Apple/IBM deal wins praise; hardware impact debated

The Apple (AAPL +1.2%)/IBM (IBM +2.4%) deal is a "landmark agreement," that gives Apple "enterprise capabilities and credibility at one stroke," says Forrester's Frank Gillett. He notes that while the BYOD trend has bolstered Apple's enterprise presence, the company has until now "resisted servicing enterprises" out of fear of hurting its user experience.

Endpoint Technologies' Roger Kay: "What [the deal] allows Apple to do is not change its philosophy and lay off to IBM the whole issue of, how do you make iPhones work for IT managers who actually want to be treated like a valued customer."

Tim Cook: "We’re good at building a simple experience and in building devices ... 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." He also highlights the value of IBM's 100K+ consultants/sales workers.

RBC and Canaccord both think iPhone sales could get a boost; the former is also upbeat about the premium AppleCare service that will be developed. Baird thinks the deal "could help AAPL cement iOS as the preferred platform for enterprise."

Piper's Gene Munster, however, doesn't see a huge hardware impact. "We note that if half of the Fortune 500 were to each purchase an incremental 2,000 iPhones and 1,000 iPads above what they were planning to purchase ... it would mean about a half a percent to CY15 revenue." He also expects IBM to eventually offer similar Android solutions.

The deal strengthens IBM's MobileFirst initiative, through which Big Blue is already offering a variety of enterprise mobile apps/services. An IBM exec: "We wanted to focus on creating an absolutely irresistible workflow and processes and a design of apps that can be used by every user."

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Comments (17)
  • Andrew A
    , contributor
    Comments (329) | Send Message
    The Apple generation is finally of age and demanding results... nice work on finding solutions!
    16 Jul 2014, 12:33 PM Reply Like
  • yaldezian
    , contributor
    Comments (36) | Send Message
    This is a win-win for both companies.
    16 Jul 2014, 12:58 PM Reply Like
  • jjkiam
    , contributor
    Comments (403) | Send Message
    I completely disagree with Gene Munster's POV!
    How can he possibly believe that Apple would enter into this unprecedented partnership with IBM if there were no competitive restrictions on both companies.
    Does he really believe that Apple would allow IBM reps to sell and service their competitors products alongside Apple's? No way!!!
    What isn't mentioned about this partnership is how it will also inevitably increase the Enterprise adoption of Apple's desktop and laptop pc's. The seamless integration between IPhones, IPads and Apple PC will prove to be a massive competitive advantage. BBRY can't offer this advantage nor Google and not even MSFT either. When you are working on something at your desk and can immediately and effortlessly switch to working on the same item on your phone or tablet will prove irresistible to business
    16 Jul 2014, 01:17 PM Reply Like
  • Cliff Hilton
    , contributor
    Comments (2813) | Send Message


    'When you are working on something at your desk and can immediately and effortlessly switch to working on the same item on your phone or tablet will prove irresistible to business.'


    Microsoft already does this. Blackberry will be doing this for all devices by years end. It's a very competitive market.


    Blackberry is going after IBM Cloud.


    With the Blackberry Passport, you don't need iPhone 6 and iPad. One solution, one device. Blackberry!


    And don't forget, Blackberry is in this condition because they didn't watch out for BOYD, just like IBM/Apple are doing. IBM/Apple have learned nothing from the fall of Blackberry. Most devices out there are Android, not Apple. If IBM is going to create solutions, they should start by not creating problems. Apple wants it all, just like Blackberry did; they failed.


    By the end of the year, BES12 will be in an additional 15,000 companies; supporting iPhones, Androids, Windows, and other. And the upgrade is "free". I don't think IBM/Apple are giving anything away. If anything, IBM/Apple will cost three times as much to do less.


    Don't that just get under your skin?
    16 Jul 2014, 03:32 PM Reply Like
  • jjkiam
    , contributor
    Comments (403) | Send Message
    Wow your response proves that we all should be very careful about our personal confirmation bias, ESP when making investment decisions! I try to look very carefully and remove my passions from this effort. Anyone who believes that BBRY is going after IBM in the cloud space should ask themselves how? What data center investments have they made in the last couple of years?
    Next no hardware competitor offers the seamless integration that Apple has achieved. The immediate transfer of work from desktop to tablet to smartphone does not exist at other companies like it does on the new IOS 8
    17 Jul 2014, 09:28 AM Reply Like
  • Budavar
    , contributor
    Comments (1410) | Send Message
    Have been following IBM since I first met Tom Watson in the 1950's +
    AAPL before Jobs came aboard,
    so its a joyous occasion for me personally.


    Now is it true = this all about BRAINS?
    Like IBM's logo = THINK?


    We all have a HEART from whence comes love + love to serve others.
    Tim Cook already made some tentative steps in thet direction =
    by getting a fashion guru on board,
    plus those music men + that female retail genius.


