Apple Should Buy Sony | Hacker News Reader

Apple Should Buy Sony

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48 pointskawera74 comments

This got me wondering, who else should Apple buy according to submissions to HN? A quick search [1] reveals:

"Hollywood," Twitter, Tesla, "big companies," Yahoo, Netflix, Twitter (again), "a university," Tesla (again), Amazon, Disney, Yahoo (again), Facebook, Tesla (third time), "TV networks," Tesla (4th time), Nokia, foursquare, Skype, Infineon, Netflix (again).

I attempted to de-dupe things by eyeballing it (e.g., the multiple nintendo ones, etc.) but could have made missed something.

[1] https://hn.algolia.com/?query=%22apple%20should%20buy%22&sor...

Free karma to anyone who wants to add those up and see if Apple actually has the cash to do it.

I'll bite. Apple's cash on hand in Q3 was $261.5B.

  Company     Market Cap ($/Billion)
  -------     ----------------------
  Twitter     12.6
  Tesla       57
  Netflix     76.5
  Foursquare  0.7
  Nokia       34
  Time Warner 85  ('tv network', 'hollywood', with some additional overhead)

Totals to $265.8B, just a hair over our imaginary budget if they did a 100% buyout. Presumably, Apple would sell off parts of Time Warner that weren't The CW, HBO, Warner Bros.

What Apple would have had to pay for Yahoo would have varied quite a bit(+/- $40B?). Nintendo($53B) and Disney ($154B) are a bit further of a stretch. Amazon($460B)/Facebook($492B) are more than half the size of Apple, effectively out of reach.

They'd probably have to pay taxes to repatriate that cash to buy those firms, however, and buying a firm has costs of its own (not just overheads, but you obviously need to pay more than the market cap usually). So this amount is well beyond reach (using only that 260B cash on hand, and wtf that's an unimaginable amount).

You don't need cash on hand for the full price of a company. ~10x leverage is possible so they have a ~ 1-2 Trillion dollar budget.

PS: They can also create a foreign subsidiary to make the purchase thus avoiding taxes.

Definitely. But the parent poster I was replying to was suggesting you could do it merely with cash in hand - and that's not going to be doable. I mean, I'm not saying the scenario is particularly realistic: it's an absurd hypothetical wherein they'd want all these companies, and want to use cash alone to boot :-).

There are several angles to analyze this...

1) Based on previous Apple acquisitions[1], acquiring a multibillion dollar conglomerate like Sony really hasn't been part of Apple's playbook. Things could change of course, (Tim Cook philosophy different from Steve Jobs, etc). If Apple somehow did buy Sony, they'd probably end up doing a carve outs for the pieces they wanted (like Google did with Motorola.)

>Cornering the imaging sensor supply. The image sensor is a critical component of the iPhone.

2) Buying Sony to get the image sensor and exclude everyone else also seems very un-Apple like. Apple seems to enjoy being a supply-chain orchestrator and keeping hardware manufacturers at "arms length" via contracts instead of owning complicated fabrication facilities. E.g. Apple didn't seriously entertain buying Corning to "own the Gorilla Glass facility"; if other smartphones got Gorilla glass, no big deal. What's the convincing business case for Apple to prefer acquiring Sony instead of just negotiating a multibillion dollar supply contract?

>Acquiring Sony would give Apple a huge competitive advantage: access to the most advanced chips of the industry, ahead of its smartphone competitors. Given the camera's importance to the iPhone, this is a strong competitive argument against Samsung’s Galaxy or Google’s Pixel.

3) The smartphone camera's quality being perceived as #1 may not even be strategically important to Apple. In the last ten years from 2007 until now, was Apple iPhone ever #1 in camera quality? It always seemed like Samsung/Lumia/Google had the better cameras and it never seemed to bother Apple. Maybe the journalist is overemphasizing the camera's importance? (Unless future cameras' sensor qualities are more integral to upcoming "virtual reality" apps and Sony has secret sauce for that scenario that nobody else has.)

[1] https://en.wikipedia.org/wiki/List_of_mergers_and_acquisitio...

The quality issue is really interesting. I used to have the Lumia with the 40MP camera. The image quality was, in general, significantly better, and for low light photography (for example a baby sleeping in a room with the drapes closed) exceptionally better.

