IBM and Apple deal

What a surprise! IBM and Apple have announced that they are working together. Who’d have thought it? Would it have happened under Steve Jobs leadership? Will it work? The two companies are planning to co-develop business-centric apps for the iPhone and iPad. And IBM is going to sell Apple’s mobile devices pre-installed with the new software to its business clients.

People are suggesting that IBM now has special access rights to certain security features on the devices and that other companies don’t have that kind of access. As a consequence, IBM can supply apps and services that are similar in behaviour to what users of Microsoft devices would expect. What hasn’t been made clear is what the financial arrangements are and what apps are going to be produced.

It seems that the deal is one that favours Apple. After all, they have a smaller part of the smartphone and tablet market worldwide than Android. According to IDC, Android will have about 60 percent of the smartphone market and Apple less than 20 percent. And Gartner are suggesting that Android has over 60 percent of the tablet market with Apple shrinking year-on-year with about 30 percent. And, after all the things Apple have said over the years, it seems an unlikely combination.

Maybe mainframe users will choose to use an Apple tablet and boost the flagging Apple sales that way. It seems hardly likely that a tablet user will rush out and buy a mainframe! Hence my conclusion that the relationship is very asymmetrical and favours Apple hugely more than IBM. Or, thinking the unthinkable (again), is Big Blue looking to take over Apple at some stage in the future – feeling that it can provide customers with an alternative to Microsoft and Android?

Or, perhaps, IBM looked in the mirror and saw itself 50 years ago, being able to dictate what software ran on its hardware and generally disregarding what every other company was doing as it stood in powerful isolation. And we know how that turns out.

I could make a prediction here that in three years’ time Apple will be a division of IBM. I could make a prediction, but predictions are notoriously unreliable. For example, Steve Ballmer, writing in USA Today, 30 April 2007, said: “There’s no chance that the iPhone is going to get any significant market share”. Or Thomas Watson, chairman of IBM, who in 1943 said: “I think there is a world market for maybe five computers”

There are more of these unfortunate predictions. Ken Olson, president, chairman, and founder of Digital Equipment Corp in 1977 said: “There is no reason anyone would want a computer in their home”. Or Bill Gates, who in 1981 is meant to have said: “640K ought to be enough for anybody” – although that one probably isn’t true.

Robert Metcalfe, the inventor of Ethernet, writing in InfoWorld magazine in December 1995 said; “I predict the Internet will soon go spectacularly supernova and in 1996 catastrophically collapse”. An engineer at the Advanced Computing Systems Division of IBM, in 1968, said about the microchip: “But what...is it good for?” Or the editor in charge of business books for Prentice Hall said in 1957: “I have travelled the length and breadth of this country and talked with the best people, and I can assure you that data processing is a fad that won’t last out the year”.

These are predictions that are right up there with H M Warner of Warner Brothers in 1927 saying: “Who the hell wants to hear actors talk?” Or Decca Recording Co rejecting the Beatles in 1962 by saying: “We don’t like their sound, and guitar music is on the way out”. And, of course, journalist Stewart Alsop Jr back in 1991, predicting that the last mainframe would be unplugged by 15 March 1996.

Best not to make predictions, or at least not to publish them, don’t you think? But are we looking at Apple’s last days as an independent company?