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.
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
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
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.
Nah…
Apple should buy Disney
Should Apple buy Sony?
No.
…still waiting for Apple to buy Microsoft…the final revenge.
nah, way too much overlap….
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”
No! Buy Pioneer. Elite, the best TV.
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
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.
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.
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.
I agree with all the above. Buy companies that offer new tech. The only interesting part of Sony is its media content.
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.
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.
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.
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.
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..
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.
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.
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.
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.
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.
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.