But. And there's always a but. Apple seems to have payed way more attention to the user experience of taking a picture, so while I could adjust everything on the Lumia, and potentially get a better picture, just taking a snap was so unbelievably slow, the lag between clicking and the image being taken was slow, and the time between taking pictures was slow, so my wife with an equivalent generation iPhone could take 10-20 images in the time it took me to take one.

Quality has to be understood in the context of the whole experience, not just the final image.

I still keep the Lumia charged, years later, because there are times when it makes a decent digital camera... YMMV

Being able to take pictures quickly does depend to a considerable extent on the quality of the sensor; getting all that data off of it isn't trivial; and analyzing it to pick a focus and other settings is similarly hard to do quickly. And as it so happens, that's perhaps one area where sony is most ahead of the competition. Sure, their sensors have some slightly better technical characteristics in a lab (e.g. noise, dynamic range), but I kind of doubt they're enough to make a really noticeable difference compared to the competition. But they are really fast; e.g. show-off stuff like their relatively new RX10 gen 4 (see https://www.dpreview.com/products/sony/compacts/sony_dscrx10... ) have some fairly interesting features precisely because they're so fast. 24fps full phase detection autofocus? And it may well be able to do some image analysis to even detect, follow and focus on moving eyes at that speed? For frame of reference, canon's top end pro stuff (1DXm2) has around the same resolution, and just 16fps, and nikon's D5 "just" 14fps (not that they're really competitors, but just to give you an idea of what's technically high-end).

Speed matters, and that's not really primarily a UI issue; it's to a large extent a technical challenge too. Shutter lag isn't new, and it's been an important stat for a loooong time. Even without any further information whatsoever, I'd be willing to bet that the lumia's shutter lag wasn't just a matter of poor UI or camera app software; but also one of sensor and other imaging limitations.

TL;DR: if your old iphone had used your old lumia's imaging hardware, it probably would have been slow too.

1) I think there's the possibility of a symbiotic relationship between the results of a Sony acquisition and Apple in a great number of areas, as the original author points out, however culturally it would be difficult and it would break away from apple's traditional mantra...

2) A quick google search finds that they own two production facilities (one in Mesa, AZ, one in San Jose) though you're right that using either of these facilities or ones acquired through Sony would be a departure from what we generally know.

3) Very subjective - even among DSLR manufacturers, depending on who you ask, who is #1 in cameras varies greatly. Taken at face value, DxO Mark recently declared[1] that the iPhone 8 Plus had the best smartphone camera available. It's definitely one of Apple's talking points during product announcements, but non-smartphone camera market seems to have devolved into a niche these days[2].

Aside from IP I'm not sure there's value add to the smartphone market that Apple can obtain from Sony and moving into the DSLR space, while potentially exciting from a photography perspective, it seems to be a declining market. Then again, maybe DSLR photographers are the ones who have moved away from flickr.

[1] https://www.dxomark.com/apple-iphone-8-plus-reviewed-the-bes...

[2] https://www.flickr.com/cameras

I also don't buy the image sensor argument - Sony isn't hoarding the best sensor designs for itself - they actively develop and market image sensors of all varieties and use cases to OEMs.

Apple doesn't need to buy Sony to get access to Sony's latest and greatest in sensor tech.

> "In the last ten years from 2007 until now, was Apple iPhone ever #1 in camera quality?"

I'd strongly argue yes, but I think it helps prove your point. Apple's cameras have been top-in-class for a lot of reasons that have little to do with image sensor tech.

Lots of people prefer Apple's camera over other phones because of non-sensor advantages: shorter camera launch time, less lag between shutter press and actual image capture, faster focusing, better/more pleasing flash (that doesn't make you look like a zombie), post-processing, and now features like editing the lighting conditions after the fact.

I think it's becoming clear that, while image sensor tech will continue to improve, big gains in camera functionality and quality are increasingly driven by software advancements.

Sony's best image sensors are limited to Sony devices though. See the α7rII and the α9.

They are making huge strides in the mirrorless camera game at the moment, they've started what could be the drift away from DSLRs for professionals.

>Apple didn't seriously entertain buying Corning to "own the Gorilla Glass facility"

Cuz they already bought a Sapphire glass factory in Arizona

https://www.digitaltrends.com/mobile/apple-sapphire-screen-s...

