With the IBM Deal, Tim Cook Takes Apple Where Steve Jobs Never Could

Three Fools take to the Internet to discuss the the Mac maker’s deal with Blue, and what it means for both stocks.

Jul 24, 2014 at 9:00AM

When Steve Jobs advised Tim Cook to "just do what's right" as CEO of Apple (NASDAQ:AAPL), he had to know that could mean taking the company in a new direction. Last week brought just that sort of change when Cook inked a deal with International Business Machines (NYSE:IBM) to bring 100 enterprise-class business apps to iPhones and iPads.

Should investors like the move? Guest host Alison Southwick puts this question to Fool analysts Nathan Alderman and Tim Beyers in this week's episode of 1-Up On Wall Street, The Motley Fool's web show in which we talk about the big-money names behind your favorite technology, movies, toys, video games, comics, and more.

Cook and IBM chief Ginni Rometty didn't offer much in the way of specifics. Rather, in announcing the deal, they focused on the long term implications of the tie-up.

"For the first time ever we're putting IBM's renowned big data analytics at iOS users' fingertips, which opens up a large market opportunity for Apple. This is a radical step for enterprise and something that only Apple and IBM can deliver," Cook said in a press release announcing the deal.

How they'll manifest that grand vision isn't yet clear. All we know for sure is that Apple and IBM plan to build software "from the ground up" for addressing the needs of specific industries. Tim says thats a boon for IBM, which gets the bulk of its revenue and cash flow from multi-year services contracts involving dozens of consultants using a wide range of tailored technology. Now they'll have the iPhone and iPad to add to their arsenals.

As impressive as those numbers are, Nathan says it's a fair bet that Jobs' ego wouldn't have allowed him to make a deal with an old enemy. That Cook went ahead in spite of history proves that he won't let tradition drive strategy. Over the long term, that's likely to be good for Apple investors.

Now it's your turn to weigh in. How do you rate this deal? Is it a win for Apple, IBM, or both? Click the video to watch as Alison puts Nathan and Tim on the spot, and then leave your take in the comments box below. You can also follow us on Twitter for more segments and regular geek news updates!

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Alison Southwick has no position in any stocks mentioned. Nathan Alderman owns shares of Apple. Tim Beyers owns shares of Apple and International Business Machines. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple 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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