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IBM and Apple: Catharsis

IBM did not invent personal computing but their “PC” became synonymous with the category. Having entered the market in 1981, the IBM PC quickly became the top selling brand. From 1984 to 1993 IBM sold more PCs than any other vendor, conceding the spot to Compaq which remained on top only until 2000. No PC vendor remained at the top of the sales leagues longer than IBM. HP had the second longest run but that run was broken last year as Lenovo (who acquired IBM’s PC business) surged.

Screen Shot 2014-07-16 at 4.19.11 AM

As the graph above shows, the period of time when IBM was dominant was characterized by far lower volumes. In 2004, the year IBM exited, they sold about 10 million units. ((as the graph shows, if we consider Lenovo as taking over from there, they did a very good job extending the legacy.)) It was a decent performance but one that did not keep up with the Dell and HP/Compaq race to the bottom in pricing and subsequent rise in volumes.

However, throughout its position of strength, IBM was a reluctant PC maker. IBM never controlled the PC platform the way they had controlled their mainframe and mini-computer businesses. Their falling out with Microsoft over OS/2 and their attempts at differentiating with the PS/2 architecture show how uncomfortable the situation was. Their exit in 2004 must have come as a relief and, in retrospect, they should be congratulated for having exited the market well before it began deteriorating. First came pricing and margin collapse and later total volumes began to decline. Most of the remaining vendors are today in various states of distress. Lenovo is growing but incumbents like Dell, HP and entrants have come and gone (Fujitsu, Sony, NEC, Toshiba). Potential disruptors  like Asus and Acer have found no long-term success with PCs.

This is because without control over the platform, PC hardware is nothing more than a commodity, with negligible margins, intense competition and an inability to control one’s destiny.

One company making computers did manage to control its destiny. By continuous refinement, the Macintosh survived and even thrived as the market pivoted toward mobility (and hence requiring integration that values design).  Indeed, Apple now ships over 17 million Macs a year. More than either IBM or Compaq did at their peaks. It’s not in the top five globally but has a very profitable niche.[1]

As a matter of fact, through 2013 Apple shipped a total of 156.5 million Macs,  50% more than all IBM PCs ever shipped. Apple also shipped more than twice as many iPads and five times more iPhones. And it’s not just popular with consumers. With iOS Apple manages to reach 98% of Fortune 500 companies and 92% of Global 500.

At the same time, even though IBM exited the hardware business, it remained a powerful force in computing. IBM pivoted to primarily being a service company with a vast client base and increasing global reach. It essentially moved up the value chain to become an integrated services provider to business customers. IBM’s reach in breadth and depth of services is extraordinary.

This dramatic turnaround–Apple moving to a device leadership position and IBM moving to a service leadership position–created the conditions for today’s announcement of a strategic partnership–an event which is astounding to those who witnessed the 1980s and 1990s. Were it not for the tenacious independence of Apple and the business model agility of IBM, neither company would be around today to leverage one another.

There is drama in this industry and this latest chapter has a plot twist which any poet would envy.

Notes:
  1. It’s very likely that it captures more operating profit than the top five vendors combined. []
  • deemery

    More than anything else, this is a direct assault to Microsoft’s chokehold on corporate computing. RIM/Blackberry got its foot in the door, but did so pretty much by holding its mail service outside of the corporate moat. I’d expect to see IBM contribute ‘devices at scale’ services, as well as targeting devices and software to specific markets.

    The interesting question is whether those services will be IBM cloud based, or whether IBM will sell services to corporate CIOs for integration within a corporation’s own infrastructure (or both…)

    • Shameer Mulji

      “More than anything else, this is a direct assault to Microsoft’s chokehold on corporate computing.”
      To do that, first you have to go after MS Office and it’s 1+ billion users. That alone will be a monumental challenge. On top of that there’s Outlook, Exchange, SharePoint, Dynamics, SQL Server, and Azure. Those are all $1+ billion dollar businesses.
      It’s going to be awhile (if ever) before you unstrangle that chokehold. Apple would do well to sign a similar agreement with MS.

