Neil Hughes
Apple's new enterprise partnership with IBM will likely strengthen the position of the iPhone and iPad in the corporate world, but it probably won't move the needle much in terms of overall device sales, investment firm Piper Jaffray believes.
Analyst Gene Munster's take on the new Apple-IBM partnership was declared in a note to investors on Wednesday, a copy of which was provided to AppleInsider. He noted that iOS devices are already being tested or deployed at 98 percent of Fortune 500 companies, and 92 percent of Global 500 corporations.
"We do not expect the IBM partnership to have a meaningful impact on Apple's financials overall primarily based on our belief that large corporations are already utilizing iPhones," Munster wrote. "We believe that IBM will add incremental functionality for corporate customers, but is unlikely to be the make or break factor for a large corporation in utilizing iOS."
In his view, Apple's new deal with IBM will strengthen existing relationships with top companies deploying iOS devices. However, he doesn't expect a surge in enterprise sales for Apple, leaving the consumer market as the company's main target.
For example, Munster said that if the new IBM deal were to prompt half of the Fortune 500 to each purchase an additional 2,000 iPhones and 1,000 iPads beyond what they were previously planning, it would amount to just a half a percent of projected calendar year 2015 revenue.
But while most companies are utilizing iOS, Apple Chief Executive Tim Cook noted to CNBC that penetration of those devices in major corporations is still low. This deal, he said, aims to drive further adoption.
"The penetration suggests there's a huge opportunity here," Cook said. "And I think if we can bring the kind of transformation we've arguably brought to consumers to enterprise, I think there's a huge opportunity here."
The new program, dubbed "IBM MobileFirst for iOS," was announced by both companies on Tuesday. IBM revealed that it has developed more than 100 native iOS apps and services tailored to the needs of multiple industries.
Through the deal, IBM will sell and even lease iPhone and iPad units to businesses. Its MobileFirst Supply and Management program will provide businesses with device packages, as well as activation and management services
Alongside the program, Apple will also introduce a new AppleCare warranty tier tailored specifically for enterprise customers. It will include 24/7 telephone and email support, while IBM will be responsible for onsite repairs.
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97 Comments
Way too conservative, Gino. Think IBM's doings only approach the Fortune 500?
This is in line with what I was thinking when I heard about this. I think it's a good deal for Apple, but probably a better deal for IBM, and perhaps best of all for business customers. And that's all great -- nothing wrong with it. It's just not likely to move AAPL higher in any significant way.
Wrong...This will be huge for Apple. There are a ton of small and medium (my company) that is really waiting for something like this to integrate business software into the iOS platform. It is just too difficult today unless you have one of the handful of supported business solutions that is actually usable. Plus the fact that this will extend these devices even further to replace other task specific handheld will be crazy...I don't know everything but I am pretty sure about this.
Get this clown out of here.
Just because 90% of Fortune500 companies use iOS products does not mean its an intergal part of their information system. I bet half of those companies are just company iPhones.
Muenster just has to STFU already.
You are right. That being said, Muenster is also correct. Any additional sales caused by the IBM partnership will hardly move the needle for Apple. They simply cannot compare to the large number of iOS sales Apple already has.
Where this may help is further entrenching iOS in enterprise, and making it extremely difficult to switch from. In addition, if there are Macs involved, this may massively help with mac sales.
This from a guy who ups amzn eStimates to $420. Just shows you which way he wants the stock to trade the next two weeks. Come blowout earnings let us see what he does. If successful in getting cover for the price machinist ions,he may go the other way. Probably smarting from not being privy to the deal. Meanwhile amazon will earn in the next 50 years nothing close to what apple will earn in a year.