Apple and IBM: Is this the future of the workplace?

In a sign of the mobile era of computing, Apple and IBM are partnering with each other to market a series of mobile applications to the corporate world. 

By , Staff Writer

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    An Apple employee demonstrates the iPad Mini on Tuesday, Oct. 22, 2013, in San Francisco.
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Together with IBM, Apple is moving into the workplace. 

The two companies announced Tuesday an exclusive deal in which IBM will sell Apple products to enterprise clients starting this fall. The two companies have emphasized the mutual benefits of this partnership: IBM gains the Apple's cachet with consumer products; Apple gains IBM's expertise in such fields as security and big data. 

"It's a very natural partnership because Apple is the de facto winner in the consumer space," says Van Baker, lead Apple analyst with the technology research firm Gartner. "IBM is very well known for security and big-data analytics, and those are skills that Apple doesn't have. And the device design and application design for client devices is an expertise that Apple has that IBM doesn’t have."

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This deal is a far cry from the two companies' rivalry of 30 years ago, when Apple produced its famous "1984" commercial that portrayed IBM as Orwell's Big Brother, while Apple cast itself as the sleek, friendly personal computer. But times have changed. The personal computer revolution has given way to the mobile era. And both companies recognize the opportunity to expand into the enterprise market, building services and mobile applications marketed directly to corporations that can then be presented to them via devices like iPhones and iPads. 

Ultimately, IBM plans to release more than 100 apps targeting issues in industries such as retail, healthcare, banking, travel, transportation, and telecommunications this fall. 

"It's absolutely huge." Apple chief executive Tim Cook said of the partnership in a joint CNBC interview with IBM chief executive Virginia Rometty. "This is all about transforming enterprise. Reinventing the enterprise. Taking big-data analytics down to the fingertips of people so they can spend their time making complex decisions not running around and around getting data. " 

Neither Apple nor IBM has commented on financial terms of the deal. 

This partnership raises the question of how mobile competitors will fare in the corporate arena now that a heavyweight like Apple is entering the fray. For example, shares in Blackberry were down to $10.26 on the Nasdaq on Wednesday, a 9.2 percent decline. The Canadian telecommunications company has had some success in positioning itself as the mobile device of the work place, with its stock rising more than 50 percent in the past year. But investors seemed wary once news broke of the Apple-IBM partnership. 

"It is not a crushing blow at this early stage, but ‎it is a negative for BlackBerry," IDC analyst John Jackson told Reuters. "There can be little question that it is unwelcome, if not entirely unexpected news." 

Moreover, Apple's iOS mobile platform is already "far and away the most popular platform in enterprise," Mr. Baker notes. This deal, however, "will extend the confidence of enterprise in the iOS platform."

Still, Google's Android operating system is used on more devices worldwide than iOS. But this partnership may indicate a surge of iOS at the expense of Android, some analysts predict. 

“It makes it much harder to get serious consideration for Android in corporations,” Tim Bajarin, president of Creative Strategies, a technology research firm, told The New York Times. 

Both Apple and IBM envision that their partnership will re-imagine the way work gets done in the corporate world. In one example, Ms. Rometty described how the airline industry could benefit through mobile applications that can analyze big data to help pilots determine how much fuel is on board before the plane takes off. "This can save 10, 15 percent for an airline deployed widely," Rometty said. 

Apple and IBM have been in talks with each other about a potential partnership for the past two years, Baker says. 

Now, he says, the biggest challenge for the two companies will be to make good on their promise: "They’ve got to deliver on this set of apps to make it something that doesn’t already exist in the market."

Material from Reuters was used in this report. 

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