David Briddock investigates why Apple is partnering with a company it depicted as the enemy in 1984
Right from the early days of personal computing, Apple CEO Steve Jobs saw IBM as the enemy. A company out to dominate the entire computer industry. The company that would crush technological freedom and innovation.
Jobs decided he needed a campaign to convince people to reject the bland, grey world of IBM and instead purchase Apple hardware and software.
Nothing exemplified this campaign more than Apple's vitriolic 1984 advert. Shown during the Super Bowl XVIII match, the imagery it portrayed was an allusion to George Orwell's classic novel Nineteen Eighty-Four (goo.gl/xfcqpP).
The novel described a Big Brother controlled dystopian future, and the advert suggested Big Brother was none other than IBM. In fact the parallels, with the 1984 novel were so obvious that the estate of George Orwell considered it to be a copyright infringement and promptly sent a cease-and-desist letter to Apple.
Nevertheless, it has been frequently described as a masterpiece of advertising and is now considered to be one of the world's greatest ever commercials.
Siding With The Enemy
But today these two giants are not just talking to each other but striking up a business partnership. The obvious questions are why is this happening now, what's the end goal, and what are the partnership details?
Change at the top of Apple is one reason. Over 30 years after that infamous commercial, Steve Jobs's long-time confidant and successor Tim Cook has buried the hatchet. Without the historical baggage, Cook is open to new ideas and new partnerships, including with IBM.
Apple is always vigilant about maintaining its market share. Look closely and you'll find a few disconcerting details in Apple's overall rosy accounting figures. In particular, recent trends point to a dramatic decline in tablet sales.
These days, many consumers see no reason to upgrade their tablet, or opt instead for an equally capable and cheaper Android-powered alternative. Others are abandoning the format altogether and instead investing in a more powerful and flexible touch-screen laptop or 2-in-1 device.
Most importantly, Apple has so far failed to conquer the business marketplace to any significant degree. A deal with IBM is all about securing business backing for its mobile devices, before it's too late.
What Apple Wants
Apple is looked upon as the consumer champion. Its range of high-quality products are always in demand, despite large profit margins. Every new product launch generates massive worldwide media interest, and even updates to existing products can make the news headlines.
Other consumer-focused successes include the iTunes Music Store and Apple's popular cloud storage facilities, known as the iCIoud. In short, Apple seems to be doing just fine without this new business endeavour.
However, to grow as a company, Apple needs to win over more business customers. In particular, it desperately wants to penetrate Fortune 500 level organisations with its technology.
And this is where partnering with IBM starts to make sense. Apple realised it can't achieve this goal on its own, yet a strategic partnership offers the opportunity for a quick win.
Why IBM?
What does a company like International Business Machines (IBM), with roots that go back to the 1880s, have to offer Apple? IBM has always had a business-centric heart. It developed punched card systems for analysis of the 1900 US Census plus general time recording and accounting. This means it has decades of enterprise expertise and equally long-term business partnerships.
And IBM also has a huge pool of highly trained, highly experienced employees (around 400,000 against Apple's 100,000), many with strong commercial sales and marketing capabilities.
IBM's decision to sell off its hardware divisions was a great success. Profits soared on the back of its new business-focused, services-led model, but more recently it's been a different story. IBM is in a financial hole and has started trimming costs, including tens of thousands of jobs around the globe. Today, it desperately needs something to drive profits, raise its technology profile and bolster its share price.
Mobility Target
As for targets, both companies want a bigger slice of the mobility pie. Consequently, this coalition aims to target a number of vertical marketplaces, such as healthcare (think Apple Watch here), financial services, telcos, transportation and many others.
IBM has thousands of consultants who know the mobility business inside and out. Yet so far it's been an embryonic and low-key affair. A partnership would significantly raise its mobile-centric profile. Apple will continue to concentrate on design and hardware. Meanwhile, IBM intends to head up the customer-facing enterprise sales and handle the vitally important after-sales care.