      • rogifan

        As long as Microsoft is in the hardware business Apple would never do that. And Microsoft will never do it as it surely would drive their OEMs even more into the arms of Google.

      • Shameer Mulji

        As long as MS is in the hardware business, that in and of itself, is enough to drive their OEMs into the arms of Google. Which is why it would serve them to play to their strengths as a software company focused on Enterprise / Cloud / Big Data / Machine Learning / Productivity apps.

        It doesn’t have to be an exclusive or a hardware deal with Apple but something as far reaching as bringing all their enterprise & productivity apps to iOS and the Mac would be a great start.

      • Walt French

        Where did I hear — was it from Cook in the CNBC interview? — that many mobile devices in the Enterprise are used for simple email, calendaring and web access?

        There are some verticals where a field tech, pilot, nurse, researcher, etc, can do fine with a single, company-built app. There are more that are driven by Salesforce CRM or several Oracle applications.

        None of those vertical apps are built atop Office, nor should they be.

        Look at the trouble that Microsoft has had porting Excel to its own tablets: the function bloat is all wrong for a fat-finger-friendly interface, so a user needs a keyboard for important functions. The tablet is a distinctly inferior device for spreadsheets the way they’re used in Corporate America. The user would be better-served with a laptop.

        So the Office stranglehold is actually strangling users who need highly-mobile functionality, and it has hurt Surface / WinPhone sales more than anybody else. Companies who want mobile workers (or need them) now have a new suite of choices for applications. This should accelerate mobile adoption, leaving those of us who are happily desk-bound to play with our spreadsheets.

      • deemery

        I’d separate Microsoft’s monopoly with Office, from its back office functions. It’s the latter that will be targeted by IBM, one of its long-time strengths. Microsoft has mail server locked up right now, but that could change with an investment from IBM. SharePoint is clearly in my experience vulnerable, it’s clunky and hard to both manage and navigate. SQLServer has competition from Oracle, DB2, and others.

        Right now no CIO gets fired for buying the entire Microsoft back office suite, at whatever price Microsoft sets. But competition in back office functionality, starting with the ability to replace -parts- of the Microsoft suite, with functions that work better with devices other than those running Windows, will get a lot of leverage.

        With respect to the Office monopoly on desktops, it will be interesting to see if Apple invests enough in iWork to challenge that. God knows, Office, particularly Word, “inhales vigorously” and is seriously ripe for disruption.

      • Joe_Winfield_IL

        So what if Microsoft has a monopoly with Office? It runs fine on iOS. Everybody wins if IBM/Apple deal takes off. Doesn’t have anything to do with the back office suite of services discussed here. Same with Exchange.

        Now if IBM is able to convert millions of device purchases to iPads and iPhones, CIOs may be compelled to take a stronger glance at the Mac than ever before. Continuity features have the potential to be huge for productivity, and nobody else has a feature set that is even close. The only Microsoft product that would be affected is Windows; the rest you mention are all cloud based and can run on whatever client Microsoft chooses to support.

      • SubstrateUndertow

        The advances in mobile/social/cloud have now reached the critical mass required to fuel a complete rethink/rewrite of the enterprise workflow around mobile/social/cloud hardware/software.

        Microsoft’s enterprise dominance is based on a software toolset originally designed to accelerate/automate legacy workflow models.

        The question is whether most enterprise customers will chose to suffer through another round of tedious Microsoft toolset retrofits given their track record or be enticed to make a clean start with iOS/IBM services?

      • handleym

        I’m not at all convinced that MS Office is intrinsically valuable to most people and most enterprises. For most people Word and Excel are vastly more complicated than they need, and generate (especially Word) substantially sub-par quality documents — you can always tell when something was created by Word because the kerning and justification are sub-par and the mathematics looks like crap.

        There are SOME users that really do make use of the full sophistication of Excel, and there are some environments that utilize Office Basic macros to enforce workflow patterns. But for every such environment and user, there are dozens that (based on what I see) only use Excel and Word because they’re what’s provided, and what they’ve used their entire lives.

