Rumours Gone Wild: Apple to Acquire Sony Ericsson?

by Jeff Wiener on October 29, 2010

At the outset, I will admit that like several of the writers here at theTelecomblog, tech and telecom speculation is for me what the latest news about Justin Bieber is for just about every teenage girl on the continent. Whether or not any of the rumours turn out to be true seems to be almost a side note, as the discussions themselves let me dream about what the future of the tech industry might be. But that being said, sometimes the rumours are so outlandish that even I struggle to entertain them.

Just a few short days after the world said goodbye to the WalkMan and was possibly introduced to the PSP smartphone, Sony Ericsson is once again in the news, this time over speculation that tech giant Apple is looking to acquire the company in what would become the biggest tech merger in recent history.

But does a merger between these two technological behemoths make any sense for either company? Perhaps tracing the roots of this latest tech fantasy will help us make sense of story, because in my opinion it simply can’t be true.

Before delving into the origins of this story, lets entertain the notion for just a moment: On the one hand we have Apple, makers of the iPhone and iPad, the world’s most popular devices in their respective mobile categories. Beyond this, these devices are quickly becoming the default choice for business and for gaming, although neither device particularly excels in either category.

Sony, for its part, is a highly successful producer of all sorts of different technological products, from televisions to gaming systems, from music to music players, Sony makes it all. So for interest’s sake, would a merger make sense?

Both companies are clearly on an intercept course in both the gaming and smartphone markets, with Apple releasing its revamped Apple TV and Sony Ericsson, the speculation goes, set to release a high end gaming smartphone. Both are looking to horn in on each other’s ‘territory’ and the last thing both companies need is one more competitor wresting away valuable market share.

So it doesn’t take much to imagine a merger that would allow Apple—and Apple TV—access to the millions of Sony televisions across the continent, and Sony access to Apple’s strong line-up of devices. The possible technological advancements and innovation are enough to make one salivate.

But now let’s get real. Most critical analysts trace the roots of this speculation back to a comment Apple CEO Steve Jobs made during his company’s recent earnings call. When asked about what his company planned to do with the estimated $51 billion in cash it had lying around Jobs replied, “We would like to continue to keep our powder dry, because we do feel that there are one or more strategic opportunities in the future.”

Now just take a moment and read that quote one more time. Clearly Jobs is alluding to the fact that his company may have ideas for how it plans to use the money, but trigger-happy—or should I say rumour-happy—analysts quickly jumped on that with speculation that Jobs had the likes of Sony, or Adobe (that would make me laugh), or perhaps even Wal Mart in its sights. All of which, sadly enough, is competely unfounded.

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