Apple's magic decade, IBM and Sony

Apple's magic decade, IBM and Sony

Summary: Apple's embrace of the enterprise is going to be Tim Cook's most lasting and important legacy. Samsung has taught Apple a lesson the company will profit from for decades.

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Sony's breakthrough: the TR-63 "poketable" radio. Image courtesy Sony Corporation.

Remember Sony? The innovative Japanese firm dominated cool consumer electronics for decades. Starting with pocket-size transistor radios in the 1950s — which they still make — Sony pioneered technically superior products including Trinitron TVs, video recorders, Walkmans, MiniDisc, Betamax, Video8, DAT, optical discs, 3.5-inch disks, Blu-ray and the PlayStation line.

Well-designed, innovative and premium-priced, Sony's consumer product strategy was similar to Apple's under Steve Jobs. Steve's reluctance to court enterprises — dumping the profitable server and storage business to focus on the iPhone — has clearly changed under Tim Cook.

Which is a very good thing for Apple.

As long as Sony could pump out hit products, it did well. But other companies, such as Matsushita — now Panasonic — were watching Sony and mass-producing similar and lower-cost products after Sony proved the market.

As Samsung found, after the courts eviscerated Apple's design patents, this can be a very good business. After all, Samsung manufactures many components in Apple products, so they have advantages over Apple. Copy almost exactly and you're done!

Apple's magic decade

The Apple/IBM deal is good for both companies. Both are premium brands. They don't compete.

IBM is investing heavily in back-end technologies. Apple owns the premier mobile front-end. Apple's iOS developer base and enterprise footprint make it low risk for IBM. If IBM can't make it work, shame on them.

Unlike Microsoft, Apple isn't interested in beating IBM in the enterprise. There will be strains in their relationship, but nothing like the warfare with Microsoft in the early 90s.

It's also very good for Apple because enterprises aren't fickle consumers. They invest in productivity, not toys. Once the system is working they will stick with it for years.

Which means consistent revenues over the long term — the enterprise lock-in that has benefitted Windows for decades. Enterprises don't agitate for the Next Great Thing the way consumers do, either. If it ain't broke, don't fix it.

The pace of innovation

The last point is important because Apple's magic decade, producing the iPod, iPhone and iPad in a single 10-year period, isn't going to happen again. Apple caught the mobile wave and surfed it brilliantly, while its competitors were scuffling in the low-margin Wintel box wars, just as Team Android is today.

But that trifecta won't be repeated. Major computer innovations occur roughly once a decade. Mainframes in the 50s, minicomputers in the 60s, microprocessors in the 70s, PCs in the 80s, notebooks in the 90s and smartphones in the 00s. That trend is no accident.

If Apple breaks the code for wearable tech this decade, that will be it for years. Stepwise enhancements to current products, yes. Breakthroughs like the iPhone, no.

The Storage Bits take

Apple's challenge in the coming decade is to build the same kind of unassailable position in the enterprise that Microsoft has enjoyed with Windows for the last 25 years. Just as partnering with IBM in the 80s helped Microsoft achieve that, so will Apple's deal with IBM today.

Steve Jobs planted the seeds. Tim Cook's job is to ensure a plentiful harvest in the coming decades.

That's something Sony rarely achieved — Trinitron TVs the major exception — and exactly what Apple must achieve for a lasting legacy.

Comments welcome, as always. 

Topics: Storage, Apple, Hardware, IBM, Mobility

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17 comments
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  • developers developers developers

    Steve Ballmer's most derided moment, and yet his cleverest insight. That's the key to Microsoft's ubiquitous place in business.

    IBM's got the consultancy army that allows businesses to realize complex plans. But it will only happen if they can get enough people coding for the platform to actually make it happen. Apple and IBM would really have to step it up, as Visual Studio and .NET are easily the strongest dev platform out there.

