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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."
I just had a weird waking dream. Charlie Chaplain, on roller skates, was brandishing his cane at the Big Brother screen in the 1984 commercial.
I need more coffee...
I watched C-beams glitter in the dark near the Tannhauser gate.
I think the first thing that would happen if such a merger took place would be that all the copies and references to the "big brother" superbowl commercial would somehow mysteriously disappear.
so should I buy apple or IBM stock?
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
IB-Applep le
i(B)Apple
Apple'BM
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Seriously, how implausible would this have sounded 15 years ago?
Small potatoes make the steak look bigger.
Do people not remember Taligent?
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 makes far more money selling POWER-based machines and their other non-Intel hardware than they do selling PCs.
Apple computers now use chips made by IBM; the PowerPC CPU was a joint venture by IBM, Apple, and Motorola.
The basis of this whole story is that Apple is absent from the PPC Consortium roster? Yikes!
For all we know, some editor could have forgot to put Apple's name in there. Or maybe Apple is still sitting on the fence about it, who knows. But this isn't even a "rumor" yet.
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.
Mesh? Feasible? Synergy?! Higher than 10% buzzword-to-intelligence ratio. Post ignored.
do not read this line twice.
IBM has very little to lose considering it's size and product diversity. IBM will open a whole new market for apple and if apple is the target of a takeover it will command a premium, thus the value of the stock will go up.
Q. What to you get when you combine Apple and IBM?
A. IBM.
Shamelessly stolen from Apple Confidential.
You'd think that by now, more people would've figured out a basic trait of Steve Jobs: he's got his own will, and he'll hit eject before he compromises it. A lot of people think that means he has a huge ego, and maybe he does, but that's not the point - he's spent an awfully long time trying to make the world see things his way, and he's not going to stop just because someone offers him a pile of cash.
A lot of industry writers don't seem interested in understanding Apple's motivation (which of course means trying to understand Steve), so they ascribe standard corporate motives, and we end up with wild-ass rumors like this. But of course that doesn't work, and they're wrong a lot (they're right sometimes too, but how many crazy rumors have you heard?), and so the industry looks at Apple like they're the crazy unpredictable man-child of computing. Who happened to get lucky once or twice with the iMac and maybe the iPod. Won't happen again.
But the thing is, they don't want to be on par with other manufacturers, and they don't want to beat them at their own game. Apple wants to change the rules and beat the others at Apple's game. That's the approach they've taken for a long time - iPod being probably the best example. It's also why Apple won't release a sub-$1000 machine, even though it might mean huge market share.
So in short, the article's another load of poorly thought-out crap. The idea that IBM could/would buy Apple is like saying that when you hit the lottery, your boss will be cleaning your house - the transaction has to go both ways, and as willing as IBM may be (and I'm betting they're not), Apple won't bite.
every good
This is just speculation to get attention, as near as I can gather. "IBM and Apple should merge!" sounds neat if you don't look at any of the context, but if you look at the actual products they sell it doesn't make really much sense at all. IBM targets almost exclusively corporate customers. Apple targets almost exclusively consumer customers. There's no good way to tie these two things together at all, especially since the existing product lines of each have no particular relevance or connectivity to one another. Okay, yeah, like the article mentions, IBM doesn't have a presence in the "lifestyle"/enduser demographic. Why is this a problem? That's just not their market.
About the only obvious place the products could tie together is if IBM wanted to sell macs as corporate desktops. But as far as I'm aware when IBM sets up corporate desktops, it's just to sell their server infrastructure and such-- that is, IBM's push isn't "we'll sell you all this infrastructure stuff and give you better corporate desktop machines as well!" it's "we'll sell you this infrastructure stuff and it will work with the corporate desktop machines you were going to sell anyway!" In fact as far as I'm aware despite IBM's great use of Linux in the server space they have yet to use anything but Windows on the desktops their solutions people set up-- they're transitioning to Linux desktops internally, but haven't shown signs that they want to try to change the general corporate-desktop status quo. Given all this, it would seem from IBM's perspective suddenly springing "and you should switch to macs for your desktops!" on their customers would make things a lot harder to sell. So I don't think that Apple's systems have much relevance to IBM. Conversely, I don't see IBM selling DB2 en masse to the end-user consumer market.
