TMT Blog: Foes become friends?

The recent announcement that Apple and IBM are to work together (yes, you read that right) in developing business-centric apps for iDevices has split opinion. For some, the move is a landmark and a turning point, symbolising an end to decades of rivalry between the two tech giants.

For those of you who remember Apple Computers Inc. back before they rebranded as the much cooler ‘Apple’, this rivalry culminated during the 1980s in the battle for the home computer market. In 1984, Apple went as far as to air a TV advert during the Superbowl which literally instructed viewers to throw out the dull, beige computer boxes of old (that would be IBM’s hardware) and bring home a shiny, new, colourful Macintosh instead. This was followed by a second, more disrespectful advert that depicted IBM users as brainwashed “Lemmings”.

So why is this alliance forming now? A number of ideas have been suggested to explain the timing. For Apple, it seems likely that the opportunity to woo the corporate customer and sell its products to a whole new market is incentive enough, especially at a time when iPad sales have stagnated. With 100,000 IBM sales staff on the case, opinion is divided on whether this will affect the bottom line, but it seems healthy enough an idea regardless.

What’s in it for IBM? Is the business simply looking to diversify its revenues even further? Does this allow IBM to provide a more creative solution to corporates? Or is it simply a warning to Google and its Android platform that together, Apple and IBM pose a serious threat to Android’s foothold in the corporate market?

Cynically, commentators are pointing out that the CEOs of both Apple and IBM have seen profits stagnate during their three-year tenure and are looking for a quick way to boost sales and make headlines.

As these devices become increasingly more powerful, it is clear that the platform (simply put the software infrastructure) is where the real engine and innovation will lie. This poses a risk to hardware revenue dependent players like Apple as customers will have less of a tie or ‘lock-in’ to their eco-systems. With the rate of new start-ups and players across the software/internet sector ever increasing, this may lead to these Goliath-sized machines battling with more and more Davids in the future.

Time will tell whether this alliance is successful, what the result will be, and whether or not its value can be quantified. However, this union does serve to remind us of a powerful lesson: no matter how large and successful you are, no one is above the market. As the ever-changing landscape of the digital and technological market ploughs on ahead, any business that fails to adapt can find itself left out at sea.