How Sun Bought Apple Computer (Almost)

Hugh Pickens writes "There was a time in the 1990s when Sun, at its wealthiest, was poised to buy Apple when it was at the lowest point in its storied history and now eWeek reports on how the deal for Sun to buy Apple fell through. 'Back in late 1995 early '96, when we were at our peak, we were literally hours away from buying Apple for about $5 to $6 a share,' says former Sun CEO Ed Zander. 'I don't know what we were going to do with it, but we were going to buy it.' Sun co-founder Scott McNealy adds that there was an investment banker on the Apple side who basically blocked it. 'He put so many terms into the deal that we couldn't afford to go do it.' Would there be iPhones, iPads and iPods on the market today if Sun Microsystems had been able to close a deal to buy out Apple in the mid-1990s? No, says McNealy. 'If we had bought Apple, there wouldn't have been iPods or iPads ... I'd have screwed that up.'"

Comments

He'd have screwed it up.

[Chas]

Well at least he's being honest about it.

Re:He'd have screwed it up.

[Megane]

Actually, anyone who was Not Steve would have screwed it up. What Woz had in technical savvy, Jobs had in product savvy. Apple would have been long gone if NeXT hadn't bought them for negative 400 million dollars.

Re:He'd have screwed it up.

[Penguinisto]

Judging by what actually happened, the answer would be "yes", but the outcome would have differed, and taken far longer to realize overall. After all, there have been tablets for 10 years now, and portable mp3 players out long before the iPod.

I think that, while many like to deride Apple for many reasons, there is one thing that, at least IMHO, commands respect: Apple has a knack for producing products that folks like to use, in forms that make it drop-easy to do so... and in turn they do revolutionize the industry in question, forcing competitors to adopt, adapt, or perish.

Take the iPad... Microsoft and OEMs have had tablets out since 2001-2002 or so. OTOH, those products, well... sucked. They were expensive for what they did, the functionality was crap, the battery drained almost as fast as the laptops did, and the UI was ill-fitted for the job. Then the iPad comes along - a bit limited in flexibility, but almost perfect for the form-factor and what folks expected of it. Battery life is insanely long. The UI is almost perfect for fingers (stylus? who needs that?) And everything about it just seems to 'click' with the non-techie public.

Almost immediately, and like *every other Apple product*, competitors (including Microsoft) begin aping the thing... and in a repeatable progression: First we see a ton of vaporware and 'concept' demos, then massive promises (most of which fall short), then out comes the blatant (and undeniably crap) imitators, and finally, a long time later, some competitors begin trickling in with a few halfway decent competitors... af first falling well short of the mark, in spite of being somewhat decent products in their own right. Eventually the competition becomes almost as capable, perhaps surpassing the Apple product - but by then Apple has the market pretty much sewn up - if not in marketshare, then in profit share. The iPod was like this. Even the iPhone is like this.

I think OTOH that Sun would have dickered around, then come out with a few enterprise-oriented versions, then let them each die, while more consumer-oriented competitors would have picked up the torch and limped along.

I do have to give props to Apple for one thing - without them, most consumer-oriented tech would have likely progressed a whole lot slower than it has. I also think that a lot of corollary bits (e.g. digital music licensing, apps, mobile smartphones, etc) would have been slowed down, if not stalled completely. I say this because Microsoft would have just sat around for the most part, and Linux would have had a much harder time getting anywhere (esp. w/o Google jump-starting things). I mean, sure, there are things that have moved along and disrupted tech nicely w/o Apple, but when you examine them (netbooks for instance), they're not much more than incremental iterations of existing products... not complete disruptors.

Re:He'd have screwed it up.

[monoqlith]

It's more like the epicenter for pedantry.

and nothing of value...

[Mr. Slippery]

No, says McNealy. 'If we had bought Apple, there wouldn't have been iPods or iPads ... I'd have screwed that up.'"

And nothing of value would have been lost. Perhaps, even, actual useful computing devices would have been developed, instead of shiny geegaws. Perhaps the Apple of Woz would have won out over the Apple of Jobs.

Re:and nothing of value...

[XxtraLarGe]

How about the days when people did not have to worry about breaking the law just to the software they wanted to run on the computers they legally purchased?

I think you a word.

Total Perspective Vortex

[Matey-O]

I love the trolls' complete and total lack of objectivity. Hundreds of millions of iDevices sold, arguably the first economically successful tablet, a company that could turn on a dime and recreate their hardware jumping from PPC to Intel, and OS 9 to OS X in a seamless fashion, and gain enough financial success to ecplipse Microsoft...and yet 'nothing of value is lost'.

