Does Apple (Nasdaq: AAPL ) compete with IBM (NYSE: IBM ) ? Big Blue thinks so.
"Electronic devices large and small are powered by the same type of intelligence, the microprocessor," IBM argued last week in a lawsuit designed to prevent former employee Mark Papermaster from joining the iEmpire as its new lead engineer for the iPod and iPhone product lines.
Papermaster had been on IBM's payroll for 25 years. His departure was conditioned upon not joining a competitor for at least one year. Apple qualifies, according to Big Blue's lawyers. And, apparently, to the judge who ordered Papermaster to cease work till further notice. But are these two really rivals?
Not unless you buy IBM's argument that it competes with, well, everyone in the business of producing electronic devices. I think we'd be better served by dealing in specifics. Apple battles Research In Motion (Nasdaq: RIMM ) in mobile, Microsoft (Nasdaq: MSFT ) in operating systems, and Amazon.com (Nasdaq: AMZN ) in digital entertainment. IBM, by contrast, is fighting a three-front war versus Dell (Nasdaq: DELL ) in servers, Oracle (Nasdaq: ORCL ) in infrastructure software, and Infosys in professional services. So in my opinion, either:
- IBM plans to introduce an alternative to the iPod or iPhone, or
- Big Blue doesn't want to set a bad precedent.
By "bad precedent" I'm referring to Papermaster's agreement. Non-compete arrangements are essential in industries such as the high-tech field, where innovation rules the day. So while Papermaster's lawyers said that Apple offered him an "once-in-a-lifetime 'dream job,’" IBM has every right to defend its intellectual property -- even if it has to make a silly claim to do so.
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