        There won’t be a single tipping point, but my guess is that the combination of Google Docs and Pages+Numbers are going to slowly chip away at MS Office till, ten years from now, the entire workplace population will be schooled in the idea that there are multiple tools one can use to write a three page memo, and if this particular office doesn’t provide MS Word, well, we’ll use whatever they do provide.

        (As something of a first wave in this change, I’d point to the now almost universal use of PDF to distribute finished documents, which once upon a time used to be distributed as Word files.
        Word still rules when it comes time to sling around documents that need to be modified — but every day more people are showed Google Docs and shown that it’s simply silly to keep emailing a Word file back and forth when you can just edit a Docs file communally.)

      • http://www.asymco.com Horace Dediu

        My guess would be 5 years before Microsoft signs the same deal IBM did with Apple.

  • Mark

    One aspect of both companies that intrigues me is neither is “race to the bottom” oriented. They appear to be about bringing superior value to the table, value that people are prepared to pay for. This pushes Microsoft to actually provide better than “good enough, and just wait till the next version” and Google with its Android partners showing they really care and can provide secure big analytics capabilities

  • Walt French

    Well, not all observers who “witnessed the 1980s and 1990s” are astounded.

    Just a couple of days ago I proposed somewhere (Techpinions?) that Apple team up with Microsoft to this same end. (No, I didn’t/don’t think that Redmond is ready to write down the maybe $10–$15 billion that it’s pumped into its money-losing WP effort, which I think would be a pre-condition.)

    It’ll be interesting to see the power of the symbiosis here. Nadella just days ago claimed that Microsoft was uniquely positioned to bring the power of big data, the cloud, to mobile. He’d better get however many employees are still on the payroll at month-end moving pretty quickly if he wants to show a competitive offering.

  • r.d

    NeXT and IBM had partnership on NeXTStep as well
    to use as OS.
    Bureaucracy and Hurt Feelings along with Microsoft
    coming in with OS/2 and then backstab.

    Apple and IBM did the OpenDoc dance.

    Also PowerPC.

    This could end up like HP selling ipod classic.

    • http://twitter.com/LunaticSX Lun Esex

      There is little comparison with this and HP selling the iPod Classic other than a big non-Apple company providing sales for an Apple product. It’s not like HP had any reason to push sales of iPods to their enterprise customers, or write software to integrate them into their enterprise offerings.

      • airmanchairman

        It was glamorous lipstick on their grey pig :-)

    • Sammy

      The HP iPod deal….

      For HP
      Time limited contract to sell a profitable device at retailers that Apple had no distribution.
      Branding – hey were HP, but were cool again.

      For Apple
      Expand iPod distribution to more retailers, and then build a continuing relationship when HP contract is over.

      Example
      Apple had no distribution whatsoever through Radio Shack (which was large during the contract) but now sells directly to Radio Shack.

      For Apple, the HP contract was a win-win, between Radio Shack and other HP retailers, Apple added 5000+ US retail locations that sold iPods.

      • twilightmoon

        Many of those now sell iPhones, so that is a continuing win for Apple.

  • Luis Alejandro Masanti

    This —I think— is Apple reinventing itself at its best.

    And the best part —from the video of CNBC— is that Tim & Ginni are working on this from back two years.

    Apple is ‘planning’ its way to (continuos) success in Tim’s hands.

    According to the photo that John Gruber would like to see in the press release, Steve wouldn’t do this relation. But it was Steve that told Tim to do what he feels the best.

    The Times They Are a-Changin’…

    • http://twitter.com/LunaticSX Lun Esex

      “Reinvention” is way too strong a term.

      Simple “growth” or “expansion” would be better.

      Apple is already *in* 98% of the Fortune 500. This simply expands that, and gives corporations confidence that Apple is “serious” in their support.

      • jameskatt

        Nah. It can’t be growth and expansion if you already have 98%.
        This is the re-invention of Apple in the enterprise.
        This is Apple as the business hardware weapon of choice with the logistic support provided by IBM – which is IBM doing what it does the best – service.