Here's a hint for the younguns: There's room for more than one successful company in the world, and one being successful doesn't mean no others will be. If you don't like 'em, don't buy 'em...but to ignore their success is foolhardy. It's what makes people like Nokia lose their position in the economy.

Re:McNeally would not have screwed up everything

[Penguinisto]

Apple expertise combined with Sun's might have resulted in a new, easier-to-use class of workstations.

...which would have done bupkis for the consumer side, and would have cost a mint.

I think that was the whole genius of how Apple did it - they have an almost slavish devotion to how the consumer uses their products, and pretty much gave up on the business/enterprise side of things, outside of a few feints and probes here and there (e.g. XServe). They found a whole side of computing and electronics that most OEMs only half-assed paid attention to, and leveraged it to rather enormous success.

Re:"there wouldn't have been iPods or iPads"

[Penguinisto]

It would have been there, but it would have been a whole lot slower. Way slower, IMHO.

Imagine something like the iPod coming out just this year, instead of 10 years ago. Imagine the RIAA going even more apeshit (yeah, I know) and keeping the music biz locked down to where digital music was either illegal, or locked down under so much DRM that it would have been nearly impossible to use. Imagine smartphones still being over-priced and slow piles of crap, with the useful models being hella expensive, and apps being distributed (if at all) under carrier lockdown. Imagine still having to use tablets with a stylus, crap specs, crappier battery life, and all of them still running Windows.

I know full well that others would have filled the void, certainly. Problem is, they would have been very slow about it, and innovation would come in fits and starts, with Microsoft running the show (that, or doing its best to ruin the show if it couldn't get a piece of the action - see also netbooks when those all first came out running Linux - notice how all the sudden Microsoft got all wonky with the licensing all the sudden, sometimes threatening vendors outright?).

Re:"there wouldn't have been iPods or iPads"

[betterunixthanunix]

Imagine portable digital music players coming out this year? As opposed to when the first MP3 player came out?

http://www.google.com/patents?vid=4667088

Or maybe you meant something more like this:

http://www.techpin.com/the-first-mp3-player/

Oh yeah, we really needed Apple to get portable music.

Let's get real here. Apple's strength is not in creating new technologies, but in making new technologies look pretty and in marketing those technologies. If Apple had not stepped in with the iPod, we would probably have seen a market with a lot of competing companies, making uglier products.

Innovation is a continuous process, with or without Apple. Where is Apple's research division? How does it compare with universities, or MSR, or IBM research? I do not remember Apple building a computer system that could play Jeopardy (yes, that technology will be relevant to consumers in the future, whether or not Apple decides to exploit it).

The combined company

[christurkel]

could have been called Snapple.

Eh, not really

[DesScorp]

""NeXT wasn't a "popular" computing company, it built high-end workstations and an object-oriented OS for the scientific and government markets, actually a lot like Sun. NeXT actually did pretty well at this"

Did pretty well? Not exactly. People loved the OS. The hardware, with that expensive-yet-trouble-prone combo optical drive... eh, not so much. Even if the hardware was beloved, there simply wasn't enough of a market in terms of total sales to support what NeXT was spending. They burned through cash at a mind-boggling rate. Jobs spent much of his fortune from Apple on NeXT, and didn't have much to show for it near the end. Eventually the company downsized radically, becoming essentially a small software tools shop, selling off their expensive-yet-stylish factory facilities. There have been entire chapters written about how Jobs was at his most obsessive over things like how the furniture looked at the factory during the period. NeXT, where Jobs was totally in charge of a company for the first time, was essentially a learning experience in how NOT to run a company for him. Considering what was invested and lost in it, NeXT was considered to mostly be a failure. This is why there was such a loud "WTF?" when the public found out just how much Apple paid for NeXT. Buying NeXT? Sure. Buying NeXT for $400 million? At the time it looked insane. People generally thought "Wow, Jobs sure conned them, didn't he?".You're right in that NeXT had an "exit strategy"; having Jobs talk (sucker?) a bigger company into buying them

I use OS X and love it, so you can argue that buying NeXT was great because it gave Apple a foundation for a post-Classic operating system, but let's be honest here. Apple wasn't buying NeXT or an operating system or software tools. In retrospect, Apple was buying Steve Jobs. And it was the best investment they ever made.