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Electronics giant Sony rumored for potential Apple acquisition - Page 6

post #201 of 214
Quote:
Originally Posted by mikemikeb View Post

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.

Are you asking if I think Comcast buying NBC is a good idea? Happens that I don't. As we've seen several times recently, the cable industry and the content owners are increasingly at loggerheads over how much the cable companies should be paying for content. Cable subscribers are often held hostage -- as in New York, where they won't be able to watch the World Series this year for that very reason (assuming they're interested in any baseball games where the Yankees aren't playing, but that's another story). Put one of those content producers under the same roof with a cable company, and you've only multiplied the problem by increasing the conflicting interests.

Yes, Apple retails, and like any other retailer, they make deals with manufacturers. If the terms aren't right, the manufacturer walks -- to another retailer. Musicians don't drive the music industry, and if you don't believe that, try asking one. They're the flea on the tail of the dog -- when they're lucky. You also forget that not all musicians are exactly thrilled with digital distribution.

Apple and iTunes are big, but not so dominant that Apple can call the shots. Amazon and other music retailers have received deals from the industry that Apple has not. We've seen other signs of chafing. The industry clearly is very keen to not give Apple too much power over them, and so the situation remains quite fluid, particularly for TV and movies, a retailing area in which Apple has not been nearly as successful as music. If Apple becomes not only a big, demanding retailer, but also a competitor -- then look out below. Run this big, risky and expensive experiment just to see what happens? I don't think so.
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post #202 of 214
Quote:
Originally Posted by Steve-J View Post

They have extensive IP. They also have lots of proprietary stuff, like Memory Sticks and Mini Disks. And they make zillions of TV sets, each of which cold have Apple TV built in, to compete against Google TV which is going to come built-in.

Here's what the Financial Times speculates:

It is surmised that Apple is primarily targeting Sony's gaming segment which includes its PlayStation line of products. Apple lacks a significant presence in the gaming industry where Microsoft, with its Xbox line of products, and Nintendo are major players. ...

Another area which could be appealing to Apple is Sony's semiconductor business as Apple attempts to closely integrate its hardware with the software. Sony has developed a new CELL processor with Toshiba and IBM which enhances multi-media performance and vector calculation devices. ...

However, Sony is a diversified company with interests in electronics, gaming, media and financial services. Thus an overall Sony portfolio would not fit into Apple's strategy. Also Sony is a key Google partner; it recently released Google-TV powered HDTV models.

True that. And rumoured PSP phone is expected to run Android 3.0.

That hardly sounds like a company flirting with Apple.
post #203 of 214
Apple would have to offer a substantial premium over the current stock price, so they'd probably have to spend at least $42 of the $51 billion to acquire Sony, which is currently worth about $38 billion, but even if that were offered, I don't think the Japanese government would permit it.

It would be interesting to see what Apple would do with it. Even though Sony would still have it's own CEO, you know that Jobs would get involved. Jobs is brilliant at stripping down things to their essence, but the question would be is whether stripping down Sony and producing far fewer products makes sense, especially considering their far-ranging capital-intensive infrastructure.

You have to wonder whether Jobs would resdesign Sony's products in Apple's image or vice-versa. But I'm sure Steve would love to get his hands on Sony's record labels and movie studios, which might be the main objective - it would let him do what we wanted for iTunes and it would supply movie content for Apple TV. However, the FTC might see this as a near-monopoly and only approve such a sale if Apple maintained a "brick wall" between the operations, because the other major labels and studios would probably object. But he could take the software and sell off or spinoff the hardware operations.

Attempting to buy Disney actually makes a little more sense to me. Steve could get back Pixar and also have access to all the ABC Network shows, although ABC doesn't own any cable channels. But that would require more money. ABC's market cap is about $72 billion and he's probably going to have to offer at least a 10% premium, bringing it closer to $80 billion. And I can only imagine what Steve would like to do with Disney World. Would there be a new Appleland theme park with an iPad ride?

What I think I'd personally like to see is Apple buy and reinvigorate Adobe. Or maybe even Avid, although it might be better for Apple users to have Avid as competition, to keep Apple's products "honest".

The other issue is whether any large acquistion would be such a drain on Apple management resources that they take their eye off the ball. It's not like Steve is a hands-off delegator.
post #204 of 214
Quote:
Originally Posted by mikemikeb View Post

So you're saying that Apple would find a way to reverse the current Sony MO of loss-leading on the hardware? I think that's what you're saying, and if so, that's a good thing, as Apple isn't a company who is a loss leader in hardware.

That's right, they would simply find a way to sell games without losing money. The video game streaming services gaining some traction are an ideal way to do that as they offer compile once that works on iPads, Macs, PCs, TVs so it may be that Apple are just going to wait out the technology barrier that they can't fix before pushing that angle. In the short term, they could use the existing Macs to push games to the TV via Airplay and inexpensive ATVs.

There are enough Macs out there now to turn them into a gaming platform. When I see the Mac Mini and compare it to an XBox, as I said earlier, the performance with the 320M isn't that much different. The 320M IGP is somewhere between the Wii and the 360. Low powered, quiet but very powerful.