      • airmanchairman

        And when corporations begin to assess and test out the potential benefits of innovations like Handoff, AirDrop & Notifications (working with 3rd party and web apps), the beachhead will have been cleared for MacBooks, iMacs and Mac Pros to invade the Enterprise – GERONIMO!

      • Joe_Winfield_IL

        That’s exactly right. Apple may be *in* 98% of Fortune 500 businesses, but that doesn’t mean that all 490 massive companies are buying devices in bulk with major buy-in from CIOs. If this deal goes well, that will change quite a bit in the next couple years.

      • theothergeoff

        this thread. The bigger deal, the fact that all those blackberries and winphones will be retired, and those ‘dual’ phone employees will have one phone to do both work and personal stuff.

        If you figure there are 1 million phones in the enterprise that are ‘enterprise funded’ this isn’t a big deal… however, as the offices go more paperless, and more mobile, the iPad as a replacement for the laptop is a big deal… there are probably 20million laptops in the F500… 80% of them are candidates for either a iPad, or a Continuity linked MBA… or both. It’s a major Halo effect… the same that I grimaced my way through with microsoft zealots saying that WinPhone is the obvious synergy with Windows on a laptop….

        Much like orgs built ‘html apps’ with ActiveX/IE6 as a ‘primary’ platform, having orgs that IBM consults in having the ‘we have your back’ committment from your consultant in building a suite of iOS apps and iOS management capabilities gives Execs a comfort level they don’t currently have when the CTO asks her MCSE trained directors how to support Apple in the workplace (“make sure they dual boot to windows”).

    • sizuco

      Actually, I believe Jobs could have done this partnership as well. Don’t forget that it was Jobs who accepted Microsoft’s investment/partnership way back when he first returned to Apple – and MSFT was more of an arch-enemy than even IBM.
      The reason why Jobs went ballistic over Google was not because they were competitors but because he felt Google had knifed them in the back (with Schmidt on Apple’s board).

  • berult

    A momentous merger of verse lines; an ode to a future un-conditional tense that ought to have come out of the Blue.

    iBM and Apple; “obviously complementary, my dear Watson”.

    • airmanchairman

      Take it away, Berult…

      Watson Cognitive Healthcare + Apple Healthkit API’s + Siri = Healthcare gamechanger!

  • http://sumocat.blogspot.com Sumocat

    “Catharsis: the process of releasing, and thereby providing relief from, strong or repressed emotions.”
    Bet that felt good.

  • sizuco

    Wondering why Acer is in free-fall while Lenovo is still growing?

    • 程肯

      Acer made a big bet on netbook leadership, which they haven’t recovered from.

    • theothergeoff

      Lenovo, for lack of anything else of corporate quality, still builds a decent corporate computing line, and after the years delay to avoid moving off of XP, corporations have to replace laptops that can run Win8.

  • sizuco

    Genius move by Apple. A foothold into enterprise is what’s its missing. BB is dying, Android is too open for enterprise, and WP, well lets say that Microsoft better scramble its jets.

    • synthmeister

      What jets?

      • sizuco

        “scramble the jets” = a country’s response when under sudden attack

      • synthmeister

        I know that. MS doesn’t have any jets to scramble. They are completely lost in mobile. Enterprise was already embracing Apple before this announcement. This deal, at the very least, puts a mammoth moat around iOS in the enterprise.

  • peto1

    Sweet, sweet irony – a Blue Apple …

  • RJM

    Umm… – Watson Plus Siri = ?

    • obvious

      yes this is the golden nugget: brains for siri finally

  • jinglesthula

    Couldn’t help but think of the rambling missive from Nadella and the commentaries on it (see recent links from Dalrymple and Gruber). It looks like there’s may be a great deal of overlap between what MS wants and what Apple + IBM announced.

  • Srikanth Rajagopalan

    Good article, though I think the device shipment comparisons are a little out of context, being compared across very different periods of time and demand scenarios.

    I agree with you that this announcement of a collaboration between IBM and Apple could re-set the paradigm completely. However, these kinds of strategic partnerships will need sustained CEO-level effort over time to take off and achieve their full potential. Too many strategic partnerships start with much fanfare, but get lost in implementation when two very different organizational cultures come up against natural friction.

