The financial powerhouse Barron’s recently issued a report suggesting that Apple was looking at taking over Sony. From company culture clashes, to the complexity that Sony would represent given Steve Jobs’ massive focus on simplicity, I really doubt he’d want to do this. In fact, it’s only a thread of a rumor and there’s a ninety-nine percent chance it will never happen. But let’s put aside whether he would or not, because stranger things have happened. Who would have thought Palm or Compaq would end up as part of HP, that Apple would build a product like the iPod before they did it, or that Darth Vader would actually be Luke Skywalker’s father?
I bring up this last past because Sony, in a way, was the illegitimate father of the new Apple, because Steve admired Sony so much in the early years. I doubt, back then, he even imagined that his company would grow to eclipse this aging giant. But setting aside whether this is likely, what would Steve do to Sony, and why shouldn’t Sony do this to themselves anyway?
One of the first things Steve Jobs did when taking over Apple was eliminate most of the complexity. He got rid of most of the accessories, like digital cameras and printers, eliminated the Newton, killed off their corporate products, eliminated their clone efforts, and took the company back to basics. This was because the company had become an unmanageable mess, and he needed to take it back to its roots in order to grow a better company. This approach was pretty unique; most folks would have stepped into the CEO role and tried to patch things up. Had Steve done that instead, we likely would be talking about Apple in the past tense, and not the most successful company in the tech market at the moment.
Where do you even start picking apart this 64-year-old electronics goliath? Steve would likely start from where he thinks the company’s Sony’s core is, which is TVs, stereos, and game systems. He’d probably try to sell the movie business to Disney, and find a buyer for the professional cameras and content creation, or shut it down. Since he isn’t a fan of gaming, and the PSP competes with the iPod, he’d likely shut this down as well, because spinning it out might create future problems. However he might take the content side of this and retain it for iPads, iPhones, and iPod Touch products, which could turn the shutdown into more of a migration. He’d dramatically simplify the TV and stereo lines while eliminating any work on phones that competed with the iPhone. He would likely eliminate Blu-ray, because after some initial support, he now sees it as a train wreck and has lost faith.
He would then enhance Sony’s TV and stereo lines to make them work seamlessly with iTunes and Apple MP3 players. He’d immediately kill, however, the work with Google on Google TV, both because it competes with AppleTV and he doesn’t like Google very much.
Here is the big question: Would he retain the Sony brand? It is one of the most powerful in the industry, but Steve likes simplicity and would likely be annoyed by a product called the Apple Sony HDTV. My guess is that he wouldn’t, and would migrate the Sony brand to Apple over time.
Dealing with culture issues might be difficult, but Jobs has one major rule and that is there is only one boss, and that is Jobs. Japanese business culture can actually align with this, and after being cut to the bone and cross pollinated with a lot of Apple executives, I doubt if much Sony-only culture would remain. Steve has no trouble firing people, and his fear-based management style could actually be very successful in what was left of Sony. Disputes aren’t uncommon in Apple, but if they damage execution Jobs has no sense of humor and would eliminate those he thought were the problem. A couple of examples and the remaining Sony employees would likely toe the Steve Jobs line.
An Apple-Sony Merger: Potentially cool, but very unlikely
The end result of Steve’s pruning would be a much smaller Sony, more similar to the way it was in the ‘60s than today. But he would have a solid foundation from which to build a new media powerhouse, and the end result, after five to 10 years, could eclipse the reach and scope of the current Apple significantly, and maybe even firms like GE and Samsung.
So why doesn’t Sony just do this?
Because making a company vastly smaller only to rebuild later it dramatically cuts short term revenues and profits. Steve Jobs could weather this, but no other CEO likely could, which is why most would rather patch an leaky ship than rebuild it from scratch. It may be somewhat ironic that the only person who could turn Sony into a company that could again challenge Apple is Steve Jobs, and worse; that as obvious as that path to success is, Sony can’t take it without him.