Doesn't seem like Apple actually wanted to buy a glass factory. They just got "stuck" with it because GT declared bankruptcy. Excerpt:

>, through an auction of between 1,400 to 2,000 of GT’s sapphire-making furnaces in November. Proceeds are to be split between Apple and GT, according to court papers, and any unsold equipment (with the exception of 600 furnaces that GT Advanced will retain) will be given to Apple for scrap.[...] Apple has announced plans to repurpose the facility as a data center.

what happened was, apple went to a furnace company and said we want a lot of furnaces. then later they said we also want you to run the furnaces and make glass. the company couldnt deliver because that wasnt what they did and it was outside the scale of anything they did before.

the company declared bankruptcy because of the apple investment. apple basically created a glass factory out of thin air in somebody elses name, and it failed to produce.

This is very simplistic. There is a lot more to consider in potential M&A than just raw numbers. Cultural fit, how it changes relationships with other suppliers, laws and regulations, management, etc.

I'm not persuaded the current Apple-Sony relationship is such that a drastic move like an acquisition is necessary..

Something in the article that made me go: "Wait, what?"

Apple is paying 17% average tax rate, and is in red, yet Coca-Cola does the same, yet is in green.

What gives?

Apple presumably invests more.

The image in the article you are referring to is not from the article. Rather, it's from L2Inc. Why they have them in? I don't know, but at a quick glance, the video this was sourced from was specifically talking about those bottom 4 companies.

I noticed that too. The graphic is also missing all context, like what countries the companies are paying taxes in, which matters because different countries have different tax rates, and just because one company is paying more taxes than another doesn't mean it's doing any more to "pay [its] fair share to the national economies", it might just mean that it has more revenue in countries with higher tax rates.

maybe it's 16.5% VS 17.4%?

Reason 3 of the article focuses on the PlayStation ecosystem. This fails to address the PlayStation software. macOS and iOS share a common architecture. TvOS and watchOS are derived from iOS. Aside from patents, Apple would have little use in acquiring the PlayStation OS because it wouldn’t be possible to integrate without considerable rewriting (I can’t imagine Apple maintaining it separately).

What is more likely, given Apple’s actions in the past, is iterative development of game technology atop Apple’s existing technology. Acquiring the PlayStation software would not be strategically useful.

Playstation is based on FreeBSD, and Apple's OS also comes from BSD, apple's UNIX underpinnings are basically FreeBSD userland. I'm sure there is a lot of technical gotcha's here, but they are not at complete technical odds at an OS level, like say Apple buying Microsoft would be(which would just be a disaster for everyone).

Besides the funny fact that many years ago people would blog that Sony should buy Apple, I don't think this is a good idea. In general, I don't think anything good comes out of a large company buying another large company. We get less variety and competition. Sony once was, what Apple is now, a company which would create very unique and beautiful pieces of technology.

Their advertising slogan "It is not a trick, it is a Sony" really held true - they would come up with very innovative and nicely designed things. But while a shadow of its past, the old Sony is not gone. Their camera division currently is making the best sensors on the market and their A7 mirrorless line is very popular for a good reason. Being bought by Apple would probably destroy all of this.

Apple buying high-tech startups and small companies completely makes sense. They cannot compete with the industry giants, so being bought means that their technology comes to market faster. But for an established company with their very own line of products it would possibly mean destruction as Apple most likely wouldn't allow them to keep their own product lines.

Oh, I don't think there's any doubt it would be terrible for consumers if apple bought Sony.

But as I read it, the article suggests it would be good for Apple to buy Sony. And that's a little more plausible. Although history does seem to suggest that such a merger would destroy lots of good bits of Sony, as you point out, which wouldn't just be a shame, but also a rather expensive shame.

This assumes that a large Japanese conglomerate would agree to (and be allowed to) be purchased by a large US corporation. While Sony is not quite as connected to Japan as Samsung is to South Korea, it would still be a major blow to Japanese national pride and autonomy.

Highly doubt a Japanese company would allow a takeover from an American one.

Yes. If that was possible, I'd have said Google should acquire Sony instead.

For some reason that would make more sense to me than Apple buying Sony. Then again, Apple getting Beats/DrDre was a weird one for me too, so what do I know... ;-)

Sony has hardware and content, Google has software and OSs. Put them together and you've got an Apple's worth of end-to-end integration. Well, plus a gigantic media wing that would probably end up getting in the way.

Imagine a merger between the Playstation and Android/AndroidTV ecosystems. Sony's content all getting prime space on Android's Play Store. "The Sony Store" becoming Google's answer to the Apple Store..

Yeah, something like that would never happen.

https://www.wsj.com/articles/taiwans-foxconn-completes-deal-...

