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…..
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Apple needs Sony besides the sensors Apple pays Sony billions in royalties for content (video, music, games) think about Sony’s TV business, Playstation, crackle, cameras action cameras, Sony’s phone Xperia XZ the best 23MP
Forgot to include in parenthesis :Sony’s Patents, and other parts and components besides sensors that Sony sells to Apple.. Like Felica mobile payment system .. Apple may have issues with supply chain and 75% of sales come from only one product the cell.. phone **
Sony also has profitable Sony financial ( bank, insurance and now real estate) and aerosense the new drone division among other things
Thanks for all this additional information which is certainly pertinent to the question of whether or not Apple would be interested. As I concluded in the headline, probably not.
Oddly, I recall similar articles about Sony purchasing Apple during the poor performance years prior to the return of Steve Jobs.
Ah, yes, I’d completely forgotten that but I think I read about it in Walter Isaacson’s book. How things change….. The Apple story is really quite remarkable and I find it impressive that the board has resisted temptation to make big acquisitions. Very often such purchases turn sour and end up ruining the buying company — we saw a lot of that in the banking sector post 2008. The article I wrote was rather tongue in cheek and, frankly, I think Apple would be well advised to continue with organic development rather than going off at a tangent.
Right now, I am giving my camera love to Nikon, I am on another ocoloy… actually an ofocoloy.
As a matter of fact and following William’s logic below, Nikon would make a better fit for the role that you suggest Mike. Nikon has great sensors, great cameras, a huge customer base and most importantly a shortage of dosh and ideas, both things that Apple have plenty of.
Or Apple could do what Nikon themselves did, which was to do it themselves, they have created a new layout for a camera, with soft controls a la Leica T, Nikon popularised the SLR shape.
With mirrorless electronic rear displays for composition that appeared on Apple phones at around the same time as they appeared on digital cameras Apple have a lot of experience, they are also creating some very scaleable clever software. These days, the lenses are nowhere near as central to the design as they used to be either, software sorts out the various distortions that used to confound the genius’s that built the old lenses.
I think that phone cameras are becoming so clever that the "pixel" issue will not be an issue for long…. You want an A1 print…?
There’s an app for that sir!
Sony is a vast conglomerate producing everything from films and music to home electronics and cameras. The cameras are only a small amount (as is also the case with Fuji) of its overall business. The company also has a nice little sideline in producing sensors for other companies. Apple on the other hand sells many more cameras (in phones and other devices) than Sony does. Apple also likes to own the end to end stream with its customers and is not really a company that engages in ‘badge engineering’ or technology sharing.
I believe that stand alone cameras have to gain some of the features of smartphones if they are to survive into the future. If you are a young person looking at migrating to a ‘real camera’ the first question you will ask will be something like ‘how can I share these photos with my cousins in Canada or Australia like I can do with my smartphone?’ In addition the cameras in phones will continue to improve, narrowing the gap to ‘real cameras’. I could see Sony looking around to import the technology of phones into cameras, but the company already has its own range of Xperia phones. Going into a JV with another phone manufacturer would probably involve dropping the Xperia line which has never been as successful as its rivals.
There are ‘interesting’ times ahead for the stand alone camera with the financial difficulties at Nikon, the refinancing of Leica and the onward march of technology etc. I cannot see Apple and Sony getting together (apart from using sensors) in the short term, but we may see some unusual link ups forming in the medium term as the ‘shake out’ in the imaging industry continues.
William
Mike,
I’m afraid the only thing Apple needs from Sony is their sensors. The two companies couldn’t be more different in their approach. Apple wants to do it all for you behind the scenes with software and Sony wants to inundate you with options.
Furthermore Apple has no intention of handing over its happy snappers to Sony or anyone else.
iPhones camera sensors are made by SONY