Gary just wrote a very persuasive post, detailing the synergies to be had if Apple were to purchase Sony.
I’m not entirely sure that I can agree. The root of my disagreement is that Gary’s argument focused on why a buyout would be good for Sony, but didn’t really address why it would be good for Apple. I’ll address Gary’s two points in order:
1: Partner to innovate. What does Sony have that Apple needs?
Will Sony help Apple lock down the consumer’s living room? They seem to be doing a pretty good job on their own, if the Apple TV connected to my 60-inch display, and the iPads my wife and I are holding while we watch TV are any indication.
Manufacturing? Not anymore, at least not like they used to. Sony became an assembler ten years ago, putting other people’s components into Sony-branded boxes.
Apple already knows how to manage the assembly supply chain, and today Sony doesn’t have any greater expertise than Foxconn, Samsung, or two dozen Chinese companies you’ve never heard of.
Where I can see ownership of Sony benefiting Apple is on the content management and distribution end: Having Sony Pictures Entertainment and Sony Music Entertainment under Apple’s umbrella would be of strategic benefit for keeping iTunes on top of the streaming content heap, but on the hardware side, I see Sony as a burden to Apple, not an asset.
2: Sell it yourself. Apple has done an astonishing job of both running their own retail outlets while simultaneously getting merchants worldwide to vend Apple’s goods for them.
It’s doubly remarkable, when you know how highhandedly and imperiously Apple treats its business partners on the retail end. I could elaborate, but it would probably get me into trouble at work.
On the retail side, with both their online store and the bricks and mortar Apple stores have achieved staggering metrics.
Sony retail outlets, by comparison, can best be summarized as expensive gambles/experiments that never really paid off.
I’ll conclude with my own point, that the reason why Apple shouldn’t buy Sony is that past is prologue: The state that Sony is in today foreshadows where Apple is likely to be in ten years time.
Sony is at the bottom of a hill that they’ve been sliding down for a long time. That slide began when Sony’s founders no longer exercised absolute control over Sony’s innovations. Masaru Ibuka and Akio Morita both put their stamp on the company, but it was especially Morita’s vision, will, and sheer personality that guided Sony to its dominant position as the greatest electronics manufacturer in the world.
In the wake of Morita’s departure in 1989 control of Sony passed to a succession of corporate salarymen whom, regardless of their strengths and talents, lacked that core vision that the founders brought to the Sony brand. And while they were able to capitalize on Morita’s vision all the way through the 90s, by the early 2000s the brand was already a shadow of what it once was.
Apple is still at the crest of that hill, waiting to slide. Steve Jobs is gone, and while Tim Cook is clearly an exceptional individual, he won’t be around forever either. Apple is still running on the inertia of Jobs’ vision, but that won’t last forever.
That’s not to say that I think Apple will tank next year, but long-long term, the prognosis for tech companies is seldom good a decade past their peak.
In that context I have trouble visualizing an upside to Gary’s proposed purchase. I doubt that Apple can save Sony, and I worry that Sony would only drag Apple down and hasten its demise.