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Sun sets on Apple deal for now

Sun Microsystems and Apple Computer are still haggling over price, according to several industry analysts. And now other suitors are in the game.

The deal between Sun Microsystems and Apple Computer is stalled indefinitely as officials continue to haggle over price.

Now that talks appear to have broken down, other companies are circling the ailing Apple, including Motorola and Sony.

If and when the deal finally goes through depends on how desperate Apple becomes, said Rob Enderle, an analyst with Giga Information Group in San Jose, California.

"Desperation could drive them into accepting a deal they wouldn't accept otherwise. Right now they are fighting hard over price. As always, the perception of the value of the seller seems to be out of line with the buyer," said Enderle.

But there are other hurdles to the deal besides price. "Both companies have gone to RISC, but they're different implementations," Enderle said.

If the deal does go through, it's likely to be a failure, said Andrew Allison, a veteran Unix analyst based in Carmel, California. " I think the deal will join the long list of mergers that fail. The difficulties will be the egos of the people involved. It's hard to believe that Sun would be able to resist messing with the Mac and the Mac OS. Messing with either one would be a dangerous thing," Allison said. "Apple is clearly in a fragile condition today. It would be easy to tip it over the edge," he added.

Despite that fragility, Giga's Enderle said, "The bottom line is that Apple needs a deal, and they need it badly. They would have ended up with more money if they sold to IBM. If they completely bypass the Sun deal, they might take a lower price in a few months or downsize the company even more," he noted.