

Oct 27, 07 - 10:54 am Comment from: steve

Buying Sony would be stupid. Many parts of the company are doing poorly and are in areas that probably need shutting down. They are a company of the 70s and 80s and require real genius to hope to get on track again.

If Apple moves into other Sony like areas, they are better served by doing it on their own with their own wisdom. Much better than buying something that doesn't work from a failing company.

Oct 27, 07 - 11:06 am Comment from: Mocham4n

My vote is for Nintendo!

Apple should buy the makers of the Wii they would make a great complement to the overall home entertainment strategy.

Oct 27, 07 - 11:08 am Comment from: Ferf Muckmeyer

From a purely business standpoint, this actually makes some sense. Forget about the so-called problems of Sony for the moment. Look at the benefits:

1) Control over a globally recognized brand that way back when was the Apple of its day in terms of innovation. True that may not be the case now but based on the name, Apple would be able to turn it around easily with current innovation.

2) As stated in the article, it instantly expands Apple's offerings in consumer electronics. Flat screen TVs and audio equipment would be an excellent addition. Sell off the clock radio divisions, but keep the most important and relevant product lines.

3) imagine this - take the VAIO line and give THOSE users to the ability to run OS X on those machines. Limit OS X to VAIOs only - no other brand - and you may be able to kick MS in the balls by taking out one of the bigger players in the PC/Windows market. Not too far fetched, huh?

4) Jonathan Ive could act as a consultant to them to reinvigorate them. Talk about innovation!

5) Finally mkt cap on the combined companies would be significant. A big step forward.

But would Apple want to go into debt for this? how would the transaction be structured? Couldn't all be cash - would have to have a debt component or stock swap.

Think about the possibilities. Think different. Maybe.

Oct 27, 07 - 11:10 am Comment from: Ferf Muckmeyer

And doc,

Can't wait for that moment. Ballmer's fat ass and butt ugly tongue-hanging-from-mouth face getting canned is my biggest wish.

Oct 27, 07 - 11:16 am Comment from: Nightstar

Interesting concept.. But totaly wrong...

Basically Sony need to clean up there act very quickly...

Sony TV are NOT the best... There audio is NOT the best... And except for the A Reader Division that is doing everything correct. They are just on these days.

Basicaly Sony's acting like Microsoft. Arrogant and thinking they control everything but dont! Sony's doing fair but add in the game division that went totaly the wrong way. Its a sinking company.

Doing this would be like Apple after Jobs left... A mess..

Oct 27, 07 - 11:24 am Comment from: Mitch

Bad idea. Terrible idea. Horrible idea.

Apple is growing at an incredible pace - growth is not a problem.

Apple is increasing stock price at an incredible pace.

Buying Sony would be an enormous distraction to Apple, Inc.

Apple is executing about as well as a company can - don't fix what isn't broken.

Most acquisitions are a colossal waste of money (except for Wall Street which makes lots and lots of money).

Doing some this stupid would be the beginning of the end for Apple.

Oct 27, 07 - 11:32 am Comment from: Jon1

Here is the deal. Sony is part of Japan, Inc.
Japan, Inc. does not sell prestige brands to American companies. It is called "Losing Face". It won't happen.

Apple doesn't need Sony for anything except maybe their music. All else can be duplicated. Even the music business can be duplicated - only better.

Oct 27, 07 - 11:33 am Comment from: Linux Guy And Mac Prodigal Son

What a huge mistake this would be. Adding to other poster's comments, Apple would be forced to bet on Sony's technology, such as Blue Ray and its TV offerings, instead of just choosing the best technology and business suitability amongst all of the vendor's products to integrate into Apple's product line.

And who the hell needs Sony's sinking brand name? Apple's is the best.

Oct 27, 07 - 11:47 am Comment from: Jeremy

This is one of those ideas that looks good on paper, but actually makes no sense as others have pointed out.

One thing not mentioned is the gigantic cultural and linguistic gap between the two companies. Sure Mr. Ive is a great designer, but Sony has their own designers that have worked together for twenty years or more. These are mostly Japanese guys who grew up in a Japanese culture. Can you imagine Ive or Jobs even being able to *communicate* effectively with a factory filled with thousands of Japanese-speaking workers?