Sony ? I do not think so. Sony Entertainment ? Very likely! Apple knows that devices and software on their own have no value (for your average joe customer). It's the content that matters and in my humble opinion Apple will aim at companies like Netflix,Spotify etc first before acquiring tech companies.

Why buy any company when poaching is working just fine?

https://www.bloomberg.com/news/articles/2017-09-21/apple-s-g...

Ughh, I hate when articles (and even HNers) use this offensive term. The word "poaching" implies that we tech workers are property like fish and wild game, owned by our corporate lords, who are trying to prevent others from "stealing" their property. Sorry, but as far as employment goes, we have agency and free will to come and go as makes the best sense for our own careers. Our relationships with our employers have nothing to do with ownership of our person--I am not being "stolen" if I deliberately choose to change jobs.

You are being stolen if someone makes you an unsolicited offer you cannot refuse.

> “Future operating results depend upon the Company’s ability to obtain components in sufficient quantities on commercially reasonable terms.”

I can see how acquiring Sony would perhaps solve the "commercially reasonable terms" part of this equation, though no doubt Apple has quite a lot of leverage here already as the largest buyer of such sensors in the world, but how would it solve their ability to obtain components, especially on 1M per day iPhone scale? That's surely always going to be dependent on outside factors - mining, shipping, freight etc? For all the effort it would take to integrate a slow growth Japanese business with a huge cultural difference, it doesn't at all seem worth it.

If Apple would buy anyone it would be a flash memory supplier. Which they are almost doing (Apple-Bain Consortum purchase for $18 billion). There was a recent price hike on their store on larger flash memory sizes.

See http://news.softpedia.com/news/apple-bain-consortium-acquire...

Sony doesn't make sense.

Movies catalog and Playstation Ecosystem are either expensive or Apple doesn't want to go into content production they want to do distribution.

Image sensors are still competitive with other phones if not better.

Apple has used Sony sensors repeatedly. I can't remember an iphone without one, and some googling shows that the past three generations (6, 7, 8) have used sony sensors.

If anything, flash is a poor bet for apple. Sure, there's a shortage now, but there are several suppliers to choose from; and if anything the high prices hurt low-end supplies more than apple. The status quo may not be ideal, but it's relatively benign. And the flash market has had quite a few ups and downs; buying a supplier risks being left with a dud if the market crashes.

Sony sensors have competitors; but unlike flash they're not quite as interchangable; and sony's tech seems to be not just the most predominant, but also the best in the business. Keeping the best stuff for itself could well be an actual advantage for apple, unlike with flash.

Not that I'm saying it makes sense, but it makes more sense than buying a flash producer.

it would be a huge mess. Somehow integrating Sony into apple ecosystem. Its cheaper just to buy what you need from them.

The movie business and playstation lines alone would make sense for Apple. Most other product lines would be liquidated. The playstation technical employees would probably not have any job changes. I would suspect the codebase of Playstation would remain the same, except for supporting Swift as a language on the platform.

I'm not sure how long the Apple and Playstation stores would take to be integrated, but they would probably make that happen.

Beyond that there could be many opportunities to integrate apple hardware with your playstation account.

I have always said Apple should buy Nintendo. Much better fit, much better synergy. Imagine what a competitive advantage they would have with Nintendo exclusives being brought to iPhone? - The Nintendo switch is already basically an iPad in a dock, Apple could release a Nintendo dock for iPad that comes with game controllers. The iPad probably has a better GPU too.. $700 buying you an iPad as well as a Nintendo gaming device with better graphics power would be an incredible value proposition. The companies share a similar culture - user experience, family friendly and a cult like following. Would be super interesting as long as they didnt kill Nintendo.

Sony's practically the only option if you want elegant, high-quality tech without the Apple logo :/

Samsung.

You're kidding right? Half the garbage I've seen has a Samsung logo stamped on it (if not LG)

Nothing about Samsung products are high quality. I’ve owned Phones, Tablets, microwaves, dishwashers and other appliances. The quality has been middle of the road to crap across the board.

Samsung jumps into new features just to jump in, doesn’t matter if they work reliably or not.

No! They're just about the only source for a small but not low-end Android phone these days.

Does Apple acquire?

It'd be difficult/weird for them to start integrating/selling Android devices/ecosystem, which feels like they'd be putting their feet up for a few years while Google continued advancing. It feels antithetical to their business model.

