- Apple's deal with IBM shows that a change in outlook on the technology industry has occurred in Apple; likely as a product of Mr. Cook being the boss.
- Ultimately, Mr. Cook's method of open-minded thinking and embracing synergies without insecurity could be a Harvard Business School case study on embracing positive change.
- All parties involved here - Apple, IBM, and BlackBerry - are likely to benefit from this partnership. I'm bullish on all three names.
My last piece on Apple (NASDAQ:AAPL) basically told investors to breathe deeply and embrace Tim Cook - it suggested that now, after several years at the helm, he's just being unofficially sworn in as Apple's leader as the headlines about Mr. Jobs have dissipated. It suggested that Mr. Cook's open-mindedness and perspective on the technology sector was easily going to glide Apple to $120. I wrote it, I took a deep breath, and I added to my Apple position. Just days later, I'm getting demonstrable validation as to my suspicions about Mr. Cook and his brilliant way of thinking.
Last night's agreement between Apple and IBM (NYSE:IBM) to work together in order to develop a business/enterprise suite of apps goes to show us what I already had guessed: Apple now has perspective that it would have never embraced in the late 80s and early 90s.
Between that point and now, of course - Apple has grown to become the world's largest company (or 2nd-largest). It's an entirely different entity from the days where Bill Gates had to take a 7% stake in the company to keep it alive. As such, the business model must adapt a little bit - the company is much larger, and 25 years have gone by. You can't have a 1990 outlook on the technology market and expect to be successful running Apple in 2014.
This is one of the beautiful things about the transition from Mr. Jobs to Mr. Cook. No doubt, Mr. Jobs was a visionary - and he was exactly what Apple needed for the time that he was with the company - during both his first and his second stints at Apple. But now, Mr. Cook is the steady hand that Apple needs at the helm. It's more now about protecting what you've already earned and less about taking on the world, as it was in the 90s. Apple has already taken on the world - and it's won. Now, it needs a CEO who can reign with a calculated, steady, peaceful hand. With that, shareholders will no doubt be massive winners in Apple for many years to come.
Which leads us to the beautiful decision-making by Mr. Cook to extend a hand in IBM's direction in an attempt to solve one of the few problems that Apple has had since iPhone's inception: it wasn't considered good enough for super-secure business uses. It's the reason, again, why you see tons of people wandering around every major city in the U.S. with their personal iPhone in their pocket - right next to their work BlackBerry (NASDAQ:BBRY). And I don't think BlackBerry will ever be officially dethroned for this purpose, to be honest. Android and Apple can put as much of a polish onto their phones as they'd like - but BlackBerry is operating on a different level. Hence why I suggested this morning that Apple's deal makes BlackBerry an obvious buyout candidate.
What I do think it can do, however, is make Apple extremely competitive in this market and allow it access to IBM-centric companies that would have never considered Apple to begin with. Somewhere out there, there's a massive constituency of anti-Apple IT managers who are taking a look at their IBM servers this morning and cringing. Their pain, however, is going to be Apple's gain. And again, this isn't really about BlackBerry as much as the headlines are suggesting. It's about the beautiful company that Apple is becoming under the steady hand of Mr. Cook.
Similar to the way that Steve Ballmer would have never gone out and ported Office for the iPad, Steve Jobs would have not likely gone to IBM for help. If you look back to this history of Apple, one of the biggest blunders made in the early years - the late 80s and early 90s - was Steve Jobs thinking IBM was the enemy, when Microsoft (NASDAQ:MSFT) was the real enemy. Jobs had it out for IBM - it, to him, represented structure, anti-creativity, and everything that was wrong with the business world. He was going to create a machine for geniuses and everyday people, "the rest of us". IBM was making PCs for the boring, milquetoast, wonky white businessman.
But this isn't Silicon Valley in the late 80s anymore.
What we see from both Apple and Microsoft are new open-minded CEOs that aren't afraid - they realize they're extremely strong companies, and realize that the synergies of these major partnerships far outweigh the disadvantages.
There are entire classes dedicated to the art of dropping insecurities so that you can see the advantages and synergies of partnering with a company that, on the surface, looks to be your enemy. There are entire graduate school case studies that revolve around an open-minded approach to these situations, instead of the "old school" approach, where those competing against you were simply "bad" and needed to be beaten by any means.
Of course, I have two ways of looking at things.
1. As a BlackBerry shareholder
2. As an Apple shareholder
When I forget about BlackBerry and think about this deal strictly from the Apple side, I can't say it's anything short of exactly what I was expecting from Mr. Cook. What he has shown us over the last few months is that he's not afraid to go out and create synergies with other companies.
Apple and Microsoft have really both done so much to this point using and applying the "old school" business model. Part of me knows that this is what Nadella's new memo was about (aside from also couching people for layoffs). That's what caused me to write "Will Satya Nadella Be Microsoft's Steve Jobs?" Both Apple and Microsoft seem to be changing gears from the "old school" way of doing business, to a more refined, sophisticated and open-minded "2014" way of doing business.
As I've said about both Apple and Microsoft in recent weeks, this move further validates that a sea change has taken place at the helm of two of the world's biggest technology companies. It's going to be a great couple of coming years for these technologies, and I'm expecting all parties involved - AAPL, IBM, and BBRY - to benefit from Mr. Cook's fantastic vision and solid decision-making.
I'm long Apple and BlackBerry - and bullish on this deal as a whole.
Nice thinking, Mr. Cook.
Disclosure: The author is long AAPL, BBRY. The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article.