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Daring to Dream: Apple & IBM
Anonymous writes "The Register has
a comment piece of the marriage (speculative) between IBM and Apple. Although wildly speculative, it is not improbable. With IBM already supplying PowerPCs to Apple and Apple having not signed up to IBM's PowerPC consortia, there are hints in this get-together. Apple would also supply IBM with the "lifestyle" side of things. If it does happen, it would be most interesting."
IBM is a company focused on growing its services biz and Apple has none.
Apple is primarily a B2C company and IBM is B2B.
Cultural differences make east vs west like the definition of homogenized
Steve Jobs and his amazing ego
Yeah, except for a few trivial things, it could happen. Hey, frogs could grow claws and live in toilets too!
"I'd rather be a lightning rod than a seismometer." -Ken Kesey
Not only are the companies' cultures VASTLY different and would never mesh well, there isn't a feasible synergy among the two. It would not make business sense I believe.
More like, "which one should I short?"
Can anyone actually see Mr. Jobs actually going for this? I think that this rumor has as much credence as the old saw about Apple switching to an Intel/AMD processor for new Macs.
There is absolutely NO way that Steve would let this happen. Apple is EXACTLY where they want to be - they may occupy a niche in the PC market but they are trying -- and succeeding -- at being the BMW/Porsche of personal computing rather than GM. They are making money hand over fist, increasing shareholder wealth at a nice pace, and doing all of this with some kick-ass products. Going to IBM would flark all of that up quicker than fast.
[Owner/Operator of iBook G4 and Dell 5150]
-- @rjamestaylor on Ello
IBM exists to serve corporate customers. Large corporations are not clamoring for apple (I say this as the happy owner of an iBook).
IBM has to have compelling reasons to think it can make money by convincing either (1) corporations to buy macs or (2) consumers to buy from IBM.
Let's look at the price tag. Since Apple's current market cap is $25 billion dollars, IBM would have to pay something in that range to purchase Apple.
To put things in perspective, IBM is expected to receive $1-2 billion from the sale of its existing PC business. IBM has about $10 billion in cash in the bank.
Does IBM have the money? Only by issuing more debt (IBM has about $22 Billion in debt already) OR by purchasing Apple using IBM stock which would dilute shareholder value.
Does IBM have the will and/or stupidity to pursue such a deal? NO.
Sorry, people. Computers are ho-hum commodity items. No serious person really gives a damn about the latest "fastest pc in the world" anymore. Sure, there are your righteous reality distortion field types and your "you can't get fired buying IBM" droids, but they are dying breeds.
... now ... computers.
In business investing, the cutting edge eventually turns out to be a sinkhole: railroads, airlines and
Clearly, IBM is exiting that business. Given that the iPod is taking off while Apple desktop market share remains tiny, Apple's direction is becoming clear. The computer business is becoming a drag on the stock, tying up too much capital without generating revenue in proportion. At some point, Apple will probably sell off its computer business and become an entertainment products company.
I agree with the assessment, but will play the devil's advocate. Under one circumstance, this makes sense. The return of the data center to the center of the computing universe. Almost everything we do now is network facilitated on a consumer level. Music, video, information... The ipod is nothing if not a terminal with storage. Mobiles are arguably the next level of the computing space.
The old Moto/Apple/IBM alliance of mobile device platforms with services for consumers would supply the platform for extending the iTunes style of services through the computing environment. I spent Sunday getting my girlfriends router back up, and a couple of days a few months ago rebuilding her adware infested Dell into a clean terminal for writing, communicating via email, and surfing. Why?
The world is ripe for change, and these three supply the basics for rebuilding the consumer computing space. Apple provides a clean consumer environment with such very useful technologies such as ZeroConf for transitionaing between home, work, and the road (cell/wi-fi/wired networks). IBM can supply the scalable data services, and Moto the cellular technology.
This makes more sense than the rumors regarding Sun and Apple!
Rather than a merger of companies, a merger of interests. Darwin/AIX.
IBM currently has in AIX an operating system that they've invested a lot of development time in, but aren't getting much traction with. Partly because of that they've been focussing more on Linux.
Apple has a relatively recent server line, and an operating system based on an open license, Darwin. If IBM put it's AIX and Linux technology in to Darwin, they'd have a OS with a much wider user base, and Apple would get a server OS with a much stronger reputation behind it.
IBM sells more chips, Apple sells more servers, and both get an upgraded OS (IBM would probably not use OS X/Aqua, just Darwin) with a lot of tried and true capabilities. Win/win.
IBM doesn't have to buy Apple to sell Apple products.
Why would IBM do this? For one reason: customers are asking for it. Maybe IBM is seeing a lot of customers who want to migrate from Windows. IBM can't sell anything to them because IBM doesn't have a lot of other options. Desktop Linux is a joke (sorry). Nobody wants to wait for it to mature.
