Apple buries the hatchet with IBM, teams up to target corporate market

Apple introduced the Macintosh computer in 1984 with a Super Bowl ad that portrayed its rival International Business Machines as “Big Brother.” In the ad, a talking head on a giant computer screen spouts platitudes about “information purification” to an audience of corporate zombies — until a woman dressed like a Hooters waitress destroys it with a sledgehammer.

The tagline: “On January 24th, Apple Computer will introduce Macintosh. And you’ll see why 1984 won’t be like ’1984.’”

But now, IBM will be a partner in Apple’s first major foray into corporate sales. The former rivals are teaming up to tackle what they see as the next wave in workplace computing: mobile devices.

It’s a sensible match. Apple dominates the tablet market while IBM has a solid reputation with businesses for its software and services.

“If you were building a puzzle, they would fit nicely together with no overlap,” Apple chief executive Tim Cook, who worked for IBM for more than a decade, told Re/Code. Cook talked to reporters with IBM’s chief executive Virginia M. Rometty to discuss the new partnership on Tuesday.

TOP: FILE - In this file photo taken Jan. 13, 2011, the IBM logo is displayed. IBM Corp., reports quarterly financial results Monday, July 18, 2011, after the market close. (AP Photo/Seth Wenig, file) BOTTOM: FILE - In this Tuesday, Oct. 4, 2011 file photo and Apple logo is seen during an announcement at Apple headquarters in Cupertino, Calif.. The European Union's antitrust watchdog announced Tuesday Dec. 6, 2011, is probing whether Apple and five major publishing houses have colluded to restrict competition in the market for e-books. (AP Photo/Paul Sakuma, file)
IBM & Apple. (Photos by AP)

The companies announced they will work together to develop more than 100 mobile applications tailored to work with IBM’s data analytics and cloud services. The applications will be available this fall.

What will these programs do? Few specifics were given.

The New York Times reported the companies described an airline pilot using a mobile device to calculate updated fuel use and flight paths as weather conditions change — or an insurance agent doing risk assessments for a potential client. “Rometty said the companies planned to combine data analysis, cloud and mobile technology with Apple’s smartphones and tablets, turning the devices into decision-making tools rather than ones used mainly for email, text-messaging and contacts,” the Times reported.

IBM will sell these new business-savvy iPhones and iPads to its corporate customers — and offer on-site support for Apple products.

“Apple and IBM are putting a full-court press on the mobile business market,” PC World noted. “Apple won’t run off and do a similar deal next week with Hewlett-Packard. More significantly, IBM, at least for now, is throwing all its chips in with Apple — apparently at the expense of Google’s Android OS and Microsoft’s Windows Phone.”

Popular with consumers, Apple hasn’t made much of an effort to sell to businesses before now.

“Apple hasn’t come out and said, ‘We don’t give a [damn] about enterprises,’ but that’s basically how they felt,” analyst Roger Kay of Endpoint Technologies told PC World. “It’s now partnering with a company that bends over backwards to understand the needs of its corporate clients.”

The deal lets each company do what its good at.

“We’re good at building a simple experience and in building devices,” Cook said. “The kind of deep industry expertise you would need to really transform the enterprise isn’t in our DNA. But it is in IBM’s.”

What’s in it for IBM?

“IBM meanwhile, is hoping Apple’s simplicity and popularity will help stem eight consecutive quarters of year-over-year revenue declines, as it moves more of its business software onto the mobile devices used by employees,” the Wall Street Journal said.

The partnership is premised on the notion that mobile is the future for most workplaces. That future might seem distant to those working in offices where computers run on software several versions old and desktops far outnumber laptops.

The partnership could be bad news for Microsoft and others.

“The users that Apple and IBM will be going after with this deal are exactly in the crosshairs that Microsoft has been going after in the last few years with Windows Phone,” industry analyst Charles King of Pund-IT told PC World. But he was skeptical that Microsoft’s current customers would jump ship. “Having official IBM support for those 100 [apps] will be attractive to some core IBM constituencies, but it’s hard to say how many will jump to replace what they have now,” he said.

Even though Google’s Android operating system is used on more mobile devices, IBM’s endorsement will give Apple an edge.

“It makes it much harder to get serious consideration for Android in corporations,” Tim Bajarin, president of Creative Strategies, a technology research firm, told the Times.

Gail Sullivan covers business for the Morning Mix blog.
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