As IBM hasn't built a PC or mobile device for around a decade, there are no concerns for Apple that it will suddenly become a competitor in the hardware marketplace. Instead it's all about Apple's iPhones and iPads - strategy that's helped by the modern 'bring your own device to work' trend that many organisations are adopting.
Into The Details
An announcement of the deal came in the second half of 2014. Of course, talks must have been taking place for some considerable time before this. Yet hard facts and substantiated details of how this partnership will work are still thin on the ground. Here's what we know so far.
The key driver is to tap into the enterprise arena by integrating Apple products, pre-loaded with IBM software, into the business technology workflow. This means IBM can supply, activate and deliver mobile device management (MDM) services for iPhones and iPads and the new Apple Watch. Plus there are rumours of a larger iPad tablet with a digital stylus.
IBM will sell pre-configured Apple devices with organisation-specific apps, security features and policies. It's a much better solution than working with a bunch of vendors who each provide only a single service, such as a phone/tablet, a specific app or only MDM provision.
Of course, IBM will benefit from the Apple branding phenomenon. Meanwhile, it's an opportunity to bring its analytics and data platforms, technologies and services to Apple users, who are employed in healthcare, telecommunications, finance and many other vertical business sectors.
How many new customers could an IBM-Apple partnership attract? Well, some analysts suggest figures as high as 42 million. That's an awful lot of iPhone and iPads sales, and let's not forget the app marketplace.
Business App Scenarios
While Apple hardware is a critical part of the partnership picture, apps are another way these companies can help each other. Apple and IBM already have plans to launch more than 100 exclusive industry-focused apps. The first apps should appear later this year, although it's expected many will only see the light of day in 2016. It seems the bulk of these apps are designed and built for Apple iPads, but there are some iPhone apps too.
IBM is certainly involved in app development. However, it will limit its scope to business-specific, custom-built scenarios and not generic App Store ones. In this way IBM would become a kind of Apple Store for enterprises.
The IBM MobileFirst strategy delivers faster and simpler transactions between companies and their customers. This can be achieved with custom-built iPhones and iPads apps that use existing Apple technologies, like the M8 coprocessor chip and iBeacons (see below).
A typical example would be at airports. A quick scan of the boarding pass would reveal which terminal the traveller needed to go to, by what time and the directions on how to get there.
IBM will supplement this app strategy with its own technology in the form of big data, visual analytics and software services, and this is where IBM's infamous Watson technology (see below) may come in.
As you'd expect, Apple will undertake the support of its devices and its system software. However, it's IBM's responsibility to handle issues surrounding any custom-built apps. IBM will certainly have enough people to sort out these app issues, but the quality of service it will ultimately provide is as yet untested.
Government contracts could be rather more problematic, as Apple is unlikely to offer too many concessions. Even so, iOS already has some government certification. Being FIPS 140-2 compliant means it's already suitable for low-level security classifications, and it has also received the STIG certification necessary for the US Department of Defense.
Watson Health
IBM already has its Watson Health initiative, which makes sense of the mass of data created by the growing numbers of medical and fitness tracker devices and associated apps. The goal is to provide diagnostic assistance and health alerts for doctors, carers or insurers.
In official statements IBM said it would be, "a secure, cloud-based data sharing hub", which can provide "individualised insights and a more complete picture of the many factors that can affect people's health", and it went on to insist that no data would be captured without the user's permission.
IBM is keen to partner with Apple in offering Watson Health services to employees across the US. Enticed by the latest Apple devices and possibly lifestyle incentives too, this marketplace could be a golden opportunity for both companies.
Speed is all important, and IBM is looking to buy companies like Explorys (explorys.com), which has one of the largest healthcare databases in the world, and digital medical record systems expert Phytel (phytel.com).
Privacy Concerns
Increasingly, employers are seeking to learn more about their employees' health, activities and lifestyle. They say it will help them deliver a better working environment for everyone.
