In a deal that will provide a new option for banks that provide mobile devices to their employees or let them use their own phones and tablets for work, Apple and IBM announced last night that they co-developing a set of enterprise mobile apps and services.
Many banks already provide employees with iPhones and iPads or let them use their own Apple devices for work. Deutsche Bank AG, for example, has given employees almost 20,000 iPhones. Barclays Bank has deployed at least 8,500 iPads to its U.K. employees.
IBM and Apple say they are co-developing more than 100 industry-specific enterprise solutions, to be called "IBM MobileFirst for iOS Solutions" including native iPhone and iPad apps. Industries they are targeting include retail, healthcare, banking, travel and transportation, telecommunications and insurance. The apps, the two companies say, will become available starting this fall and into 2015.
IBM will also provide cloud services for Apple's iOS operating system, including device management, security, analytics and mobile integration. IBM will also provide service and support to Apple devices within companies, in a program called AppleCare. IBM will also support device activation, supply and management. (IBM already offers enterprise mobility management software called MaaS360.
The two companies are putting aside a rivalry started at the dawn of the personal-computing era to get more businesses to embrace iPhones and iPads.
The deal unveiled yesterday gives Apple access to an IBM sales force that will recommend Apple's devices to customers in industries such as health care and banking, which have never been priorities for the consumer-focused iPhone maker. IBM gets a boost in a long-running effort to sell software and services to companies seeking to manage workers' smartphones and tablets.
"We really recognized almost simultaneously that we could be uniquely helpful to one another's strategy and that there was literally no overlap," Bridget Van Kralingen, IBM's senior vice president of global business services, said in an interview.
The partnership helps Apple pursue a bigger slice of the market for corporate users of wireless devices. While many businesses allow the use of iPhones and iPads for checking e- mail and other tasks, some longtime users of PCs running Microsoft Corp.'s Windows software have remained reluctant to adopt its gadgets.
For Armonk, New York-based IBM, the alliance may aid the company's efforts to catch up after watching other technology companies including Apple seize upon the growing popularity of mobile devices.
"They're now strongly associated with the premium mobile platform and mobile devices," Frank Gillett, an analyst at Forrester Research Inc., said of Apple. "If you want to do anything interesting in the enterprise, you now have to check with IBM on what they're doing with Apple."
Enterprise Clout
"This is a shot in the arm for IBM and a great validation of Apple in the enterprise space, where they already are a huge success," Aaron Levie, chief executive officer of cloud-storage company Box Inc., said in an interview.
IBM shares rose 2 percent to $192.28 in extended trading after the pact was announced. The company is scheduled to report earnings tomorrow. Apple, which reports quarterly results on July 22, climbed 1.6 percent to $96.80.
Apple and rival Samsung Electronics Co. are seeking to further displace BlackBerry Ltd., which once held a strong grip on the corporate market. Shares of BlackBerry fell 4.2 percent to $10.83 in late trading after Apple's deal with IBM was announced.
Surprising Alliance?
The partnership announced with a press release that included a picture of Apple Chief Executive Officer Tim Cook and IBM CEO Ginni Rometty walking together at Apple's headquarters in Cupertino, California would be surprising to those following the companies three decades ago.
IBM and Apple were bitter rivals during the early days of the PC. Apple's famous "1984" Super Bowl television commercial to introduce the Macintosh computer compared IBM to George Orwell's totalitarian Big Brother. The competition eased as IBM abandoned the PC business and instead focused on software and services geared for corporate clients.
Cook also worked at IBM for more than a decade before joining Apple.
While the companies' agreement targets business customers, it puts IBM back in the position of selling consumer products something the company left behind in 2005 with the sale of its PC unit to Lenovo Group Ltd.
Mobile Expansion
A key element of the Apple-IBM deal is developing mobile-centric software tools for businesses. While smartphones have become ubiquitous, in business they are primarily used for checking e-mail or calendars. That's expanding to include more sales functions and day-to-day work flow, like getting approvals needed from a manager, said Jeffrey Hammond, another analyst at Forrester.
Apple and IBM said they will build more than 100 industry- specific applications for the iPhone and iPad, as well as tools for managing functions on the devices such as activations, security and analytics.
Reshaping IBM
IBM, meanwhile, has identified mobile as one of the company's biggest opportunities since before Rometty stepped into the role of CEO two years ago. She is seeking to reshape IBM with services such as data analytics to boost revenue growth after eight straight quarters of declines.
The company is contending with technology customers that are increasingly seeking to store data and software on cloud- computing networks, rather than on-site, limiting clients' need for IBM's servers and mainframes.
The potential financial impact for IBM will hinge on whether the applications are sold and if customers find value in them, said Daryl Plummer, an analyst at Gartner Inc.
"Revenue-wise, it's going to be hit or miss," he said. "It depends on what they commercialize I can't say it's a jump-start yet."
With assistance from Serena Saitto and Caitlin McCabe in New York.