    • sizuco

      Two reasons why it’s likely to work:

      . This one seems to have a lot more concrete landing gear than the usual “groundbreaking mutual cooperation that will change the playing field” corporate speak.

      . Also Apple doesn’t have a history of major partnerships, which means a lot of work/planning must have gone into it.

      • Joe_Winfield_IL

        Totally agree on both fronts. Apple doesn’t do this sort of thing, which is why the announcement was major news everywhere yesterday.

        The roles both companies will play are pretty well spelled out. The CEOs can be transparent about almost all facets of the deal without the need for corporate doublespeak and hollow rhetoric for a few reasons:

        -Apple and IBM are not competitors. At all. They have huge customer overlap (enterprise) in theory, but they are selling completely different products.
        -No hedging language required because neither company currently has a similar program in place with anyone else.
        -Both companies love the idea of control and integration. IBM isn’t all about market share and user count; they sell premium services and applications at a premium price, and don’t need to replicate yesterday’s deal with Samsung/Google/Microsoft to get market acceptance.
        -Sales incentives won’t be complicated between the two companies. Nobody at either company should be threatened by the new deal.

      • theothergeoff

        I’m thinking more in the halls of Accenture, PWC, Deloitte, CSC, and the GooglePlex. The former 4 are IBM’s enterprise technology consultant competitors, and the latter, well, we know the latter.

        Waterloo’s halls are probably pretty empty by now – the tough day’s have been much worse in the recent past.

        Redmond actually isn’t hurt much by this, at least in a ‘oh my god, this changes everything’. Windows (Exchange/AD) isn’t getting moved out of the datacenter, and I think between the lines their recent announcements have ceded mobile HW to the big 2. This does impact their AD based Enterprise management a bit, but in the end, this is the sort of competition for Tivoli that IBM needs.

  • wilhelmreuch

    Apple and IBM teamed up in the early 90’s to build a common operating system as I remember it. Apple sent in “project pink” (later called Copland) and IBM its “patriot project” and some years later Taligent emerged. But Taligent required 64Mb in the client which was to much for the time. And Taligent was an enterprise-level application framework, not an OS. It was just before IBM started its Smalltalk thing. I kind of liked the UI-idea Taligent had, I thinkit was called People, Places and Things.

    • theothergeoff

      I tend to deprecate ‘that Apple’ (non-Jobs, non-NeXT), to the NeXT – IBM relationship to try to put NeXTSTEP on the RS6000. While it was an abortive attempt, it was the precursor to ‘fat binaries’ (White NeXTSTEP), which then lead to OSX on the G3/4/5, and the Intel migration.

      This is much different. Apple is effectively using IBM as their Gov’t and Global Enterprise Channel, and IBM is gaining a lead as being ‘accepting’ of the Apple in the Enterprise Challenge (I used to work for a TierA consulting org, and they were still in the ‘Apple Sucks at Enterprise… we need to push secure blackberries as a solution, and treat all other BYOD as a “Threat”‘). This will resonate in the CxO’s ear.

  • Nigel Hietala

    Makes me think of the warning from the innovators dilemma about listening too much to the wrong types of customer. A lot of companies have sailed off a cliff listening to the demands of their enterprise users and the huge internal sales/support department that deals with them. Apple have now put a wall in the form of IBM between them and the enterprise. Allowing them to stay focused on what they do best, pleasing the consumer.

  • Bananaj

    This partnership makes perfect sense. Apple always wanted to partner with other organisations on services and other non-core competencies but Google and Microsoft decided they wanted to get involved in devices so they ruled themselves out of this type of partnership. IBM are working in areas where Apple is way behind Google (eg. AI) and so there is very little overlap and also potential for further collaboration (Watson being an obvious tech that Apple could take to the consumer)

  • Karl Klept

    IBM/Apple changes everything. Most importantly it will stop BYOD dead in it’s tracks so companies will start buying expensive iPhones for their staff instead and sure IBM hasn’t done anything relevant in decades (win Jeopardy?) but this is still awesome and totally devastating to Google.

