Don't Believe People Who Say Apple's New Deal With IBM Isn't Important - It's Huge
But maybe those investors should think again. IBM will devote about 100,000 staffers to its new enterprise deal with Apple in one function or another, according to Re/code.
Apple stock was at $96.99 this morning in pre-market trading, up just 1.75% following the news.
Piper Jaffray analyst Gene Munster led the chorus of shrugs at news of the pact: "In terms of the benefit to Apple, we do not expect the partnership to have a measurable impact on the model given that Apple has already achieved 98% iOS penetration with Fortune 500 companies and 92% penetration with Global 500 companies," he wrote in a note to investors:
[It] is unlikely to be the make or break factor for a large corporation in utilizing iOS. We note that if half of the Fortune 500 were to each purchase an incremental 2,000 iPhones and 1,000 iPads above what they were planning to purchase as a result of the IBM deal, it would mean about a half a percent to CY15 revenue.
Broadly, Jaffray's case is that because so many people already use iPhone and iPad for business Apple won't see very many incremental sales out of it. But here is an alternative set of stats from Citrix, the enterprise computing company.
iOS is on less than half of enterprise devices in some markets, and in its best market Android still commands one of every five mobile business devices. These numbers are from May:
Break it down by industry (below) and you can see that there are entire sectors - like oil and advertising - where Apple is MIA.
These are the potential growth areas for Apple as an enterprise device provider:
That's why this sentence from Re/code is so interesting: "IBM will also begin to sell iPhones and iPads to its corporate customers and will devote more than 100,000 people, including consultants and software developers, to the effort."
It's not just about pushing Apple products into businesses that do not yet have them. The reason "enterprise" - the cheesy jargon word tech people use to mean "business customers" - is such a big deal is that corporations tend to be slow and sticky. Once you sell a company on a new device, that company is probably locked in as a customer for years to come, through several device upgrade cycles and all sorts of software add-ons.
If you've ever worked for a company that has forced you to use the worst devices and software you've ever seen, and wondered why that's the case, this is the answer. It's not that your IT department is incompetent. It's that it is genuinely difficult to move thousands of employees off one computing platform and onto another.
With the IBM deal, Apple now has a way of approaching hundreds of companies that already buy stuff from IBM, and getting them to add more Apple products as they go along.
Potentially, that's massive - and it ought to terrify Google and its Android device makers like Samsung.
One reason BlackBerry was so popular back in the day was that it had a super-secure messaging system that also allowed employers to see what was being transmitted by their workers. Apple's iOS system is also super-secure - there is hardly any malware on iOS. So you can see how Apple might become the BlackBerry of the future. Not in the current sense, of course - BlackBerry is a disaster of a company at the moment. But certainly the BlackBerry of 2002 was a great business, and Apple may just have taken a step to recreate that business in years to come.