MACWEEK INSIDER JAMES STATEN

Here comes the Sun

Every time Apple has a bad quarter, takeover rumors percolate to the surface. The usual suspects are AT&T Corp., IBM Corp., Oracle Corp. and Motorola Inc. Last year Hewlett-Packard Co. and Sony Corp. joined the list.

IBM and AT&T have enough troubles. Motorola doesn't want to own its best chip customer. And HP and Sony, who are already in the Intel-standard clone business, just don't make sense.

The only type of company likely to buy Apple is one that is thirsty for Apple and has an idea of how to integrate Apple's technologies into its current product lines.

Now I don't profess to have any inside information and don't want anyone reading this column to turn it into rumor, but one company that might make a good fit is Sun Microsystems Inc.

Sun owns more than 30 percent of the worldwide workstation market but barely has a presence in the mainstream business and consumer channels. It sells hardware that ranges in price from $5,000 to $150,000, including laptops, but has hardly made a dent in these markets beyond offering high-performance servers.

Its operating systems, SunOS and Solaris, are everything the Mac OS hopes to be when it grows up; unfortunately both lack the Mac's friendly interface. And because Sun's systems are Unix-based, the perception is that Solaris and SunOS are counterintuitive, requiring on-staff programmers to configure even minor aspects of the environment.

Grafting the Mac interface onto Solaris would create a high-powered OS that is much easier to use and gives Mac users access to a truly threaded, multitasking, multiprocessing OS with protected memory spaces. The best part is such a face lift already exists: Macintosh Application Environment for Solaris is said to be doing very well for Apple and Sun.

While a complete merger between System 7.5 and Solaris would be far off, a two-tiered attack similar to the one Microsoft Corp. has with Windows 95 for the low-end and Windows NT for the guru would be a natural one.

Plus, like everyone else who refuses to pay homage to the Digital Zeus atop Mount Redmond, Sun can see the distant sails of the Windows fleet as it begins to encroach on Sun's territory.

Nabbing Apple would give Sun a complete product line covering the first-time buyer on up to the high-level scientist. A united front of Sun and Apple would provide users with a best-of-both-worlds solution that runs on Intel, PowerPC and SPARC-based (at least in the short term) machines from a variety of hardware vendors and offers a unified solution and migration path for users.

Even Sun and Apple's market strengths are complementary. Apple has a sizable share in the education market; Sun has a strong presence in the higher-education, engineering and scientific fields. Apple is a force in the publishing and multimedia markets, while Sun provides high-end publishing, video and 3-D modeling solutions. Both companies offer strong Internet platforms.

Sun would also pick up a customer base of 22 million Mac users -- a big jump from the 2 million in its Rolodex today.

Gaining Apple's pioneering technologies such as QuickTime and QuickDraw 3D would help Sun in its fight with Unix competitor Silicon Graphics Inc. Plus, the company would be happy to pick up the multimedia, television and film production customers Apple has.

Sun's financial resume as a suitor is stellar. It has more than $1 billion in the bank and virtually no debt. Its products carry a high margin, like Apple's used to, and Sun has had more time in the saddle with its licensing strategy and might be more willing to pass the low-end hardware business to clone vendors.

One snag makes this merger little more than wishful thinking. Sun lacks a positive track record selling to the mainstream market. Then again, Apple hasn't figured this one out either.

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James Staten is associate editor/on-line. He can be reached at james_staten@macweek.com.
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