Meanwhile the article's support for itself is full of nonsense, for example:
Then of course there is Darwin, Apple's version of BSD Unix at the heart of its Mac OS X operating system, which would nicely provide IBM with a non Linux semi-open source alternative, and one that is focused on its on benchmark beating P (sorry G) 5 microprocessor
Why on earth would IBM want a non Linux semi-open source alternative? First off IBM has been making lots of money out of actually just selling Linux; second off if they needed an alternative to Linux they sell several "real" UNIX derivatives themselves; third off Darwin is very highly specialized for the needs and APIs of OS X, and many of the design decisions therein don't make really a lot of sense except in OS X's context. If IBM wanted to repackage BSD they'd have done it themselves by now.
I could maybe see it making sense if IBM tried to integrate their products better with Apple's-- I.E. trying to twist things so that XServes can be dropped into a IBM infrastructure package, or trying to sell packages of G5s as modeling boxes and IBM hardware as a render farm to places doing industrial graphics work. That would be neat, and definitely wouldn't hurt the situation for either company. However I don't see there being some kind of "missing puzzle piece" either Apple or IBM could fill in by working with the other the way the article seems to imply, and the article doesn't give me good reason to think there is one.
Irritable, left-wing and possibly humorous bumper stickers and t-shirts
IBM has wanted to get rid of Microsoft for the last 20 years or so without much success. Microsoft takes a big chunk of the profit in the low margin corporate PC business which does not leave much money on the table for HW vendors. IBM is a company that built its brand recognition on (at least perceived) quality, reliability and security of its products. Being forced to rely on a Microsoft OS as the most user visible part of a corporate IT solution is a disaster. The latest round of security problems with Windows XP and IE over the last year may have pushed IBM over the edge.
For the server side of the corporate IT market, IBM can rely on Linux or internal IBM OS variants. For desktops and notebooks there is really no option to Microsoft since the death of OS2.
If IBM chooses to offer Apple desktops and notebooks as part of their corporate solution portfolio, this will immediately make Apple products more acceptable from the perspective of CIOs. OSX user interface is easy to learn and use and OSX already supports the Microsoft Office suite, which is pretty much the only desktop (un)productivity suite used by most corporate customers.
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.
Since we're all in the wild speculation mode, what about this as another possiblity: IBM licensing Mac OS X and working with Apple to produce business-class OS X systems with IBM branding. (sort of like what HP did with the iPod)
/iMac sales.
As has been stated here often enough, Apple does not really have what businesses need in a machine: inexpensive (relatively) headless machines that can be dropped into an office cubicle. And there's a good reason for that. An Apple workstation for $800 or so would cut into their Power Mac
However, if IBM were to release one only available to businesses it might satisfy this need while allowing Apple to protect their core business. IBM could then add their own software or add-ons to integrate with their server line. Maybe even ship the systems with Office pre-installed for businesses.
Whether corporate America would buy into it or not is another story, but it makes for an interesting thought.
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
Yeah, for this to happen IBM would want to jettison their PC business.
Oh, wait...
Uhhh, do you use a hair sharpener, or is it just naturally pointy?
By the way, both companies have a heavy-duty nerd culture in the depths, hidden away where no one sees it much. Apple glosses it over with hippie chic. IBM uses yuppie chic instead. Underneath that *ppie chic, they're more alike than anyone wants to admit.
Basically, the only groups that would have to be kept separate would be the marketing departments. And even then, the marketers wouldn't be stepping on each others' shoes, since Apple sells end-user gadgetry and IBM is now a server-room iron and polish vendor.
