APPLE'S JAPANESE ALLY Its new notebook computer -- made by Sony -- shows why alliances are hot in the PC business.
By Brenton R. Schlender REPORTER ASSOCIATE Alicia Hills Moore

(FORTUNE Magazine) – ONCE FAMOUS in the industry for going it alone, Apple Computer has turned downright chummy. Last summer the iconoclastic computer maker announced plans to team up with IBM, its former nemesis, to concoct what both companies hope will be the next generation of PCs. That collaboration won't produce any hardware till the mid-1990s, but another less dramatic Apple alliance is already bearing fruit. Less than two years ago Apple enlisted Sony Corp., the Japanese consumer electronics giant, to design a new notebook-size Macintosh computer called the PowerBook 100. The five-pound, $2,300 machine, which has two megabytes of memory and a 20-megabyte hard disk, is the cheapest of three new notebook computers Apple introduced in October. Apple gave Sony the basic blueprint, including a list of chips and other components. Sony's engineers, who had little experience building personal computers, took it from there and nurtured Apple's smallest and lightest machine from drawing board to factory floor in under 13 months. Unlike the IBM-Apple joint venture, the Sony-Apple alliance isn't likely to change the computer industry landscape. No big technological leap was involved, only the production of a single model of an existing Macintosh computer. But the Sony linkup was a first for Apple, a cautious dry run for other, more ambitious joint projects -- including the one with IBM -- and it provides a glimpse of how other similar products of mixed parentage will be born. The Cupertino, California, company, which has $6 billion in annual sales, wants to broaden beyond its niche in the personal computer industry. The joint venture with IBM will help Apple compete for big corporate business. Alliances with Sony and perhaps other Japanese companies could speed Apple's entry into new markets for cheap portable devices that blend computers and consumer electronics. Examples: electronic books that display text and images stored on disks, and personal communicators that combine the features of cellular phones, electronic organizers, and fax machines. Says Apple CEO John Sculley: ''This is the decade in which Apple moves from being a wild card in the industry to playing in the mainstream. We learned in the 1980s that we can't do it alone.'' Sculley says Apple chose Sony to be its first major partner because the companies already have much in common. Sony makes many of the floppy disk drives, monitors, and power supplies that Apple uses in its other Macs. The two companies also have cultural similarities, despite differing nationalities. Says Sculley: ''The common ground is an insatiable excitement over building great products that define new markets. We love Sony's products, and they love Apple's products.'' Apple approached Sony in late 1989 because it didn't have enough engineers to handle a flood of new products it planned to deliver in 1991. (Early this fall, besides the three PowerBook machines, Apple introduced three deskbound models, a scanner, a fancy monitor, and two laser printers.) By May 1990, Apple had a clearer idea about which models its own engineers would develop ) and where Sony's expertise in miniaturization would pay off best. So it handed Sony a half-page document outlining the dimensions and specifications for the PowerBook 100, a device that would cram the guts of a 16-pound, $4,500 Mac into a much smaller package. To take on the project, Sony canceled others of its own to free up seven of its best engineers. It hoped to start building the machines by mid-August 1991. What was in it for Sony? Among other things, it wanted to learn more about the PC business, one of the few high-tech consumer markets it hadn't seriously ventured into. The project also fit into Sony's plans to make more products for other electronics companies to sell under their own labels. (It now manufactures camcorders for Nikon and Kyocera, for example.) FROM THE BEGINNING, the idea had the imprimatur of Sony's president, Norio Ohga, who assigned it top priority and kept his eye on it personally. He gave project manager Kihey Yamamoto a free hand to hire engineers from any Sony division. A few had doubts early on. Says Yoshihisa ''Bob'' Ishida, the engineering team leader in Tokyo: ''I had worked with Apple for six years, mainly providing special monitors for earlier Macintosh models. Based on that experience, I didn't believe we could make it to the factory in a year or so.'' In the end, the PowerBook 100 was only two weeks late. It was a tough sell in some Apple quarters too. John Doherty, a 12-year Apple veteran who ultimately led the PowerBook 100 project, turned the job down when first approached. Says he: ''I wasn't convinced that Apple was solidly behind the idea, no matter what management said.'' Because Apple had never before trusted another company to make one of its computers, he doubted that mid-level managers and engineers would work enthusiastically with outsiders. Doherty relented, however, when Sony signed on to the project, code-named Asahi (after a Japanese beer). Pulling off Asahi was no small beer. Early on, representatives of both companies flew regularly across the Pacific to compare notes and gauge progress. Corporate travel restraints during the Persian Gulf war threatened to wreck the ambitious schedule, so the teams improvised teleconference meetings. They worked so well and saved so much money that Apple and Sony will probably use them in future development efforts. So what's next for Apple and Sony? Sony engineers are busy planning future members of the PowerBook family. Sony has invested in General Magic, an Apple- ) backed startup that aims to make some of those hybrid computer-consumer electronics products. What about rumors that Apple and Sony together plan to take on the videogame dynasty of Nintendo with a machine of their own? ''That would be speculating,'' says Sculley, looking very much like a man repressing the urge to wink.