It can’t. Sony is worth over $45 billion – about the same as Yahoo! which also isn’t possible for Apple to purchase (and might make more sense). A merger? Yeah, I can see Steve Jobs ceding some control of Apple to outside forces. It really makes you wonder why Apple Chief Executive Officer Steve Jobs doesn’t just buy Sony. Plus, what would Apple get? Vaios that run Windows Vista? A semi successful TV hardware business? Some screen manufacturing? The only valuable thing to Apple would be the Playstation line and perhaps the media-entertainment divisions which would, of course, alienate the other media companies that compete on iTunes. If Sony is smart, they admit they messed up trying to become a media company and spin off that division. They focus on hardware and better software and stop being crippled by the MPAA/RIAA-like division of their company. Of course Stringer is NOT the guy to do this. When Sony gives up on him, this will be the natural tendency.
The rumors that have circulated in the (distant) past were that Apple was dying and needed someone to rescue. It was always Sony buying Apple. Since Apple is worth over twice what Sony is, that obviously isn’t an option. Also, Sony would fire Stinger in a heartbeat to be led by Steve Jobs – not that he would ever do it. The argument here is that Sony’s hardware is better than Apple’s. I think there would be a lot of people who’d disagree with that. Sony does have a much broader line of hardware – which Apple might want to expand into at some point – but not all at once. I think one of Apple’s strengths is its simplicity. Because if you buy Sony, you lose all of the other content. It is kinda like AMD buying ATI. Intel isn’t playing much ball with ATI anymore and the AMD-ATI merger is looking like a disaster. Imagine that times a million. Few words roll eyes like “synergies,” and yet Apple and Sony would enjoy a bull market in them. Sony needs to restore the “cool factor” it once had and Apple now owns. Apple needs Sony’s content — movies, music — to sell to its iPod and Apple TV enthusiasts. Why negotiate deals with record labels and film studios when you can own them? Optical is dead to Apple. And Apple isn’t in the camera business. It made the first digital camera (Quicktake 100) and currently includes cameras in all of its portables but is unlikely to want to jump into a fiercely competitive marketplace where it doesn’t have much expertise. Apple does plenty good in Japan. Some would say better than Sony in its own hometown. Picking up a falling star isn’t going to help Apple. You won’t find a more mobile-phone-obsessed population anywhere than Japan. Adding some Sony designs to the iPhone alone could mean huge profits. And Apple might find Sony’s distribution channels helpful in boosting its Asian business. So why would Apple want to be associated with Sony again? Sony is having trouble getting its groove back. Even after falling amid subprime-loan turmoil in markets, Apple’s market value is $107 billion to Sony’s $44 billion. Operating margins really tell the story. Sony’s was 0.86 percent at the end of March 2007 versus 2.48 percent in 2003. Apple’s was 18.37 percent at the end of September versus 0.40 percent in 2003. One could argue Sony is looking a bit Microsoft-esque. Microsoft was slow to realize the extent to which the Googles of the world made it seem more Old Economy than New Economy. It has taken Sony some time to understand Apple’s threat. Apple doesn’t buy companies too often. Usually when it does it is to acquire a specific software or technology for products it wants to build. A Sony merger isn’t in its DNA. Apple also doesn’t do debt anymore. Some Sony product lines could be sold to help Apple pay for its acquisition. Yet how much debt would Apple be willing to take on to finance it? And given Sony’s baggage, an argument can be made that Nintendo Co. would be a better fit for Apple. Their illustrious history is coming back from World War II and making the frst transistor radio in 1954 under founder Akio Morita. Since he left in 1994, it has been a steady decline. Things haven’t really been that good since 1989 when they picked up Columbia from Coca Cola. Or since the betamax philosophy took root (kit). Nice work Bloomberg. For someone who follows Apple and to a lesser extent, Sony very carefully, this type of speculation seems a bit “out there”.