The important part is the games and Sony own some great studios like Naughty Dog, Sony Bend, SCE, Polyphony Digital.

Quote:
Originally Posted by mikemikeb View Post

Why own a redundant division like the computer hardware division (Windows computers)?

To get the engineers working on Apple hardware. The Vaio Z-series laptops are amazing pieces of hardware. They built their own 512GB SSD part that runs at over 300MB/s, double what Apple's part operates at (mainly because it's two of them in RAID-0), they got a 330M GPU in there (same as the MBP), a 2.8GHz i7 processor, 8GB RAM, 7 hour battery, SD slot, expresscard, 1080p screen, HDMI, VGA, 3 USB ports, gigabit ethernet and a freakin' Blu-Ray drive in something around the size and weight of a 13" Macbook Air. Not as thin but the same weight, which is mostly what matters.

Sony is the only company in the world that can put Apple to shame in terms of technical (not aesthetic) design. A buyout would remove the 'Apple' of the Windows PC world. That way when someone asks what the best quality PC to buy would be, a retailer simply couldn't say Sony, they'd have to say Apple or they'd drop down to Lenovo but the quality difference between Apple and Lenovo is much clearer than between Sony and Apple.

Quote:
Originally Posted by mikemikeb View Post

What would a consumer-oriented company do with Sony Broadcast (professional TV cameras like this one, etc.)?

One thing they could do is control the process from capture to edit. Sony have too much weight here and have thrown ridiculous formats onto consumers like AVCHD and Memory Sticks. Apple could at least ensure that the capture format can be played back reasonably well and converted to ProRes when appropriate even if they default it to downsample to 720p. I'd say the vast majority of consumers don't need to be editing/authoring their content at 1080p.

On the professional end, they could make their mark too but probably less so than in the consumer space but Sony has a big consumer camera market too.
post #205 of 214
Quote:
Originally Posted by zoetmb View Post

The other issue is whether any large acquistion would be such a drain on Apple management resources that they take their eye off the ball. It's not like Steve is a hands-off delegator.

I agree with this point if not many of the others you've made. Distraction is Reason One why most mergers are a bad idea.
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post #206 of 214
Quote:
Originally Posted by Zandros View Post

Great! I want a slimmer PS3.

With wireless controllers you'd have to be careful how to hold.
post #207 of 214
Quote:
Originally Posted by island hermit View Post

This just in:

Apple, with a stockpile of $51 billion, is buying Bridgestone Tire...

... oh, just a minute...

... no... they are buying Western Coal...

... hold on.. no... they are buying...

How much is Brooklyn Bridge these days?
post #208 of 214
Quote:
Originally Posted by Dr Millmoss View Post

Are you asking if I think Comcast buying NBC is a good idea? Happens that I don't. As we've seen several times recently, the cable industry and the content owners are increasingly at loggerheads over how much the cable companies should be paying for content. Cable subscribers are often held hostage -- as in New York, where they won't be able to watch the World Series this year for that very reason (assuming they're interested in any baseball games where the Yankees aren't playing, but that's another story). Put one of those content producers under the same roof with a cable company, and you've only multiplied the problem by increasing the conflicting interests.

Apple owning Sony Records would put pressure on other labels, I'll admit. It also makes it more logical for all new artists to sign with Apple/Sony.

Quote:
Yes, Apple retails, and like any other retailer, they make deals with manufacturers. If the terms aren't right, the manufacturer walks -- to another retailer. Musicians don't drive the music industry, and if you don't believe that, try asking one. They're the flea on the tail of the dog -- when they're lucky. You also forget that not all musicians are exactly thrilled with digital distribution.

The customers drive the music industry. Those who don't like digital distribution have to deal with it. The Internet has changed the basic business model of the record business into a more commoditized system. Adapt or fail.

Quote:
Apple and iTunes are big, but not so dominant that Apple can call the shots. Amazon and other music retailers have received deals from the industry that Apple has not.

And sure, the content providers can try and level the playing field. But in the end, the users decide who to buy from. And at least with music, they have spoken: They want iTunes. About half of all music purchases come from there, and this percentage goes up and up with every year. They are moving away from CD's. If you take albums off iTunes, that encourages customers to torrent, not to download from Amazon, or buy a CD. How many people even know that Amazon sells digital albums? Of those that do know, how many of them know that Amazon's MP3's will work with their iPods and iPhones? They may not know that, but they know that torrented albums will work. So they'll torrent. That's lost money for the labels. They need iTunes. Apple has the leverage, whether or not they own Sony Records.

Quote:
We've seen other signs of chafing. The industry clearly is very keen to not give Apple too much power over them, and so the situation remains quite fluid, particularly for TV and movies, a retailing area in which Apple has not been nearly as successful as music. If Apple becomes not only a big, demanding retailer, but also a competitor -- then look out below. Run this big, risky and expensive experiment just to see what happens? I don't think so.

Apple won't buy something just to "see what happens", not with Steve at the helm. They will look at all strengths and weaknesses at owning content, and make a proper decision.