Apple's ResearchKit, which gathers health data from iPhones, has already been used to develop apps that study asthma, breast cancer, cardiovascular disease, diabetes and Parkinson's disease. In a recent announcement, it said that Apple's ResearchKit software is now available to anyone.
As of April this year, Apple Watch data can be added to the mix, but it's not just Apple. Companies like Jawbone (jawbone.com), which sells a range of fitness trackers, are already talking to firms about how personal fitness trackers could be used to monitor a workforce.
Maybe you're thinking this sounds uncannily like the Big Brother scenario Apple was so keen to fight against in 1984, and you'd be right. There are big concerns over the sharing of health data, especially as this data may find its way to insurers and health professionals, and the US Federal Trade Commission even found some iOS apps that claim to diagnose cancer.
It's clear we employees need strong controls and possibly new legislation, before it's too late.
Fight For Rights
The rights of the employee should always be upheld. Data capture consent must be freely given. There should be no penalty imposed by the employer if the answer is 'no', and anyone should have the right to withdraw previously given consent at any time.
Unfortunately, this type of consent is likely to be asked at the recruitment stage, so there's a concern that saying 'no' to data collection might count against the candidate when it comes to decision time.
Of course, there could be some sweetening of the proposition - for example, free devices or a set of incentivising rewards for programme participation, but only for those who wear the official data-tracked personal health and fitness devices.
Under Surveillance
In a way, intrusive levels of personal surveillance are nothing new. It's something we often voluntarily sign up for to get the latest services, apps or devices. Google has been doing it for years, at least from the online perspective. Every search you make and every subsequent site you visit is captured and stored away, and it scans every image and document you store on Google Drive.
Amazon too monitors your product browsing history in addition to your actual purchases, and if you own a Kindle it knows which books you own, which pages you've read, the passages you've re-read, sections you've highlighted and where you placed your bookmarks.
Microsoft is also after personalisation data. When Windows 10 rolls out later this year it can capture just about every action you take and voice command you utter.
But all these are far less invasive than the data that emanates from a band that's worn 24 hours a day. A band that's able to monitor your activity, inactivity and sleep patterns. Data that can be analysed to access your day-to-day health, but also indicate fitness levels, calorific intake, mood swings, stress levels, stroke/heart attack risks and so on.
There's no doubt medical science, healthcare and individuals will benefit from all this intelligence. Nevertheless, it sounds uncomfortably close to the Big Brother regime in George Orwell's novel.
The Watson Question
One of the few bright spots for IBM in recent years is its Watson technology (goo.gl/HKwPba). Watson's winning appearance in 2011 on the US Jeopardy gameshow boosted IBM's profile as a leading player in the machine learning technology arena.
But Watson is capable of far more than playing games. Its machine intelligence algorithms can analyse vast amounts of data from just about any field you care to mention and, of course, that includes medical and health data.
Today, Watson is used by hundreds of clients and partners across 25 countries, helping businesses interact and engage with their customers, accelerating scientific discovery and revolutionising how medicine is taught, researched, practised and funded.
In early 2014, IBM announced a $1 billion investment to establish a new Watson Group. This included $100 million of venture investment funding to support start-ups, which can now build a new generation of cognitive intelligence apps with the Watson Developer Cloud and an associated API.
So Watson technology could be yet another factor in an Apple-IBM partnership.
Apple’s iBeacon
An extension to the existing iOS 7 or 8 Location Services feature, iBeacon is a low-power low-cost transmitter that sends out notifications to iOS 7 and 8 devices in the proximity.
In operation, certain iPhone/iPad apps receive alerts as you approach or leave an iBeacon location. These apps can then inform the mobile device owner of nearby sale items and even special of-the-moment offers.
iBeacon wireless technology is based on the Bluetooth Low Energy (BLE) signal, which is also known as Bluetooth Smart. The iBeacons units themselves come in a variety of form factors, including USB sticks and self-contained Bluetooth 4.0 USB dongles.