updated 10:20 am EDT, Tue October 26, 2010
Rumor of Apple buying Sony spark Japan share chaos
Sony's share value surged by as much as three percent in Japan on Tuesday after a rumor that Apple was considering it a buyout target. The rush was triggered by speculation by Barrons that the company's $51 billion in cash might be used to buy a major company, with Sony as just one of the targets. Original author Eric Savitz has since said it was "pure speculation" and was likely taken too seriously by Japanese investors.
Apple chief Steve Jobs had defended the company's refusals so far to offer share dividends to investors as a deliberate decision to "keep our powder dry" and open the door to major acquisitions, but the company has so far given no clues as to possible targets, if any. Acquiring Sony would likely be impractical as it would force Apple to suddenly either support or kill off home theater, personal audio, Windows PCs and many other industries in which it doesn't have an interest. Such moves could also trigger concerns from Japanese regulators about a foreign acquisition of one of its most important economic contributors.
Historically, Apple has only ever acquired relatively small companies that either had a product, technological breakthrough or else pure talent that it wanted, such as the acquisition of Logic producer Emagic in 2002, multi-touch pioneer FingerWorks in 2005 or the buyout and shutdown of Lala this spring. Many have called for it to buy competitors, but many of these have established business contracts that Apple would either be forced to sustain or which it would likely lose to a company with a rival platform.