The Huge Implications Behind Apple, Inc.'s New Partnership

Who would have ever guessed Apple and this old competitor would someday forge a strategic partnership? But sure enough, the day has come.

Jul 16, 2014 at 2:00PM

Who would have ever guessed Apple (NASDAQ:AAPL) and Big Blue would someday forge a strategic partnership to build a solution for millions of people? But sure enough, it just happened. Overnight, Apple just acquired a massive ally.

Equipped with its 15,000 analytics consultants, 4,000 analytics patents, 6,000 industry solution business partners, and 400 mathematicians, IBM (NYSE:IBM) has forged a partnership with Apple to "transform enterprise mobility." The implications for both companies are huge.

Ibm Apple Partnership

IBM CEO Virginia Rometty and Apple CEO Tim Cook. Image source: IBM

The intention in this new partnership is to take the strengths of both companies to offer an unparalleled mobile enterprise solution. The partnership is packed with substance. Consider some of these key initiatives to the new partnership.

Tapping into Apple's iPhone and iPad, IBM is developing "a new class of more than 100 industry-specific enterprise solutions including native apps, developed exclusively from the ground up, for iPhone and iPad." The partnership will also introduce iOS optimized IBM cloud solutions, an enterprise-specific AppleCare service, and a new system that makes it easier for IBM to activate, supply, and manage iOS devices for enterprise clients.

It's a win/win
For IBM, the biggest advantage in this partnership is in going all out on the solution that Fortune companies were already using for mobile needs. Of the Fortune 500, 98% are already using iOS in their business. Ninety two percent of the Global 500 use iOS devices. Building a better enterprise mobile solution customized for iOS devices, therefore, will give IBM a distinct advantage over its corporate analytic solutions competitors by tapping into Apple's unprecedented and growing mobile enterprise user base.

Apple gains two major advantages.

First and foremost, this gives Apple an advantage over Google's Android and other mobile operating systems as an enterprise solution for large companies. IBM is a leader in enterprise analytics, cloud, software, and services -- the best ally Apple could have in its efforts to building enterprise solutions. Together, the two companies will be able to offer a more complete solution than competing mobile operating systems.

Second, Apple has just tapped into key distribution for its iPhone and iPads, the tech giant's two largest segments. Perhaps the most important line in Apple's press release announcing the deal was this: "As part of the exclusive IBM MobileFirst for iOS agreement, IBM will also sell iPhones and iPads with the industry-specific solutions to business clients worldwide." IBM will be able to sell, activate, and supply iOS devices directly to clients. Given the scale of IBM's reach in the corporate world, this is among the largest iOS device distribution channel Apple has ever tapped into.


iPhone 5s. Image source: Apple

Best of all, the advantages gained for both companies have more than near-term implications. IBM will be able to better meet the needs of its business clients and deepen relationships with them by finally tapping into the mobile operating system the enterprise world has became so attached to: iOS. Apple will become more entrenched in the corporate environment where the switching costs related to jumping from one OS to another are high.

This small company may win big on Apple's next big product launch
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Daniel Sparks owns shares of Apple. The Motley Fool recommends Apple, Google (A shares), and Google (C shares). The Motley Fool owns shares of Apple, Google (A shares), Google (C shares), and International Business Machines. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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