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IBM & Apple: the New Mobile App Team



One of Apples new products the iWatch, does much more than tell time.

One of Apples new products the iWatch, does much more than tell time.

One of Apples new products the iWatch, does much more than tell time.

The once competitors, Apple and IBM, are teaming up in a strategy to try to increase the sales of iPhones and iPads to government agencies and corporate customers.  On Tuesday, July 15th, the partnership was announced; the plan is for the two technology companies to combine resources to work on about 100 separate mobile applications for a broad spectrum of industries.

The releases of the applications are expected for this fall. The applications will feature some of IBM Corp.’s data-crunching tools, created for companies aiming to get a better hold on their main markets while looking for opportunities to make money in new markets. More and more people are working less on their desktop and laptop computers, and instead using mobile devices. However, companies are concerned with the security of important information on such devices and the ability of hackers to steal it. IBM has sworn to supply companies with a higher grade of security that can put such fears at ease.

CEO of Apple Inc. Tim Cook explained the benefits of working with IBM; while apple knows how to satisfy consumers, IBM can show them how to better serve the requirements of corporate customers. On the other hand, IBM will be able to expand the clientele for its technological tools, reasoned IBM CEO Ginni Rometty. IBM has invested around $24 billion into data analytics, and a broader audience will help increase IBM’s return on this investment.

During an interview Tuesday at Apple’s Cupertino, California headquarters, Cook said, “It’s a watershed partnership that brings together the best of Apple and the best of IBM.” Rometty traveled to join Cook for the announcement, flying from IBM’s headquarters in Amonk, New York; this emphasized the significance of the alliance between the two companies. “This is about two powerhouses unleashing the power of mobility for (businesses),” Rometty said. “This is going to remake professions and industries.”

The goal is make an all encompassing business serving mobile applications, which bring iPhones and iPads beyond the mere purposes of email checking and appointment planning. According to Cook, mobile devices are already being used in most Fortune 500 companies, and the combine forces of IBM and Apple will allow them to dominate the market.

The companies are both counting on the partnership to uplift their own revenue. Apple and IBM have faced recent concerns on Wall Street over whether the value of their stocks will be able to escalate at the rate at which revenue has been growing.

Apple’s anxiety about their future have been partially alleviated by the widespread excitement over this coming fall’s release of the newest iPhone with a larger display screen, as well as the highly anticipated smart watch that tracks people’s health through sensors on the device.

Apple as gown through some steep changes; their stock reached lows in 2013, and is now about to hit a record high. On Tuesday, the 15th, Apple’s shares fell $1.13, closing at $95.32, this is 5 percent below their split-adjusted peak of $100.72. The same day, IBM closed at $188.49 after a $1.37 fall; this is approximately 13 percent down from its high of $215.90.

The advances in technology can completely rearrange alliances, and this new cooperation between IBM and Apple is a perfect example of this rearrangement. In the 1980s and 1990s, the idea of the two companies working together would be unimaginable; they were rancorous rivals in the market for personal computers. Relations were so spiteful that Apple criticized IBM as soulless and incapable of generating new ideas, in a famous commercial that used images of the “Big Brother” figure from George Orwell’s novel, “1984”.

As technology evolved and the companies took different directions, old animosities died out. IBM sold its PC division to the Lenovo Group, taken them out of that market about a decade ago. Apple also makes less money from its Mac computers and far more from iPhones now. Cook commented on the old war between Apple and IBM, saying, “That was a long time ago. This is two pieces of a puzzle that fit together perfectly.”

Cook’s predecessor, Apple’s late co-founder Steve Jobs, did little to hide his contempt for IBM, but longtime Apple analyst Tim Bajarin of Creative Strategies is sure that Tuesday’s announced alliance would have been supported by Jobs as another step away from the times when computer technology was dominated by IBM’s mainframe. Bajarin said, “Steve would have loved this. It shows that the post-PC era is in full swing now.”

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