They do, but typically in a more focused way (e.g., Beats).

https://en.wikipedia.org/wiki/List_of_mergers_and_acquisitio...

Sony would be a weird one.

>To put things in perspective, with that amount of money, Apple could acquire General Electric, Samsung or Royal Dutch Shell.

Samsung has a market cap of around 250 Billion USD. To suggest that Apple could even afford to purchase Samsung is naive.

And the article points out that Apple currently has 262 Billion USD in cash. I don't see anything naive there.

And the article is wrong. Samsung has revenue of 300bn and totals assets of 600bn. Why would they sell for so little as 262bn ? Or were we talking just about Samsung Electronics ?

The article didn't say anything about Samsung's numbers. I was replying to bitmapbrother who quoted a value of 250bn. In that case, I didn't understand how 262bn>250bn was naive. If the numbers are actually 300bn and 600bn, that's a different story.

I don't believe you fully understand the economics of acquiring companies.

No, I don't, which is why I posted my comment. To me, if Apple has the same amount of money as Samsung is worth, then it makes sense that they could buy them. But your comment makes it sound like that's an absurd notion.

A couple of things to take into account, and there are many more, is that Apple would have had to pay a premium for the Samsung shares. If we look at the time Microsoft tried to acquire Yahoo, Microsoft they offered a 62% premium on the price of the stock. You also need to take into account how much cash reserves Samsung has which I'm estimating to be around 75-85 Billion USD.

Apple is already making their own SoC. Could they also make their own ISP as well? I realize Sony is the top player here, but this is Apple we're talking about and they have boatloads of cash and competent engineers.

And the SoC skills came from an acquisition.

https://www.extremetech.com/computing/142553-apple-acquires-...

Here's a great counterpoint to corporate consolidation in general: https://www.youtube.com/watch?v=00wQYmvfhn4

Mergers and consolidation do _not_ help anything. We need _more_ competition, not less. Large corporations are not focused on innovation, which Apple usually pursues

To this day, I don't understand why Apple didn't buy Nest instead of Beats. I still don't understand the Beats acquisition.

I’m guessing given Apple’s previous somewhat close relationship with Honeywell (they already make several HomeKit enabled devices) sort of precludes the need to bring that sort of thing in house for now.

They were trying to get Dre and Iovine in the door to help with Apple Music? In addition they got a buzzy hardware line of headphones that would compliment their existing stock stuff for retail?

Nest had a huge investment from google already, so I doubt they were keen to sell to Apple.

Add to that Tony Fadell's history with Apple may have also made that deal tricky.

Given the shocking state of nest these days I think Apple dodged a bullet on that too.

Think about the synergies, Beats produces over-priced mediocre quality headphones with big marketing dollars spent on celebrity endorsements. Their brand had pretty good value to earn high profits which Apple must have found a good deal.

All of Apple Music, their entire relationship with the music industry, is the result of the Beats acquisition.

They also ended up with some headphones which are popular with a young crowd, but primarily it seems like they wanted the core of Apple Music.

I highly doubt that would work out for either of them.

Oh god please no. Sony are my favourite Android phones. I don't want to see them dumbed down and "artistically designed".

Glass backs.

Blech.

There is not a glass back on their newest, XZ Premium. Still no removable battery, though, it does still have a microSD slot.

That's great news! I used to buy the old z[123] compact series, but that glass back... I've got kids and it just doesn't work anymore. A phone needs to have some modicum of robustness to be useful. The ancient, crappy looking samsung s4 I now use is sadly functionally superior to the sony and apple high-end phones, simply because it doesn't shatter when dropped - instead, the plastic back cracks open (again), and maybe the battery get's detached. It's like an unintentional airbag. And it's not like that's a really robust phone either; pre-smartphone phones simply outclassed today's stuff.

Seriously, high end phones these days are a joke. They're not even trying. What the beep happened?

The whole Xperia X* series has plastic backs.

Also, not like iPhone didn't start with it.

Yeah, they're not the only ones with that misfeature. I gave up on the series for this reason (not joking!) - but now I hear the xz premium doesn't have em anymore, so hey, maybe I'll switch back again.

Although I'm a little worried reading the spec sheet. Maybe this is the first ever phone with a 4k display that actually works, but I'm skeptical. Most are simply wasteful battery hogs that simply cost extra money to be worse.

Nintendo's Wii? Why are we comparing a 2013 console to one released in 2006?

How about Bragi...

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