Commentary

I'll Take a Sony on the Rocks... With a Nokia and RIM Chaser

On the heels of Apple's ascendency to the market cap throne, and Google's brazen proposed acquisition of Motorola Mobile, one must ask:  "Where is Microsoft?"

Think about it -- Apple has become dominant, by controlling the operating system, software and hardware, while providing users with a consistently elegant and fairly trouble-free (though at times, quirky), experience.  However, without mobile, Apple would still rank well below Microsoft.  And it's hard to rationalize that Apple's dominance in tablet computing could have occurred had it not been for their mobile pedigree -- brief as it has been.

Meanwhile, Google has signaled to the world -- read: Apple, Microsoft, HP, Amazon and Facebook -- that mobile will become their leapfrog platform, too.  Google wasn't the first to see acquisition as the fastest path to mobile -- this week's announcement come only slightly more than a year after HP acquired Palm for $1.2 billion, last July.

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And let's face it -- beyond X-Box, Microsoft has not been successful delivering hardware to the marketplace -- though I still contend that UltimateTV was the best DVR created in the early 2000s.

That's why I think it's time for Microsoft to consider making its move into mobile -- and while they're at it, into elegant hardware, too.  A Microsoft run at Sony would be a great idea, right about now.  And while they've got the massive wallet open, they should pick up some Nokia, or Research in Motion, too.

From a corporate culture standpoint, sure, there are going to be clashes. 

Let somebody else write about that; this idea has too much potential to worry about personalities. First, look at the numbers. Both Sony and Nokia have hauntingly similar market caps of $22 billion -- and RIM hovers at slightly more than half, at around $14.0 billion.

A look at Microsoft's June 2011 balance sheet reveals that nearly $53 billion of their $75 billion in current assets are in the form of cash and short term investments -- more than enough for an unleveraged grab of Sony -- plus, either Nokia or RIM -- with room for a 20%+ stock premium for all involved. That's even after the recent Nokia and RIM run-ups, following the Google/Motorola news). 

Heck, by pocketing their receivables, Microsoft could acquire all three, and have billions left over for a future run at... Adobe? So, at least this pencil's out, up front.

And then, there are significant potential synergies, and existing relationships, in place already.  Sony has a presence in mobile, though currently heavily weighted on the Android platform.  They also consistently bring elegant, well-designed (near Apple-esque) desktops and laptops to the marketplace, all already supporting Windows; the Sony design DNA bodes well for a Microsoft run at Apple.

And of course, there's the potential resulting merger of X-Box and PlayStation platforms -- and their cumulative user bases of 85 million, which would surpass Nintendo's by approximately 10 million users.  Both Microsoft and Sony have seen game sales eroded by Apple, and with nearly 50,000 game apps in Apple's App Store, and the launch of Apple's X-Box-Live-like Game Center, it's possible that Microsoft could prove to antitrust regulators that a Sony acquisition is a prudent and necessary action to defend against the Apple onslaught, on multiple fronts.

On the purely mobile play, Nokia has already agreed to work with Microsoft's mobile platform, and Steve Balmer's May appearance at Orlando's Blackberry World conference, and RIM's decision to support Bing search and maps, have already stirred up RIM acquisition rumors. 

It certainly would be interesting to know if any Microsoft ambassadors have made a recent trek, south and east, to RIM's Waterloo, Ontario, headquarters. 

Talk about a Waterloo moment.

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