Feb. 8 (Bloomberg) -- Oh, to be a fly on the wall at Sony Corp.'s Tokyo headquarters these days.

After 2 1/2 years with Howard Stringer as the firm's first foreign boss, Sony is now worth about a third of its market value at the start of the decade. Granted, he deserves more time. Turning around a behemoth is no small feat and the second- biggest consumer-electronics maker had certainly lost its way.

Still, expectations were high. Investors hoped the outsider -- in Stringer's case a Welsh-born U.S. citizen -- would shake up a staid corporate culture the same way Carlos Ghosn -- a Brazilian-born Frenchman of Lebanese descent -- did at Nissan Motor Co.

While Stringer has had some success, he hasn't cut costs as hoped, and growth in flat-screen televisions is more about industry developments than progress at Sony. The PlayStation alone won't change much and its movie business is all about Spider-Man. Another sequel, anyone? No, thanks.

Adding insult to injury, Apple Inc. continues to hold the spotlight. It really is one of the great business stories of the past 50 years. Sony, the inventor of the Walkman, ceded its leadership in portable music players to Apple's iPod and continues to lose ground.

It really makes you wonder why Apple Chief Executive Officer Steve Jobs doesn't just buy Sony.

Blasphemy

Such rumors have circulated before, knocking joysticks out of the hands of regulars of Tokyo's Akihabara electronics district. It's techie blasphemy to suggest such a thing. It's almost unthinkable that a name that rose from the ashes of World War II to become a cornerstone of Japan Inc. would be sold to a Silicon Valley guy who doesn't wear a tie.

Yet let's ponder, just for a moment, what could come from joining Apple and Sony.

The technology world is currently chewing over Microsoft Corp.'s bid for Yahoo! Inc. and attempts by Google Inc. to quash it. Part of the intrigue is that Silicon Valley tends to favor growth through bottom-up innovation, not giant acquisitions.

Apple's owning Sony makes sense on many levels, though. Imagine the merger of two companies that boast many of the world's top design experts. Imagine how our living rooms might look, how we might communicate, how we might work, and how we might view what's possible in 10 years if Sony, which is strong on hardware, and Apple, which excels in software, got together.

`Cool Factor'

Few words roll eyes like ``synergies,'' and yet Apple and Sony would enjoy a bull market in them. Sony needs to restore the ``cool factor'' it once had and Apple now owns. Apple needs Sony's content -- movies, music -- to sell to its iPod and Apple TV enthusiasts. Why negotiate deals with record labels and film studios when you can own them?

Apple probably wouldn't mind controlling the Blu-Ray technology that analysts say offers lucrative revenue streams. Sony would give Apple the game franchise it lacks. Its camera line-up also could serve Apple well -- an iCamera, anyone? Or an iPhone equipped with one of Sony's high-definition camcorders? And don't forget Sony's impressive stable of patents.

Japan also is a market that Apple has yet to dominate. It's not just Japan's flagging economy. It's also about the large number of domestic rivals with a high level of name recognition in a fiercely competitive market.

You won't find a more mobile-phone-obsessed population anywhere than Japan. Adding some Sony designs to the iPhone alone could mean huge profits. And Apple might find Sony's distribution channels helpful in boosting its Asian business.

Microsoft-esque

Sony is having trouble getting its groove back. Even after falling amid subprime-loan turmoil in markets, Apple's market value is $107 billion to Sony's $44 billion. Operating margins really tell the story. Sony's was 0.86 percent at the end of March 2007 versus 2.48 percent in 2003. Apple's was 18.37 percent at the end of September versus 0.40 percent in 2003.

One could argue Sony is looking a bit Microsoft-esque. Microsoft was slow to realize the extent to which the Googles of the world made it seem more Old Economy than New Economy. It has taken Sony some time to understand Apple's threat.

Of course, Jobs may have little interest in owning a company with so many fleas. Sony's bureaucracy, scale and ingrained corporate culture could be a huge distraction for Apple, which has been successful offering a small number of products it makes very, very well. Also, Apple already is looking beyond today to tomorrow. Sony is more about today.

Some Sony product lines could be sold to help Apple pay for its acquisition. Yet how much debt would Apple be willing to take on to finance it? And given Sony's baggage, an argument can be made that Nintendo Co. would be a better fit for Apple.

Sony has an illustrious history of innovation and coming back from the brink. Counting Sony out could be a dangerous bet for competitors and investors alike. That doesn't mean Jobs shouldn't be thinking bigger. As bold acquisitions go, Sony may be Apple's one and only.

(William Pesek is a Bloomberg News columnist. The opinions expressed are his own.)

To contact the writer of this column: William Pesek in Tokyo at wpesek@bloomberg.net

Last Updated: February 7, 2008 17:43 EST