Originally Posted by Dr Millmoss
Apple doesn't license this content from Sony, they retail it. Apple owning content creates a huge disincentive for other content owners to allow Apple to retail their products. They're having problems enough now. You suggestion makes it close to impossible. One step forward, five steps backwards.
Not quite. First off, there's a similar argument with the Comcast/NBC merger -- why put ABC, FOX, and CBS content on Comcast? But it looks like the FCC will let the merger go through. Obviously they're not worried, there, and why should they? Comcast customers will continue to want their other local channels, and if they don't get them, they'll go to a competing cable or satellite company.
Second: Sure, Apple "retails" music and movies on iTunes. But what I'm saying is that in order to retail it, an agreement has to be made between Apple and the content providers on how much Apple can sell the content for, how much the labels get, etc. Any musician who signs with an Apple-owned Sony Records would know that Apple would never stop selling their music on iTunes, because of a contract dispute between Apple and an outside content provider. There's a lot of peace of mind there.
iTunes is the 800-pound gorilla in the room. Appx. half of all modern music sales is from iTunes, and more and more movie purchases go through iTunes; you have to sell through them, especially music. If other content providers don't make a deal with Apple, they lose a lot of profit. Read what happened to Rubbermaid when they couldn't get a deal with WalMart in the 90's. Same thing here. Apple would have the leverage, and there's nothing Warner Records or 20th Century Fox could do about it.
Originally Posted by alexkhan2000
Yes, Apple could buy a lot of companies with $51 billion but doing so has to make business sense - both short-term and long-term. Most major M&A's fail. That has proven to be the case time and time again. What looks good on paper normally doesn't pan out in reality. And it would be even more so for a company with as unique of a culture as Apple's.
You bring up a good point. When I first heard this story, the first thing I thought was a shocked, "What?!" It made no sense to me, either. I'm still not convinced that a purchase of Sony would be a good one. But what do I know? I'm not Steve. Maybe he sees something I don't. But usually, these kind of purchases don't work. (How lucky does Microsoft feel for not purchasing Yahoo?)
That said, if Steve purchases Adobe, then I would believe he went off the deep end.
Regarding Sony's content assets, Disney would make more sense
Disney is an even bigger and more complex corporate conglomerate. Which parts would be important for Apple? Besides, Sony offers television IP that Disney can't offer.
As for the rumored Apple HDTV set, Sony is already an established brand. What would be the point of removing the Sony logo and putting the Apple logo on one? They could have many other TV set makers just build one for Apple without owning Sony. Also, I don't think an Apple TV set really makes that much sense either to begin with when a continually improving set-top box will do. Just how important is it to have the Apple logo on the TV set?
You do make a good point about simply making their own IPS-based LCD display and contracting Samsung or LG to make it. That would be the route I would take, and it's the route Steve has taken for iPhones. Why would he mess with success with an all-in-one TV? That said, it seems like the all-in-one TV/media player/5.1 audio system is what's on Apple's mind, and Sony's expertise could, in theory, get it done.
If Apple decides they need an audio system (which I highly doubt), they could spend far less on a company like Bose. But then, why would Apple want to compete with other audio system makers that they're partnering with to put in AirPlay in all of their future systems as an industry standard?
Also, what if Bose is not for sale? And Bose doesn't have the combination of media content and A/V expertise of Sony. One deal to rule them all, etc. etc. etc.
If Apple wanted to just cherry-pick certain businesses and assets of Sony, they'd have to divest a whole bunch (a great majority) of the remaining businesses that are not profitable and that just do not fit into where Apple is going. That would mean selling those assets off to Sony's competitors and laying off many tens of thousands of employees. It would end up looking like a fire sale of what was once the prime symbol of Japan's rise as an economic superpower. No, Japan wouldn't have any of that.
I found a loophole to this potential issue: Apple could choose to simply purchase the American subsidiary of Sony, also known as Sony Corporation of America
. This subsidiary owns Sony's music and movie arms, as well as Sony Electronics Inc, which controls production of televisions and audio systems. In other words, everything that I believe Apple needs, and nothing more. Here is a list of products under Sony Electronics
. During or after acquisition, Apple could simply sell back to Sony of Japan all the divisions they don't need, such as the "Business Solutions", Vaio, and Broadcast divisions.
Purchase of simply the American arm of Sony doesn't include the intellectual properties of the PlayStation, and leaves Sony Worldwide otherwise intact and autonomous of Apple. This should pass Japanese muster.