Also, the one market on the whole planet where Apple products sell very *poorly* is Japan. There is no "synergy" with Sony just because North Americans who buy Apple products also like to buy Sony stuff. The average Japanese consumer doesn't really even like Apple products. Synergy has to work both ways.

Oct 27, 07 - 11:52 am Comment from: smoothn00dle

I think Greg Mills is saying take out Sony while he is weak. May be he is just rubbing salt on Sony's face. If Steve Jobs able to take over sony or try, he is a genius.

Apple's worst competitor is not M$, Dell, HP, Intel but is Sony. I firmly believe Sony will got back up to the top. Sony is forming alliance with Toshiba, IBM and movies studio that has the potential to break the American's dominance in IT. Sony is leader in Hollywood. It has long history of success and innovation.

Mr Jobs sell his product on life style and look, Sony sell cutting edge technologies. Everything Apple can do, Sony can do better but not other way around. Can apple create OLED screen, BluRay and make cellchip?

Apple's biggest problem is Steve Job. Today's success is tomorrow poison. Apple is so depend on this guy, what happen if he retired. Sony don't have that problem at least.

Oct 27, 07 - 11:57 am Comment from: Norm

I suppose they could buy Sony for the patents, movies and music and sell off the rest, but this seems like it could be a giant distraction.

Oct 27, 07 - 12:00 pm Comment from: nobodi

Apple is the future.

Sony is the past.

Marge them and what do you have?

Today.

Bad idea.

Oct 27, 07 - 12:08 pm Comment from: Chris G

Ya.... No. Apple is doing just fine on it's own making the transition from a computer to consumer electronics company. It doesn't need the hassle of resuscitating a failed console (PS3), and continuing a rather lackluster and "who cares, just pick one" format war.

Sorry, not what the stockholders want. Would never happen. Also, it's a corporate "would never happen". Like Honda or Toyota buying one of the failing US auto brands...

Oct 27, 07 - 12:22 pm Comment from: MacGeek

HOW TIMES HAVCE CHANGED.
Check this article from Wired in Sept 2003, Suggesting that Sony should save Apple.

http://www.wired.com/wired/archive/11.09/start.html?pg=2

Oct 27, 07 - 12:35 pm Comment from: wetn00dle

@smoothn00dle,

"Today's success is tomorrow poison."

Tell that to Sony twenty years ago.

Oct 27, 07 - 12:42 pm Comment from: @nightstar

Bingo.

Yea, while the idea sounds good, you have real problems like the size of the company, its japanese backgrounds, and corporate thinkology which can kill a buy out.

If Sony were moving in the right direction, I would think that a colaberation would be great, but I think they are moving in the Microsoft direction. Out in left field with a left handed hitter. grin

en

Oct 27, 07 - 12:49 pm Comment from: LorD 1776

This would be a total debacle for Apple. At this time the only thing I would like for them to acquire is Super Duper. This is one of the best applications ever for the Mac, and one I will continue to use, with or without Time Machine.

Oct 27, 07 - 12:52 pm Comment from: John C. Randolph

People keep tossing out these companies that Apple should buy. Most of the time, they concentrate on how great the buy-out would be for the company that gets acquired, and ignore the question of what's in it for Apple?

There's nothing that Sony has that Apple can't get for far less than fifty billion dollars.

-jcr

Oct 27, 07 - 01:02 pm Comment from: Too Hot!

I totally disagree with buying Sony. But that doesn't mean Sony can't be "owned" by Apple:

Steve Jobs has immense sway at Disney, but Apple doesn't own Disney. And this model works perfectly. Apple does not bear any of Disney's woes, but can collaborate and benefit from Disney's resources in a way that only owners can. If Steve Jobs were to be the majority share-holder at Sony, Apple might have a similar advantage, with possible access to media content, distribution channels, and the only consumer electronic product that matters at Sony (HDTV sets). Apple will not need to manage Sony's miseries.

@Mocham4n: Totally agree. Nintendo is the only company I can see Apple owning with ease, and losing nothing in the process. It's a forward thinking, innovating company that is rather specialized (with only a few departments to manage) and a keen interest in finding what consumers want.

