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August 31, 2006

Speculation of A Sun Apple Tieup

posted by MR WAVETHEORY at 8/31/2006 01:38:00 AM
John Dvorak is speculating that Sun and Apple will tieup. I don't believe it will be easy. Dvorak argues "With Eric Schmidt in the game as a middleman it's quite possible that he could take the reins of such a combined operation and make it work." While I agree that Eric's leadership can be a great asset if the two companies merged, I don't believe these two companies fit together. Therefore, I disagree with John's premise that Eric will be able to bring it all together.

Apple and Sun are such different businesses that a merger won't make sense, because of architectural, cultural, and business reasons. Architecturally, Apple just made a big bet on the Intel platform for its iMacs. If Apple and Sun combine, it means that Sun will at some point have to make the switch as well. However, as Dvorak points out, "[Andy] Bechtolsheim, considered a genius by many, was brought back to Sun in desperation to reengineer its server lineup. There he developed the multiprocessor AMD-based line of systems that are cheap, reliable and very fast." Therefore, it would be a big change in technology strategy.

Secondly, Apple and Sun are very different places to work. Apple is a very centrally controlled place, where the charismatic leader that is Steve Jobs makes the most crucial business and technology decisions. Steve is a consumer products marketing whiz. Sun, on the other hand, is guided by Jonathan Schwartz who is much more of a tech guy - a software guy. And one can hardly call Sun a consumer products company. It sells big servers and big irons.

Finally, the businesses don't seem to have synergies. Apple sells to the consumer. Sun sells to businesses. I just don't see it. Do you?

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