    Xcode is pretty good, and Swift is a big step... but there's a ways to go. Apple's strict MVC development pattern adds a bit of complexity (more on the Mac side than the iOS side, with the storyboard feature) and they need to find ways to ensure that gets as easy as possible.
    Mac_PC_FenceSitter
    • Totally agree

      Apple = Expensive gadgets, IBM = expensive services. All of the current enterprise developers are going to steer clear of both. Best bang for you buck is Microsoft dev tools and commodity hardware. After all, is about making a profit not some dumb cool factor.
      Sean Foley
  • Apple

    Will have to change their thinking, large enterprise customers do not upgrade on every new shiney ball that is released and expect support for many, many years. If Apple can deal with that, then they will do fine, however if they do what they do now then they will be tossed to the side.
    schultzycom
  • You nailed it perfectly

    Why has IBM stayed around - it successfully got off the treadmill of "what you got new for me". It figured out that services and enterprise products, while not sexy and all over the press and the digerati are reliable sources of income and pretty darned profitable. And they know the will have repeat customers and be a "first to turn to" vendor. Smart.

    Now Apple can get off the treadmill too. It just has to keep refining, broaden to cover all the corporate price points (remember, if a large corporation deploys iProducts, these will be in huge numbers, so cutting them a deal will in the end subsidize the consumer and (now) "professional" businesses so if they cost a little more and sell a little fewer units, so what. And now they also don't have to stay in the gadget wars. As long as they meet the needs of their customers, who cares what the fashion police think - they will happily take their money and move on.

    As long as the relationship isn't screwed up (and that can be a big "IF") both sides win. And really, the costs for both sides are pretty low to start this. Great move on both their parts.
    jwspicer
  • "Enterprises don't agitate for the Next Great Thing the way consumers do"

    I think you're pointing with the wrong end of the stick.

    Most consumers don't want the next thing. They want the thing they already own. And, they want it to function forever and to be supported forever. However, this doesn't drive sustainable profits. Consequently, manufacturers drop support for previous products and push new features as if those were necessary improvements. Marketing invents desire, and manufacturers don't care how much time/effort/money consumers waste on the transition.

    Enterprises need the same old thing as consumers. The difference is, as a consolidated market force focused on ROI, they are less likely to be bulldozed by latest trends. They can negotiate contracts for reliable hardware & services to sustain the status quo.
    SlimSam
  • While Sony is on the ropes

    Its PlayStation, currently at version 4, is doing rather well.
    Rabid Howler Monkey
    • The only consistantly profitable part of Sony

      Is it's financial services division.
      matthew_maurice
    • That's funny

      Is the PS4 making an economic profit? That is to say off all the things they could spend thier money on is that he best? Sony is the only company ever to sue itself. Their problem is that their consumer products were based on technology but that is in direct conflict with their media business that is based on artificial scarcity. Matthew_maurice's comment is funny because that is all GM was before the bankruptcy. All these companies have progressed until they are just looking for way to use rent seeking behavior rather than innovation.
      ethicsg
  • Quite a prophesy!

    That enterprise is going to be Tim Cook's legacy. A few months ago the pundits were calling for him to be fired and now we have his career all wrapped up and successful to boot. I would wait a bit. Perhaps he will bring all manufacturing to the US and that will be his legacy. Or maybe flying cars...
    rfoto
  • Time will tell

    I predict all the rosy prophecy is worthless and wrong. The Apple & IBM love fest will burnout quickly with little result.
    greywolf7
  • Apple is not

    Apple is not embracing the Enterprise until they license the software without hardware. A couple sales apps to hook into IBM services is barely interesting.
    Buster Friendly
    • Buster Friendly "until they [Apple] license the software without hardware"

      This is an interesting parallel between Apple Mac and IBM's mainframe business:

      o Apple sued Psystar into oblivion for selling its PCs with OS X
      o IBM sued Platform Solutions Inc. (PIS) for selling its mainframes with z/OS (IBM later acquired PSI)

      You can look up a link to an article regarding Apple and Psystar. Here's a link to an article regarding IBM and PSI:

      http://www.informationweek.com/ibm-sues-maker-of-intel-based-mainframe-clones/d/d-id/1049524
      Rabid Howler Monkey
      • They're not the only ones

        Sun had lawsuits over Sparc clones. I think DEC did too. Licensing the software for commodity hardware is what made Microsoft the key enterprise platform.
        Buster Friendly
        • Let's turn this around (and assume a Bizarro world)

          IBM and Microsoft partner to create IBM enterprise apps for Nokia Windows Phone 8-based smartphones and Windows RT-based Surface tablets (the Surface is Microsoft's direct competitor to the iPad).

