Big Blue Is Watching You, Apple

It's official: Mark Papermaster will get to work for Apple (Nasdaq: AAPL  ) after all.

Earlier this week, IBM (NYSE: IBM  ) and Apple settled a contract dispute that had prevented Papermaster from joining the iEmpire as its lead hardware designer for the iPod and iPhone.

At issue was Papermaster's expertise. He'd spent years working on the PowerPC architecture that, prior to a blockbuster deal with Intel (Nasdaq: INTC  ) , had been the brains of Apple's Macs. PowerPC technology is also behind PA Semi's breakthrough chips. Apple acquired PA Semi in April of last year for $278 million.

IBM argued, successfully, that Apple's proclivity to take control of the guts of its devices made it a competitor, putting Papermaster in violation of his contract. Papermaster had agreed not to join a rival for at least one year after leaving Big Blue.

This week's settlement invalidates that restriction. Mostly, anyway. Papermaster gets to join Apple on April 24, six months after leaving IBM, but Big Blue gets to look over Papermaster's shoulder. He'll make two scheduled court certifications -- once in July and another in October -- to testify that he's keeping IBM's trade secrets to himself. Talk about paranoid.

Perhaps it's justified. Perhaps IBM plans to challenge Intel and ARM Holdings (Nasdaq: ARMH  ) with a new low-power chip for mobile devices based on the Power Architecture. If so ... fair enough. Apple and Papermaster appear to have similar designs.

Big Blue is looking over Apple's shoulder. Nokia (NYSE: NOK  ) and Research In Motion (Nasdaq: RIMM  ) may want to pay attention, too.

More Apple Foolishness falling from the tree:

Apple is a Stock Advisor selection. Intel and Nokia are Inside Value picks. The Fool owns shares and covered calls of Intel. Try any of these Foolish services free for 30 days. There's no obligation to subscribe.

Fool contributor Tim Beyers had stock and options positions in Apple and stock positions in IBM and Nokia at the time of publication.

Check out Tim's portfolio holdings and Foolish writings, or connect with him on Twitter as @milehighfool. The Motley Fool is also on Twitter as @TheMotleyFool. Its disclosure policy is too tired to offer anything witty at the moment. (Yawwwwwnnnnnnn.)


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