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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
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.
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.
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!
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
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
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.
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!"