Oct 27, 07 - 01:05 pm Comment from: The insider

WTF?...you have to be out of your mind! Sony is such a mess. One one the main points is, that they sell to many products. The products that they do sell, such as a TV, they have twenty or so of them that most people do not know the the different between them. They just overlap on specs, and the price is to high for what you get. Samsung, LG, Panasonic, Sharp..etc has caught up with them. They need to cut back on how many products they make and lower there prices about 15-20% across the board.

Oct 27, 07 - 01:06 pm Comment from: DJ

Sony TVs, cameras, camcorders and PS are terrific products.

Whether they're enough for a takeover, I leave to Steve.

Oct 27, 07 - 01:13 pm Comment from: BDK

Sony is way too big to be taken down and gutted and Apple is still too small to acquire everything that Sony produces.

If anything, Apple could acquire Sony's computer business. Sony really doesn't need to be making computers.

Oct 27, 07 - 01:15 pm Comment from: Kleereb

Should Apple buy Sony?? ... NO!

Should Apple AND Google buy Philips?? ... YES

Philips is one of the best R&D;there is but with a poor, poor marketing.

Oct 27, 07 - 01:34 pm Comment from: Reality Check

NO..NO..NO.. Forget Sony, their only worthy asset is media. Nintendo, now that makes sense, I am so sick of gamer-fanboys slagging my platform.

Personally I think Apple needs to start a music label, without the artist raping that is the current model. Call it iTunes Direct, the infrastructure is there. Look at the acts startins to finally rebel, NIN, Radiohead, ETC, releasing their music without the labels. Bands do not need $100K today to record an album given current technology. This would be so easy for Apple to do and promote, I can see the commercials now. lets do away with all this disposable over-hyped garbage on the radio. Fans get reasonably priced music and the artists get the rewardf for their hard work instead of the pennies on the dollar they get now.

Oct 27, 07 - 01:38 pm Comment from: Robert

Apple merging with Sony would help strengthen the position of Blu-ray in the marketplace, it would gain access to premium content, and it would gain access to it's line of broadcast equipment. Sony has excellent broadcast gear, namely its cinealta lineup, which would help further cement Apple's market share with it's Final Cut suite, and Apple would probably drastically cut the prices on Sony's professional gear to get more market penetration. The downside is that Apple would risk further alienating itself from the other record labels.

Oct 27, 07 - 01:43 pm Comment from: G4Dualíe

Everything negative pointed out by the commenters above, are the very things they said about Apple of the Nineties and why Sony shouldn't buy Apple!

Oh my, how things have changed.

Sony lost their vision and in doing so, allowed so many things to fall into disrepair. Things have become so complicated and thinly spread, only someone given complete autonomy over the company's infrastructure could fix it and Jobs has better things to do with his time now. Let's face it, Jobs could phone in his solutions.

Steve Jobs' only concern right now is ensuring Apple Inc. continued success for the next 100 years and rather than getting his hands dirty with the day to day operations he should be focusing on long-term solutions and strategies, lining up his progeny, and enjoying the fruits of his labor.

Apple doesn't have to buy Sony in order to develop a symbiotic relationship with them, or to take advantage of their properties, they need only share the minds and time of key people.

Perhaps Sony should invite Steve Jobs to sit on its board of directors. That would be a start anyway.

Oct 27, 07 - 01:56 pm Comment from: Edward Edwards

The fallacy here is that Apple is a leader, but not always a dominator. You say Blu-ray, I say Firewire, Quicktime, and Mac OS X. Just because Apple digs it, just because it's the best, doesn't mean Apple will conquer.

Oct 27, 07 - 02:04 pm Comment from: Tom

I went to the Developers Conference in 2004 and visited with then iPod lead guy Jon Rubenstein. One topic he spoke about was their analysis of business opportunities.

The first of their three step evaluation was defining a market in a state of chaos (not a company, but an entire market).

The second was to determine the market had no dominant leader and those in the market compared unfavorably financially against Apple.

The third was to determine if taking control of the market would yield the required return for a reasonably period of time.

A Sony acquisition peg doesn't fit their holes.