    • Kizedek

      May actually help Apple even more on BYOD front: if those companies that use IBM services are encouraged to buy iPhones for their staff through IBM, then at those companies which don’t use IBM services or don’t buy devices for their staff, those who do buy their own device will be even more confident about iPhones and iPads and so will their IT departments.

    • neutrino23

      BYOD was not a strategy, it was capitulation to the demands of those outside IT. There are good reasons for corporations to control the mobile devices their employees use while doing company business. IBM/Apple now give them the tools to do that.

  • handleym

    One thing no-one else seems to be saying:

    If IBM and Apple have been talking, I expect CPU design came up in the chats. Apple have done pretty well so far in their efforts, but as they move forward, if they can license relevant IP from IBM (for example NoC design, a NUCA design for their L3-cache, better memory controller algorithms, etc) that all helps them move even faster…

    (It’s easy to mock IBM’s CPU efforts, but the POWER CPUs are impressive devices. They’re optimized for something different from Intel’s target, which is why they’re not the single-threaded monsters that Intel ships, but there’s a lot of interesting technology in them. Much of this [especially that related to virtualization] is probably of no interest to Apple today, but there is definitely stuff there of interest today.

    Longer term, who knows what Apple’s plans are? Intel’s stumbling under the accumulated weight of thirty years of poor ideas added to their CPUs opens up interesting possibilities for a company that can move with agility because it’s happy to ditch the past.
    Apple will likely not be ready to ship an i7 equivalent, and thus a desktop replacement CPU, for at least 3 years, and that’s assuming they can maintain the aggressive pace they’ve kept up since the A4.

    BUT an interesting alternative would be for them to start shipping a server chip for use in their own server farms. Such a chip would be a way to prototype performance ideas for the future without the obsessive concern for power that marks a phone chip — basically split each problem into two halves rather than solve it in one go. It also doesn’t require that many units to ship before you’re coming out ahead given the cost of Xeons.

    There are obvious technical issues that have to be dealt with to make this vision reality, most obviously the addition/creation/invention of a vastly superior uncore to the AMBA-4 that the A7 uses. But that’s my point —- talk to IBM and you can get up to speed on that stuff a lot faster.

    The fact that Apple TODAY is not in the server business, and uses Intel desktop chips, doesn’t mean that things can’t be VERY different five years from now or ten years from now.

  • http://alienryderflex.com/ Darel Rex Finley

    Hmm.. Why does the Mac line start in ’75? And was IBM really on top until the mid-’90s? I thought they got marginalized by clones before the mid-’80s. Should Gateway be included? Maybe there’s something about this graph I don’t understand.

    • http://www.asymco.com Horace Dediu

      The Mac line is zero in 1975 and to 1984. I should remove the non-positive data.

      IBM was the top vendor. There were clones but the graph measures the performance of the top five individual PC companies. Gateway was not in the top 5.

  • Apple Heaven

    // not such a swift idea
    If IBM == “One big albatross around apple’s neck and crotch” { println (“wake up apple.”) }

    // prints wake up apple

    This wouldn’t even work if Mr. Jobs were still in office.

    This will be a godsend for google and Microsoft as apple diverts precious management attention to working with blithering idiots and distancing itself from the ultimate end customer.

    All these seemingly incremental decisions by the post jobs management accumulate into a big negative feedback loop slowly demolishing a company once awesomely focused on design, radical next big thing ideas and the end consumer.

    Adieu apple.

  • jbelkin

    Apple has never been that interested in enterprise/IT selling as it involves not just hand holding, ass-kissing and customization but also a path map – it’s just not in their nature/company culture. This seems perfect. Apple continues to hold its hardware cards close to the vest but clearly based on processor builds, it’s clear what should be available when and of course, it takes no super genius to know the upgrade path is yearly … in this scenario, IBM services the enterprise/It with customization to serve their specific needs – whether it’s a plug in wand or an IOS app. Apple keeps its hands clean by not favoring any client nor annoys them by NOT creating any customs products/software for them … IBM has something to do that is based on professional hardware and their strengths of customizing enterprise apps – Apple is happy to offload the service portion but continue to sell loads of hardware but also pick up itunes sales with each device in new hands.

