Would Apple Buy Sony? (AAPL)(SNE)

Not may years ago, when the iPod was in its infancy, Sony might have looked at buying Apple to own the new multimedia platform. Sony already had a PC business and the Mac operations could have fit right in.

Now, the tables are turned a bit. And, while a couple of years ago, a deal of the magnitude of Apple buying Sony (which has a market cap of $40) would have been viewed as ridiculous. That was then. Today, the news is filled with deals like Kohlberg Kravis buying entertainment and telecom giant Vivendi for $50 billion.

Sony is obviously in tough shape. But, that is why it is only worth $40 billion.Steve Jobs is clearly interested in content companies. His shares and board seat at Disney signal that. He has a PC business and a multimedia device business. Sony has a PC business, a game platform business, part of a global cellphone operation (Sony Ericsson), a movie studio, and its massive television and DVD player operations. Perhaps Jobs would not want to keep it all, but most of the pieces would expand Apple’s content relationships, device and download operations, and would open the door for Apple to market Macs and traditional PCs.

Sony has revenue of about $66 billion, about the same as it was in 2001. Operating income, which ran between $2 billion and $4 billion from 1997 to 2001, now sits at about $1 billion. Sony has about $10 billion in cash and short-term investments and $6.5 billion in long-term debt.

A lot of investors think Sony is dead meat. It traded for north of $150 in 2000, and now sits at $40 on a good day. Dead meat like Apple was dead meat before Jobs turned things around. In mid-2000, Apple’s stock was below $8. Now it trades at $84. And, Apple has a market cap of $72 billion.

And, don’t forget, Apple has Steve Jobs.

Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.