From a technology acquisition perspective, Apple typically spends small for key technologies rather than spending big to buy an established brand. For example, Apple paid for Logic, Microsoft paid for Facebook.

From my perspective, a merger with Sony would be about both brand and technology. The brand side is contrary to Apple's historic tendencies. The technology side is likely to demand a premium due to the significance of Sony's brand value.

I remember a Jobs interview where he spoke about the discipline required to say no to 99 good ideas to focus absolutely on the great one. The iPhone shows this mindset in execution. Sony better learn to swim.

Oct 27, 07 - 02:10 pm Comment from: Jay

Apple buying Sony would be like someone intentionally going out and contracting an STD.

No thanks.

Oct 27, 07 - 02:13 pm Comment from: Gigi

To SmoothNoodle:
"Apple's biggest problem is Steve Job. Today's success is tomorrow poison. Apple is so depend on this guy, what happen if he retired. Sony don't have that problem at least."
YES,THEY HAVE: it is called Akio Morita! This genius was the SteveJobs of SONY! Sony is no longer what it used to be since he passed away few years ago!

Oct 27, 07 - 02:20 pm Comment from: Breaking the Fast

Yes Apple should buy Sony in the TV set area,because we really some apple dvd players,Apple Higth-def TVs and Apple should also begun to make some printers and scanners like in the old days.

Oct 27, 07 - 02:57 pm Comment from: Joe

Imagine saying this ten years ago! How times have changed indeed. As a Apple fan I'm estatic that Apple is so big and successful that Mac fans are actually contemplating on buying Sony!

Today is a good day to be a Apple lover. smile

Joe

Oct 27, 07 - 03:00 pm Comment from: fenman

While this might be an interesting idea I think there are a few significant problems.

First Sony and Apple have totally different approaches to the business they are in and the overlap in key areas is too great. Apple would be reluctant to take over a business that competed on too many fronts as the end result could only be compromise in order to keep the stock holders happy.

Second there are better targets that would expand Apples range and aid in penetrating markets where Apple is not too strong. I am thinking of Sun. They are major server and data centre backbone manufacturers, hold significant IP, are well within Apple's price range and would instantly gain Apple significant corporate client base. There may even be some synergies to a possible merger of OSX and Solaris as server operating systems. Both are Unix, both are powerful, both have features the other doesn't. To me it makes sense.

What do you guys reckon?

Cheers

Oct 27, 07 - 03:11 pm Comment from: Ryan

NO WAY is this a good idea.

A key to Apple's strategy over the past decade has been avoiding "commodity" markets where the players live and die on price, and creating parallel or totally new "lifestyle" markets where products win on the basis of user experience (including how it fits into the user's lifestyle).

With the possible exception of the PS3, which has has its own set of problems, almost none of Sony's consumer electronics products play in these markets, much less succeed there. TVs and stereos is the LAST thing Apple wants to get into, because guess what that whole market is about? One giant price war. Let Dell or someone else bleed cash in these markets so they can pretend they're "growing" or "diversifying"; Apple doesn't need it.

Oct 27, 07 - 03:19 pm Comment from: Brau

Sny? No. Buying Sony BMG would be a coup for iTunes content and marketing clout, but that's not part of the Sony package AFAIK. The only thing buying Sony would do for Apple is give them a chance at the market in Japan; something Apple is desperately trying to improve. However these type of moves are always fraught with folly as the loyal brand consumer ultimately knows when their favourite company has been sold out. Would a loyal Ford fan buy one if GM bought them out?

WND word: Larger - as in larger isn't always better. Apple is better off to grow themselves and let Sony wallow.

Oct 27, 07 - 03:37 pm Comment from: mel Gross

Terrible idea. There are too many things Sony has as products that would have to be sold off to make this work, and then, what would be the point?

Number one is their PC business. Unless Apple were to retail that, and I don't see why, as it would be the same company, they would have to have OS X run on them.

The second would be the music and movie businesses. Despite what some people think, Apple can't be a reseller of all content while owning some of the bigger companies producing it. Other companies look askance at that.

There are quite a few other products that simply don't fit within Apple's purview. Do we want Apple producing alarm clocks?

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