Will Apple's alliance with IBM save the iPad?


Facing the second consecutive quarter of declining iPad sales, CEO Tim Cook is betting that Apple's alliance with IBM will stanch the bleeding by opening up the enterprise channel to more iPad purchases.

IPad sales were down 9.2 percent year-over-year in the most recent quarter [.pdf], after falling 16 percent year-over-year in the previous quarter.

"We think there is a substantial upside in business, and this was ... the thinking behind the partnership with IBM that we announced last week," Cook was quoted by CRN as saying during the Q-and-A portion of this week's earnings call.

"We think that the core thing that unleashes this is a better go-to-market, which IBM clearly brings to the table, but even more importantly, apps that are written with mobile first in mind," Cook added.

As part of the alliance, IBM will write more than 100 enterprise-specific apps for the iPad and iPhone; IBM cloud services will be optimized for iOS, including device management, security analytics and mobile integration; AppleCare services and support will focus more on enterprise users; and IBM will offer iOS device activation, supply and management.

On the whole, analysts have reacted favorably to the partnership news. "I do believe Apple can leverage IBM's channel," Cantor Fitzgerald analyst Brian White told Reuters.

It is "logical" for IBM to partner with Apple since iOS is "becoming such an important part of the enterprise app landscape," says Jack Gold, founder and principal analyst with J. Gold Associates.

"Apple gets a co-selling opportunity and more importantly IBM to back them up in support services for the enterprise, an area Apple is weak in," Gold said in an email sent to FierceMobileIT.

"We believe that stronger commercial demand for tablets in the second half of 2014 will help the market grow and that we will see more enterprise-specific offerings, as illustrated by the Apple and IBM partnership, come to market," says Jean Philippe Bouchard, IDC research director for tablets.

Apple's benign neglect of the enterprise market might be over. The company was happy to let the average employee bring personal iOS devices into the workplace and reap the benefits. But now that this hands-off approach is no longer working, Cupertino has decided to bring in the big guns of an enterprise IT icon to specifically target enterprise users.

For more:
- see Apple's financial results [.pdf]
- read the CRN story
- check out the Reuters report
- see the IDC release
- check out the Apple-IBM release

Related Articles:
IBM, Apple team on enterprise mobility
What the Apple-IBM deal means for the CIO
Wall Street expects good things from Apple

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