Will Apple Buy Sony?

Sony shares have moved up recently on rumors that the company might be bought by Apple. Apple could easily afford the deal. It has over $50 billion of cash on its balance sheet, and a market cap of $282 billion. Sony's market value is less than $34 billion.

Apple might like to own Sony's gaming operation, which manufactures and sells the PlayStation line of products. Apple does not have a position in the market, which is dominated by Sony, Microsoft, and Nintendo. The Apple App Store does offer online video games, but by industry estimates Apple only keeps one-third of the revenue from those and obviously has no hardware presence in the industry.

But, Sony is a very messy company, so Apple would probably have to dispose of some of the Japanese firm's businesses. Sony owns a large movie studio. Apple is in the content distribution business, and its content partners would probably not want to see Steve Jobs as a direct competitor.

Apple might be tempted to keep Sony's digital camera and TV screen business. It would have to suppose that the Apple brand would help sell the products at premium prices. There is, however, the problem that the two businesses have low margins and are in extremely competitive markets.

Sony has also been poorly managed, if operating profits and revenue growth are good measurements. Apple does not have the executive prowess to run a huge but unsuccessful company that is struggling. It would have nothing to do with Apple's strengths: product management and brand management.

Sony's best days are behind it. The company recently said it would stop making its Walkman cassette player for most of the world. That is a sign of how much power Sony has lost in the consumer electronics world. Even Apple would face a Herculean task if it wanted to revive Sony's fortunes.

Presented by

Douglas A. McIntyre

Douglas McIntyre is editor of 24/7 Wall St.

How to Cook Spaghetti Squash (and Why)

Cooking for yourself is one of the surest ways to eat well. Bestselling author Mark Bittman teaches James Hamblin the recipe that everyone is Googling.

Join the Discussion

After you comment, click Post. If you’re not already logged in you will be asked to log in or register.

blog comments powered by Disqus

Video

How to Cook Spaghetti Squash (and Why)

Cooking for yourself is one of the surest ways to eat well.

Video

Before Tinder, a Tree

Looking for your soulmate? Write a letter to the "Bridegroom's Oak" in Germany.

Video

The Health Benefits of Going Outside

People spend too much time indoors. One solution: ecotherapy.

Video

Where High Tech Meets the 1950s

Why did Green Bank, West Virginia, ban wireless signals? For science.

Video

Yes, Quidditch Is Real

How J.K. Rowling's magical sport spread from Hogwarts to college campuses

Video

Would You Live in a Treehouse?

A treehouse can be an ideal office space, vacation rental, and way of reconnecting with your youth.

More in Business

Just In