If IBM signs on as an Apple reseller, then suddenly there's a viable Windows desktop replacement that IBM can sell.
What does Apple get? Sales, lots more sales. IBM becomes a large business channel partner, and Apple can keep ignoring the business market (which is pretty much what it's doing now). Apple tries to make enterprise plays, but it really doesn't have the infrastructure or mentality needed to succeed in the enterprise space.
What are the problems with this scenario? There are a bunch:
* It's unclear that Apple could meet the increased demand.
Apple has problems getting enough inventory to feed its own demand. This apparently is due to IBM's poor G5 yields.
* Apple doesn't understand the needs of business computer people
There's no on-site service, no guaranteed turnaround time, no dedicated support line for businesses. IBM would take care of this.
* Apple's product designs are created with no input (as far as anyone can tell) from customers.
This is a problem. Business computers have different needs than personal computers. They don't need a monitor,and need management tool integration (ARD is nice, but it needs integration with at least Tivoli, CA, and BMC).
* Apple's product cycles are too fast
The buying cycle for business computers is months. Apple's product cycles are a bit too fast, and they'll pop a new box out before the sales cycle is done, requiring readjustment of the sales contract. It's silly, but this is a logistical problem that needs to be fixed. At a minimum, older product needs to be available for shipment/purchase if newer models are released.
* Apple hasn't successfully run a channel operation before
Well, the edu channel was OK, but got whacked recently. Their dealer channel is competing with the Apple store. And basically, Apple may not be able to run a channel very well, being a consumer company.
Don't get me wrong, the benefits to Apple would be huge. The benefits to IBM, the business world, and humanity would also be huge. But it's one thing to float an idea, and it's another to make it successful.
The cultural hell that was the merger of IBM and Lotus would be nothing compared to this.
Also, Apple is the ultimate end-user oriented company. They sell, talk, and work directly to the end user desktop. IBM has proven over and over that they've great at mass manufacturing new technologies at great expense and even more great at inventing new ones. The stink, however, at direct customer interface. The smaller the point of contact the worse they are.
IBM did great with Fujitsu and Dell -- selling components for PC's (in Dell's case, tons and tons of Travelstar and Deskstar drive) but try to go buy one directly from IBM yourself. Its very hard. They just don't know how to do deal with people.
This isn't the kind of company that could absorb those skills from Apple either. Apple would dissapear with the great IBM universe and never be the same.
no, Apple works best as a swift and lithe innovator. Let IBM make the guts, let the Apple folks package it and sell it.
-- ME
The problem with quotes on the internet, is that nobody bothers to check their veracity. -- Abraham Lincoln
IBM would gain an OS that ran on their own CPUs (no money to Intel) and ran MS Office (important in the corporate world). Apple would gain money from every OS X workstation sold and, perhaps more importantly, a second source - making them more attractive to corporate customers (or, rather, making IBM workstations running OS X more attractive to customers) and the ability to sell expensive service contracts to these customers. Apple would also gain from increasing the volume of PowerPC 970 chips in production, since this would reduce the unit cost. Unlike the clone debacle of the '90s, Apple would not lose customers, since they would be focussing on a completely different market segment to their partner in the join venture.
Of course, this is entirely conjecture.
I am TheRaven on Soylent News
Let's not forget that all the PowerPC's (from the 601 on) were built in partnership with IBM. They are based on IBM's POWER line after all. Remember when the common hardware reference platform with IBM and Apple was going to be the future?
Then there are all the software ventures they've worked on together. Apple and IBM have been pretty tight for a good decade now.
IMO working together as separate companies, each doing what they do best in the way that works best for them, is a much better fit for both companies.
Err... isn't that part of the whole idea? Why would you merge or buy a company for something you are already good at? The article is based around the fact that the two companies are a natural complement to each other, and these points you make merely support that hypothesis.
You're missing the point. The grandparent post was talking about goals. You are talking about capabilities.
What you want to do is buy a company that does something that you aren't good at. What doesn't make as much sense is to buy a company that does something that you don't do. That is what IBM buying Apple at this moment would be. IBM isn't good at what Apple does right now. But it isn't trying to be good at what Apple does right now, either, and becoming good at what Apple does right now wouldn't help the things IBM does do.
The article, like you, mistakes selling different things for being a natural compliment. "Natural compliment" assumes that putting these two things together would make them stronger than the sum of the strength of the two as separates. Instead IBM and Apple merging would fit together like oil poured on water; yeah the boundary between the two would be nice and clean, but you might as well just keep them in different containers.
Yeah, for this to happen IBM would want to jettison their PC business.
Oh, wait...