    • Peter

      Close, but not quite true. Apple had (maybe still has – I’ve been out of that loop for a while) a Federal Sales group near Washington that dealt with the Government. Problem was that they could never get any support from folks in Cupertino. Apple at that time was very, very centrist.

      The other interesting possibility – not mentioned in the press release – is whether there will be any action with selling Macs as well. Since IBM is no longer in that business there is no conflict.

  • fstein

    Brilliant analysis. Adding. Some other items where Jobs prescience payed off.
    1) lean portfolio – easy to manage at exec to exec level; easy to train IBM support staff to deliver first rate support.
    2) commitment to quality and UX – From entry level sales to CEO, you feel grrreat about selling Apple products.
    3) vertical integration – creates much better ROI on developing iOS Apps.

    One more, the alliance gives Mac sales a chance where before IT ‘just said no.

  • Isaac

    I’m intrigued with the idea that this has been in the works for 2 years. There’s no telling what else has been going on behind the scenes. I wonder if Apple has been an IBM client for at least part of that time. Big advances with cloud kit make me wonder where the expertise for that came from. I’ve also wondered about how much of the operations back end is done completely in house. Global supply logistical software and the like doesn’t seem to have much to do with what we see from Apple. It’s hard to imagine the company that until recently had to shuffle engineers between iOS and OS X would be able to nail supply chain, inventory, logistics, etc software. All of this is exactly the kind of thing that IBM does. There’s no evidence but it does kind of make sense. What about other possible collaboration? We can also only dream of Apple being able to use Watson technology, can you imagine?

  • demodave

    “There is drama in this industry and this latest chapter has a plot twist which any poet would envy.”

    We could call this catharsis. Or detente. Or denouement. But I think perhaps climax is more appropriate. Someone just got their salad tossed.

    Sorry to be late to this one, but I’d forgotten that Disqus is still actually useful for something.

    Horace, I’m very eagerly awaiting your tear-down of Apple’s June Quarter report. Especially with respect to R&D.

  • desktop guy

    I think the author, and seemingly everyone else out there, is completely wrong about the supposed “death of the pc”. The recent sales fall coincided with the biggest world financial crisis in 70 years (2009). Followed a second recession in the biggest economy in the world (Europe 2012). This perfect storm coincided with introduction of a new game-player/web-viewer and all-round gadget, namely the tablet. Pre-recession PCs’, laptops’ and macs’ lives were eked to the max. Many people’s first purchase, which earlier would have been a PC/Mac, was instead a phone, then tablet. That added a year or two to the replacement cycle of their desktop/laptop. But finally that whole cycle is coming to an end (barring a catastrophic recession in China). Desktops/laptops must be replaced for all writers, older students, secretaries, photographers, scientists etc etc. Meanwhile the developing world market will continue to grow very quickly. My prediction is worldwide desktop and laptops sales will now start to gain steam again and eventually far outstrip previous highs. The replacement cycle is lengthening, as it is for cars, but the user base is growing.

    • Peter

      Nice theory but the chart contradicts it. HP’s peak, for example, was in 2010. Same for Acer. Toshiba was still growing until its exit in 2010.

      The villain was the iPad, introduced in 2010. That’s quite clear.

      The PC market will grow again, to be sure. But many tasks formerly performed by PCs have gone to tablets, and will never return.

  • obarthelemy

    If Apple’s control of the whole stack is so great in the consumer market, how can Apple+IBM’s layered approach to iDevices in Entreprise IT scenarios be that great ?

  • Adrian Reason

    The real question now is will Apple and IBM really go after Microsoft – with an Open BYOD alteranative to the MS desktop being moved to Azure… IBM leads the way in BYOD support, and they also have a leading Social Business suite – that includes Domino who’s next release IBM Claims will Support Open Mail clients , including Outlook. With MS Office available on the IPAD – Customers can move to BYOD safely/securely and pay for it out of the savings made on the expensive and legacy MS Enterprise License Agreement.