    Do our hearts also crave for great art + melodic music =
    most folks can't imagine life without those.
    With a big heart AAPL becomes complete, holistic =
    all can admire, but then also love!
    16 Jul 2014, 01:18 PM Reply Like
  • Dennis Baker
    , contributor
    Comments (2130) | Send Message
    "Have been following ... AAPL before Jobs came aboard"


    This would have been difficult seeing as he was one of the founders of the company.
    16 Jul 2014, 01:54 PM Reply Like
  • User7766461
    , contributor
    Comments (158) | Send Message
    those "="'s make absolutely no sense whatsoever = irritating.


    Please have a HEART + love = stop.
    16 Jul 2014, 02:32 PM Reply Like
  • Tobi Hall
    , contributor
    Comments (6) | Send Message
    Here's a people aren't seeing in this. It's not that organizations are going to buy 1000 or 2000 iPads but 50 or 60,000. Creating productivity in the field by putting an iPad in every sales rep and customer service associate is gigantic and currently overlooked.


    Given the technology that Apple has and IBM's business acumen you will be able to walk in to your local Kroger and the store manager will immediately know who you are how valuable you are and what products you buy. The same thing is true at virtually every consumer/sales interaction.


    Coca-Cola alone has 600,000 route drivers. UPS has 800,000. All are using antiquated technology and clunky handhelds that can be quickly replaced with an iPad.


    This is enormous!!!
    16 Jul 2014, 01:30 PM Reply Like
  • DWBowers
    , contributor
    Comments (1301) | Send Message
    What's to be debated? IBM would have recommended Windows, Blackberry, or any other equipment that wasn't Apple and now they will be working with Apple. This is a huge win for Apple.
    16 Jul 2014, 02:18 PM Reply Like
  • AZWhiteMt
    , contributor
    Comments (45) | Send Message
    Thanks, believe this will increase AAPL Stock and provide necessary assistance.
    Great Job Apple.


    16 Jul 2014, 02:45 PM Reply Like
  • imac007
    , contributor
    Comments (742) | Send Message
    Munster is operating out of a hardware only paradigm. The Enterprise eco-system is likely to be more of a subscription model. With Watson already part of CarPlay, through the QNX underpinning, they have already started collaborative deployment. Of course CarPlay is not Enterprise but part of the connectivity being put in place.


    Healthcare represent half of the economy. Apple already have heavy penetration. The pharmaceutical companies are moving into app/device projects. The HealthKit/HealthBook provides a collection/management center for deployment/analytics. With Watson already making inroads on the diagnostics front with Watson, the rich medical platform already in place, dovetails nicely. Apple will take a percentage of subscription revenue just like it does with Microsoft Office. For the pharmaceutical companies, the analytics platform, iDevices store, the App Store all act like the equivalent of a tech pharmacy.


    With the analytics likely a 70-30 split and the 100,000+ agents/consultants paid for by IBM 70%, plus the hardware margins added to the Apple end, it looks very much like a fair split. Apple gain more on the front end while IBM margins improve on subscriptions over time. Apple will benefit from refresh cycles.
    16 Jul 2014, 02:47 PM Reply Like
  • imac007
    , contributor
    Comments (742) | Send Message
    The medical model can act as a metaphor for other businesses. QNX is deployed across industry in everything from factory automation, nuclear power plant management and in medical equipment. With both Apple demonstrating they can work with QNX and IBM with Watson, the parallels are strong. Everyone from the front line to the board room can be on top of things and integration becomes seamless from top to bottom. Real time analytics allows the base employee to get timely decisions, benefiting the entire organization, workers and the management alike.


    Tipping points come fast. Apple saw the dominos fall as consumer after consumer chose smartphones. Business cycles and existing agreements will slow initial adoption, but once refresh dates approach, the wave of change will surely be disruptive. It always comes down to customer experience. Enterprise customer experience requires a lot more human support and while Apple have such support for their professional products, IBM have complementary staff and support, deployed in almost every business sector.


    The top to bottom integration will be an experience that business will cling to, much like the consumer stickiness Apple experience today. Analytics is the big thing to pull all the Apple pieces together and Watson is the best of the best. Always adding the best to the best is their trademark. It is the foundation for superior experience.
    16 Jul 2014, 03:27 PM Reply Like
  • ludus
    , contributor
    Comments (478) | Send Message
    It may now be a much smaller part of Apple's business, but it will also impact computer sales. For those enterprise users who still need a desktop or laptop (many old PC are coming for replacement) OSX backed by IBM is a much stronger competitor. Apples computer sales may continue to grow even as the overall market shrinks from shifts to tablets.
    16 Jul 2014, 04:20 PM Reply Like
  • Anmorrison725
    , contributor
    Comments (9) | Send Message
    How in the world does aapl end down after an announcement such as this. Seriously?
    16 Jul 2014, 08:20 PM Reply Like
  • aardvark3
    , contributor
    Comments (676) | Send Message
    Bounce tomorrow.
    26 Aug 2014, 04:07 PM Reply Like
  • 7picks
    , contributor
    Comments (39) | Send Message
    AAPL will win period.
    16 Jul 2014, 08:39 PM Reply Like
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