MS Office. The main reason you aren't seeing IBM-made POWER/PowerPC workstations in offices is that they don't run MS Office. If they did, then they would be a lot more popular. There is no version of MS Office for Linux or AIX (I'm not counting Crossover, since it's not supported by MS - something important to corporate customers). There is for OS X.
I am TheRaven on Soylent News
Most of the Apple hardcore loyalists would drop Apple like it had a big nasty worm.
Why? I've used nothing but Macs (other than my TI 99/4A). What would a merger with IBM have to do with people leaving the Apple platform? If anything, IBM's economy of scale manufacturing should make Macs less expensive. That would be fine by just about every Mac user I know.
I drank what? -- Socrates
Please explain how this is going to or could put Microsoft out of business? Is Apples market share going to magically grow from under 5% to over 80%? There is no chance that this merger will kill Microsoft as IBM will still continue to distribute MS products and they are what are in high demand. Get a clue Apple will never kill Microsoft or grow to be anything more than a niche OS. If any OS does it, it will be various distributions of Linux as it provides no lock-in to a single distribution, it's free and can accomplish all of the same tasks. Apple products have the same lock-in that MS products do with very little advantage and all at a higher price.
Please explain how this is going to or could put Microsoft out of business? Is Apples market share going to magically grow from under 5% to over 80%? There is no chance that this merger will kill Microsoft as IBM will still continue to distribute MS products and they are what are in high demand.
Well, I doubt it could do that, but that isn't the point. Huge as it is, one of the reasons IBM is (allegedly) getting out of the PC hardware business because the margins aren't big enough to make being in it worthwhile. While Macs have a smaller niche, Apple makes a higher profit per machine sold than most PC vendors.
Anyway, consider the possibility of OS X on P-series workstations and workgroup servers. While it's doubtful there would be a massive paradigm shift, there are quite a few opportunities for expanding the Mac market share, and a whole lot of potential bucks to be made.
Sorry folks, this would be an unmitigated disaster. If you've spent any time with employees of IBM and Apple (in a professional setting) you will know that the cultures are wildly different.
IBM is still all about sales, employing thousands of technical salespeople, they have a whole fleet of techies in each theatre of operation devoted to on-site support, technical "deep dives" and so on. Apple is trying to do the consumer thing, their consumer touch points are the Apple stores and their entire marketing campaign is aimed at young, hip, urban folk.
The marriage of these companies would undoubtedly alienate one or both sets of employees. Jobs could not be on top (running pixar, apple AND IBM??) and Apple could not operate how it does, with micromangers roaming the halls making last minute design changes and changing the direction of projects on the drop of a hat.
Anyway, this seems like wild speculation to me and if it's true, more power to them. But I see very bad things for a marriage of this type.
Dump OSX and replace it with OS/2 Warp PowerPC edition! ;-)
Yeehaw, good by aqua, presentation manager here I come.
...various distributions of Linux...
/. readers are.
That is exactly a problem with LINUX's incompatible versions that only a geek can use. An ordinary user cannot go and buy off the shelf or order off the 'net many programs that will run on all versions of LINUX. Until the LINUX community standardizes as well as Windows or the Mac, LINUX will always be a system for professional expers, like most
All theory is gray
There is no chance that this merger will kill Microsoft as IBM will still continue to distribute MS products
You are right in saying that the defection by IBM from the Wintel market would in no way "kill MS", but then I doubt anybody is seriously suggesting that it would. MS is HUGE afterall. On the other hand, if you had read the article, you would know that IBM are in the process of selling off their PC business. Once they have done that they will have precious little reason to want to continue selling MS products. Consider these points;
1) IBM are one of the most active
Linux-on-server evangalists in
vendorspace.
2) IBM continues to harbour extreme
bitterness over they way they were
shafted by MS during the OS/2 fiasco.
3) IBM surely desire to sell more of
their own PPC chips, which are not
supported by the MS OS, but are
supported by both OS/X & Linux.
Add these things together and I find it hard to imagine that IBM would either need or want to continue selling MS products. They might continue to offer some limited MS Server products with their low-end x86 server range alongside the Linux on PPC that they will be undoubtably pushing, just to maintain a "complete" product range but you can bet your bottom dollar that this will be a shrinking business for them and the sooner it dies the better it will be from their perspective.
A marriage with apple would be VERY attractive to IBM. They could for the most part ditch Microsoft altogether and by doing so build up their own PPC CPU business. Apple would become their defacto PC arm, and with IBM pushing Mac OS/X on PPC into businesses you had better believe that a lot of PHB's would stand up and take that seriously as a viable desktop platform. You have the "business cred" of IBM coupled with the "cool factor" of apple and you have a force to be reckoned with.
"You can't fight in here, this is the war room!"