IBM iPads? Thinking Different …

apple1984videoipad

Apple and IBM join forces to sell iPads. Does anyone remember Kaleida. Back to the future we go. Analysis, plus the historic 1984 Apple TV commercial.

aNewDomain.net – “Somebody at IBM a few years ago saw our NextStep operating system as a potential diamond to solve their biggest and most profound problem, that of adding value to their computers with unique software.” – Steve Jobs, 1991.steve-jobs-youtube

What’s odd about the Steve Jobs comment above is that you could almost reverse the companies to make it true today. At least according to current Apple CEO Tim Cook.

Forgotten after the Apple iPhone 6release and the Apple iOS8 fiasco is Apple’s announcement  of a partnership with IBM “to transform enterprise mobility through a new class of business apps.”

“For the first time ever we’re putting IBM’s renowned big data analytics at iOS users’ fingertips, which opens up a large market opportunity for Apple,” Cook said in a statement, never reminding anyone about the failed 1990s era Apple-IBM joint venture, Kaleida.

But now Apple is specifically  targeting retail, healthcare, banking, travel and transportation, telecommunications and insurance and the first wave of applications will become available starting this fall and into 2015.

Though sales of the Apple iPad are down in two consecutive quarters and the last quarter sales dropped nine percent, in a recent investor call Cook said he sees strong growth in the corporate sector where it has only 20 percent market penetration. That’s compared to 60 percent for notebook computers.

Wait. What?

Those numbers sound reversed. The Apple iPad has only a 20 percent market penetration in the corporate sector? Can that be true?  Not only did Apple find its way into the corporate sector with the iPhone and iPad, it practically is responsible for the bring-your-own-device (BYOD) trend in the last seven years. IT departments have scrambled to find ways to integrate Apple OS devices that were brought in by its employees. That’s what killed Blackberry. So how can Apple own just 20 percent of the corporate sector.

In fact in January, Apple CFO Peter Oppenheimer said that 98 percent of the Fortune 500 are using Apple’s tablet and 93 percent of the Global 500 are as well.

So when Cook talks about a 20 percent market penetration, he means iPads sold to the enterprise for employee use. That might be true, but employees are already using an iPad that they bought on their own. So there is no market except for the handful of employees who don’t use an iPad at work. And no one is going to carry around 2 iPads.

The better integration is to leverage employees’ existing iPads with new software and services built from the ground up for the enterprise. That’s the other half of the Apple partnership with IBM.

And that’s how IBM wins. Watson natural language search is a game changer in search. Google Search delivers thousands of good answers to a question but then you have to manually search again through pages and pages to hopefully get your answer.

Watson delivers one best answer and that’s what a real estate agent wants when he’s in front of a client who wants a “shady hideaway near the lake to start a family,” or a patient who reports to the local doctor that she’s “been sick ever since she came back from Montana in June.”

Combining the improving power of Siri and Watson on the next generation of iPads is a powerful tool for enterprise, but the smarter solution is to deliver them to existing employee iPhones, not iPads.

In fact iPhone sales were 13 percent higher than the same quarter last year and that is in spite of many customers waiting for the new iPhone with a 5.5 inch screen.

There are a lot of reasons experts cite declining sales in tablets. You can’t drop it in your pocket like an iPhone, and you can’t be as productive on a tablet as you can be with a laptop.

Also the Apple iPad is somewhat a victim of its own success. People are happy enough with the one they have and typically they don’t feel that regularly burning need to upgrade.

And the larger Apple iPhone will also cannibalize iPad sales because the new “phablet” will still be small enough for a pocket.

While the announcement might soothe investors who see the iPad finally plateauing, it won’t do anything to improve penetration of iPad in the enterprise, which is already deeply saturated with employees who use their own.

IBM was once the devil incarnate for Apple. The most famous television commercial in history – aired only once in the third quarter of the Superbowl – was Apple’s attack at an unnamed IBM future of groupthink.  Watch it below.


Video: Robert Cole YouTube Channel

For aNewDomain, I’m Dino Londis.

About the author

Joy Ma

Joy is executive editor at aNewDomain. Keywords for her are editorial and operations maven, writer. She has launched magazines, web sites and worked in manga and anime. Email her at joy@anewdomain.com.