Pace EMBA - Presentation on if Should Apple Buy Sony?

2. Executive Summary
• Apple should buy Sony
• Content
• Gaming
• Expanded Market Share
• Cash Acquisition
• Challenges
• Cultural Integration
• Overseas Acquisition

3. Who is Sony?
• Originating Innovator (1st Generation)
• Sony has a unique culture which is firmly
rooted in history
• Japan’s “Crown Jewel”
• Japan takes extreme pride in the Sony brand

4. Sony’s Sales and Operating Revenue Per Product

5. Sony’s Decline in Product Revenue 2012-2013

6. Company Stock Performance - $100
invested on 9/30/07

7. Apple Needs Content
• Music
• Movie
• iTunes Radio

8. Fast Entry Into the Gaming Market
• Eliminate the need to develop
a new gaming device
• Merge Casual and Serious gamers
• Apple TV
• Sony PlayStation 4
• iPad/iPhone

9. Leverage Sony’s Television Expertise
• Single Source for Entertainment
• Onboarding Sony’s Technical Experts
• Apple TV
• Integrate Sony’s Portable gaming device
features

10. Apple Net Sales Per Region 2010-2012
0
5
10
15
20
25
30
35
40
Americas Europe Retail Asia-Pacific Japan
38
29
15
13
6
35
26
13
21
5
37
23
12
21
7
2010 % of sales per
region
2011 % of sales per
region
2012 % of sales per
region

11. Expanded Future Market Share
• Apple growth within Japan
• Increase Sales
• Brand Recognition

12. Financing the Purchase of Sony
• Use Overseas Cash to Buy Sony
• Tax Savings (2% vs. 35%)
$0.00
$5,000,000,000.00
$10,000,000,000.00
$15,000,000,000.00
$20,000,000,000.00
$25,000,000,000.00
$30,000,000,000.00
$35,000,000,000.00
35% US Tax Rate 2% Overseas Tax Rate
Purchasing Sony: Domestic vs. Overseas Cash

13. Sony’s Key Ratios
EPS
0.45
Debt to
Equity
5.46
Debt to
Asset
0.06
Current
Ratio
0.85
EPS
45.94
Debt to
Equity
0.49
Debt to
Asset
0.00
Current
Ratio
1.49
Apple Can Afford Sony
Apple’s Key Ratios

14. Challenges of Acquiring Sony
• Cultural Integration of Sony’s Centralized
Structure
• Overseas Acquisition

15. Apple vs. Sony:
Different Corporate Cultures
Decentralized
Centralized

16. Conclusion
• Take advantage of Sony’s Movie and Music presence
• Experience in the Gaming and Television Market
• Benefit Apple’s long term strategy:
– To become the innovative technology giant