Quote:
Originally Posted by zoetmb View Post

Apple would have to offer a substantial premium over the current stock price, so they'd probably have to spend at least $42 of the $51 billion to acquire Sony, which is currently worth about $38 billion, but even if that were offered, I don't think the Japanese government would permit it.

Purchasing only Sony of America would reduce the costs, and fix the Japanese regulatory approval issue. Such a purchase would get Apple the content and TV IP, along with the computer hardware and audio hardware divisions. As I noted earlier, does Apple really need the phone or PlayStation IP that Sony of Japan owns?

Quote:
I'm sure Steve would love to get his hands on Sony's record labels and movie studios, which might be the main objective - it would let him do what we wanted for iTunes and it would supply movie content for Apple TV. However, the FTC might see this as a near-monopoly and only approve such a sale if Apple maintained a "brick wall" between the operations, because the other major labels and studios would probably object.

If the FCC doesn't require this with the Comcast/NBC merger, don't expect this with Apple/Sony Entertainment.

Quote:
Attempting to buy Disney actually makes a little more sense to me. Steve could get back Pixar and also have access to all the ABC Network shows, although ABC doesn't own any cable channels. But that would require more money. ABC's market cap is about $72 billion and he's probably going to have to offer at least a 10% premium, bringing it closer to $80 billion. And I can only imagine what Steve would like to do with Disney World. Would there be a new Appleland theme park with an iPad ride?

The iPad ride would be the least of Apple's concerns. Disney would cost more than Sony of America, and would not include any TV IP. Why do it?

Quote:
What I think I'd personally like to see is Apple buy and reinvigorate Adobe. Or maybe even Avid, although it might be better for Apple users to have Avid as competition, to keep Apple's products "honest".

The other issue is whether any large acquistion would be such a drain on Apple management resources that they take their eye off the ball. It's not like Steve is a hands-off delegator.

Apple could gain nothing from Avid, to my knowledge. The upside with Adobe is so small in comparison to the downsides (debt, buggy, bloated software with an iffy future). It makes no sense.
post #209 of 214
Quote:
Originally Posted by mikemikeb View Post

Apple owning Sony Records would put pressure on other labels, I'll admit. It also makes it more logical for all new artists to sign with Apple/Sony.

Pressure isn't the word I'd use. They will be given the choice of partnering with a competitor or not. The default position for any smart corporation is not, especially if they see their partner/competitor using that position to undercut them on marketing, price, whatever. The entire concept of all new artists having to sign with Sony under those circumstances is waaay out there. What would more likely occur is that the other entertainment companies would back other horses, of which they have several viable choices, and more coming on line all the time.

The situation is fluid. Apple is in a good position, but not commanding. They need cooperation. They don't make their case for cooperation any better by pissing off all of their partners by also becoming a competitor.

BTW, I didn't break up your argument into little pieces, as though they were disconnected thoughtlets. I'd appreciate the same courtesy.
Please don't be insane.
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post #210 of 214
Quote:
Originally Posted by zoetmb View Post

Attempting to buy Disney actually makes a little more sense to me. Steve could get back Pixar

You not seeing how Jobs operates.
Apple did not take over NeXT. NeXT took over Apple (and Apple paid for it to happen)
Disney did not take over Pixar. Pixar took over Disney (and Disney paid for it to happen).

C.
post #211 of 214
Quote:
Originally Posted by Carniphage View Post

You not seeing how Jobs operates.
Apple did not take over NeXT. NeXT took over Apple (and Apple paid for it to happen)
Disney did not take over Pixar. Pixar took over Disney (and Disney paid for it to happen).

C.

Intriguing.
post #212 of 214
Seems unlikely to me. I could see Apple buying Adobe though. Thats more realistic.

I don't see where Sony and Apple are compatible. Most of their products overlap and Sony is way too diversified for Apple's tastes. Apple focuses on a streamlined product lineup Sony is like a shotgun. They are all over the place.

I could see Apple eyeing the Playstation division though. That would make sense since Apple is turning more into a consumer electronics company now and an entertainment device is something they are missing. Though I don't see Apple taking anything on that might cannibalize its Mac sales.

What would be awesome is if Apple buys Microsoft. That would be insanity.
post #213 of 214
Even if Apple did not buy Sony they should enter a partnership so that Mac OS X can be the default OS on all Sony PC systems. Can you imagine how that could help change the computer industry if Sony dumps Windows and goes with OS X instead?
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post #214 of 214
Quote:
Originally Posted by DiscreetFX View Post

Even if Apple did not buy Sony they should enter a partnership so that Mac OS X can be the default OS on all Sony PC systems. Can you imagine how that could help change the computer industry if Sony dumps Windows and goes with OS X instead?

It wouldn't. Steve would never allow OS X to run on anything but his machines. Sony's computers would be discontinued and their manufacturing plants would be used to make Apple's computers. It's pretty simple. The only changes from a merger/partnership would be the death of all Sony products.

Originally Posted by Slurpy

There's just a TINY chance that Apple will also be able to figure out payments. Oh wait, they did already… …and you’re already fucked.

 

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Originally Posted by Slurpy

There's just a TINY chance that Apple will also be able to figure out payments. Oh wait, they did already… …and you’re already fucked.

 

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