Even armchair PHB's miss the clue boat. Jeez...
They actually do have a sub-$1000 computer - it's called the eMac.
Basically though I agree with the point you are making.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
How has no one yet brought up the old adage:
IBM was created by guys who drank beer.
Apple was created by guys who smoked pot.
Careful when mixing substances!!! ;)
...is merger.
Did Apple and HP merge? No.
HP is selling iPods. Not a merger, a stretegic partnership.
IBM and Apple could never exist under the same management but they could sell the same products to different people (i.e. HP iPod.) Apple isn't letting anyone build competing hardware but it is letting them sell the same hardware to groups of people that it can't reach alone, in the case of HP that would be windows users, in the case of IBM it would be businesses.
Apple has clearly shown how to impliment open source in their business practice (please feel free to bash on this point, but they are a profitable company integrating open source concepts into their business strategy with success) which IBM is surely interested in, and it isn't windows.
Did anyone read the article on CELL processors?
Hello, they're based on 970s.
Apple has held onto their operating systems with a stranglehold. I doubt they'll ever sell of their desktop business, selling computers is what makes them money. They have the best margins in the industry.
Not since Marie-Antoinette played milkmaid has looking simple and honest been so fake and complicated.
That would be amusing to say the least.
Basically IBM would change the plastics to black and focus on selling to corporations.
I will be first in line for a iBM 17" PowerBook(black anodized aluminum).
designed for the sole porpoise
When you put it like that, it does sound a bit fishy.
To summarise the summary of the summary: people are a problem. ~ h2g2
If Apple, IBM, and Sony would all team up, we might actually see a drop in windows market share-but thats only if they can converge nicely into a streamlined unit providing desktops, servers, services, and game systems unbeatable in the wintel world.
This theory seems to bring together several loose threads floating around. First, were the rumors last week that IBM was selling it's PC division to some firm in Asia. Next, was the fact that these new cell Processors will be amazing, but Windows doesn't like anything but x86. IMHO, it seems that IBM is planning on selling their wintel PC division, and own the PC market later with cell processors run a new improved Mac OS. Think about it, the only reason Macs never caught on were because people didn't use them at work (didn't want to learn something new for home), and they were too expensive (Apple couldn't take advantage of Economies of Scale the same way Dell can). IBM will make Macs rollout well in large enterprises. People will be able to buy them for their home. And they will be orders of magnitude faster than their Wintel counterparts which are stuck on x86. I don't want to say it, but the combination of a new hardware platform(Power Cells), and a viable alternative in the corporate and home enviroment [IBM/Mac], and the server market [IBM/Linux] may spell the end of the Windows monoculture. Or I may just be getting my hopes up. I'm allowed to dream, aren't I?
Yeh that mainframe hardware really sucks, that's why large organisations are always suffering catastrophic losses of vital data. Oh wait.....
Does a Christian soccer team even need a goalkeeper?
...IBM.
Do not mock my vision of impractical footwear
Okay, look, I *really* don't mean to troll here. This would NEVER happen. EVER. AAPL right now has a P/E of 95--it's the stock's highest valuation since the bubble, and it's above the consensus price targets according my little friend Bloomberg over here. This means that IBM would have an extremely difficult time getting a decent return out of such an acquisition, and you can trust me (if you can trust an M&A banker at all -_^)--IBM doesn't like to pay huge multiples.
IBM could gear up and go all consumer on our asses if it wanted, but it's not going to because the company is committed towards moving away from things it is historically weak in. It could gear its PC unit up-scale and sell value-added, noncommoditized PCs if it wanted, but it doesn't because they're not particularly useful to enterprises.
It would NOT be possible for IBM to suddenly leverage Macs from 5% to 80% market share, and if it tried such a pitch to a valuable customer, well, HP would be up one valuable customer and IBM down one Sales Manager and one Palmisano.
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