Why Apple should buy Sony (but probably won't)
Hardly a week goes by without someone suggesting Apple should buy this or that chip maker, this or the other tech company, even a manufacturer of electric cars. Apple’s cash mountain, 90 percent of which is stored overseas to avoid US corporation tax, is said to be burning a big hole in the corporate pocket. It’s certainly a big pile, no less than $250bn, enough to keep many smaller countries of the world happy for a long time. So far, though, Apple has been as thrifty as Ebenezer Scrooge.
With this sum on its credit card, Apple could buy Royal Dutch Shell, never mind Tesla or ARM, and there is no shortage of advice on where to splurge next. Confounding all these rumours, Apple is actually very frugal with acquisitions and has preferred to return cash to shareholders in the form of dividends or share buy backs. And, because most of the reserves are untouchable, the company borrows in order to fund the expenditure.
There is absolutely no denying that Apple’s businesses are lucrative. They represent perhaps the biggest cash cow in history. The iPhone, for instance, may not be anywhere near the market leader in numbers but why worry about that when its profits represent 90 percent of all worldwide income from smartphones. Apple is the opposite of the old marketing fall guy, the busy fool. Everything it does has the Midas touch.
This week, though, my interest perked when I read a suggestion that Apple should buy Sony. It is, I understand, merely a suggestion, not even a rumour. Based on Apple’s past performance and preference, it remains highly unlikely. But, the more you think about it, the more it seems to fit. I quite warm to the idea.
Sony is a diverse company but at least two of its divisions would fit very well within Apple. Its music business, for one. But I’m mainly interested in imaging. Sony is the world leader in sensor technology and Apple is the world leader in smartphone camera technology. Imagine the two of them together, imagine how this could help Apple steal an unassailable lead in phone photography over the competition. But that's only the half of it.
Camera technology must be an attractive addition for Apple. At the moment smartphones — in particular the iPhone — are busy creating a whole new generation of photographers. The iPhone’s camera is so easy to use that it flatters to deceive. The results look great on the iPhone screen or on the iPad. Newer phones such as the iPhone 8 Plus and iPhone X are introducing many more creative techniques that will further convince users that they are natural pro photographers in the making and need something, shall we say, a little more serious in their talented mitts.
A large number of these new photographers eventually go on to buy a “proper” camera, at least one that looks more like a camera than a phone. There’s a natural inclination to assume that smartphone camera results can be improved by using a better camera with more megapixels and pro lenses. This isn’t a false premise, although the vast majority of iPhone photographers probably don’t need anything better. Not unless they are intending to do professional work or make large prints. For the 5.8in screen, the iPhone camera is the bee's knees.
Yet if Apple had an association with a leading camera manufacturer (or, for that matter, owned it) there are tremendous opportunities for added value. Sony not only leads the world in sensor technology, it has produced a range of pro cameras, from the little RX100 through to the new A9, that have shaken the camera world. I’m not a great fan of Sony cameras for reasons I’ve outlined before — including fiddly menus and too-frequent model changes without updating older models (something which Fuji does so much better). But I do acknowledge the excellence of the full-frame system that Sony is now developing. And only today there have been new rumours that Sony could eventually produce a medium-format camera to challenge Hasselblad and Fuji.
To my mind, Sony would be a perfect fit for Apple. The benefits for Sony’s camera division would be explosive: The association with Apple and the huge marketing impact of the dedicated Apple user base would transform the camera market. Sony could well become unassailable with that sort of clout behind it. Even I might change my tune and direct my love towards Apple-Sony.
We can all speculate…..