          Now, how about this? Microsoft is not embracing the Enterprise until it licenses the software without hardware. That's right, one cannot buy Windows Phone 8 or Windows RT separately as they are *only* available with the hardware. Just like with Apple iOS.

          Fail.
          Rabid Howler Monkey
  • Apple is hardly embracing the enterprise.

    They're just not completely ignoring it now. Big difference.
    matthew_maurice
  • Really? I mean you really wrote this?

    "After all, Samsung manufactures many components in Apple products, so they have advantages over Apple. Copy almost exactly and you're done!"

    Aha. Copy Apple. What a load of trash!
    The Samsung components Apple uses aren't Apple's - Despite the Apple-hype, Apple do not have the capability to either design or produce those components!
    They buy in that capability from Samsung. Without Samsung, Apple would have to try to find someone else.

    You guys in the old US of A really need to realise that your time as the big shots in the world is over - the future lies with technology from Korea and China!

    And if you don't like that, well... You created your own destiny.
    Lord Minty
    • did you just read "samsung copied apple" and protest?

      Just so we all know where I am at - I current own and use a iPhone 4S, my first and only iPhone.
      And to be honest, I don’t “love” it – but I can get an app on it to do anything I want, and apple products word well with each other
      So I find it a very suitable and practical phone for me and my current lifestyle.

      Please explain if I have misunderstood your point, once I get to the end of my (long) post

      I felt that Robin Harris made a very good and clear point, with apple using Samsung parts, if apple produce a successful new widget, it is easy so Samsung to develop a similar widget (without having to develop technology or do market research) and get it to market quickly.

      One part of the fanboi vs fandroid “war” that I think both parties need to just move on from is this.
      Yes – Samsung blatantly copied the first iPhone.
      But, both sides need to get over it (now)
      Yes, a few manufactures had experimented with phones that were all touchscreen (a few programmable remote manufactures had done the same thing) apple didn’t “invent that idea.” Similarly, the idea of having your (4) regularly used icons always at the bottom of the touch panel “Palm” had been doing for years (decades?)
      But, Apple pulled a bunch of ideas together into a very good and desirable package, and Samsung copied this.
      It is extremely common for companies to look at their competitors’ products when shaping their future products, and to change their products based on what is getting the interest of the consumer. But in this case, it is pretty safe to say that Samsung wasn’t subtle enough in their copying. I think the icons was the clearest case of this http://indroid.info/news/samsung-allegedly-copied-iphone-app-icons-too-apple-says-and-it-may-be-right/ . Another is the fact that when you get to the end of a scrollable region, the screen stretches, then elastically bounces back, this considered very normal now, but it was new when Apple did it, it was a trivial detail, a small nicety, but there was no need to copy it, many other graphics, like a shudder, could have been used at the end of the scrollable range to make the experience feel “tactile” yet it interestingly the same effect appeared in Samsung (not just Samsung) devices post the iPhone release. From my memory, up until about 2010, Samsung users were very open about this fact. That was the reason you bought a Samsung (Galaxy), it was “just like an iPhone” but cheaper. For those of us who had come from (pre-iPhone) smartphones, (rather than feature-phones and “normal” cell-phones) the Samsung was not only cheaper, but also more familiar, as you could add an SD card for extra memory and plug the device into your computer like an external drive.
      So, although Yes, Samsung copied (or borrowed too heavily from) the first iPhone, they have both borrowed from each other since
      And being Apple’s first mobile phone, they also borrowed from the successful elements of the smartphones that came before them (in my opinion, most heavily from the Palm Treo. But Apple was smart enough to make their product visually very different, it had always been an “Apple thing” to put design/feel/aesthetics very high on their priority list. I personally think the “mistake” Samsung made was to copy the “look and feel” of the iPhone, as this was probably more precious to Apple than the functionality of the device.
      But once again, it happened almost a decade ago now

      Also, Robin Harris said, “After all, Samsung manufactures many components in Apple products, so they have advantages over Apple. Copy almost exactly and you're done!”

      He never said that the components “were apple’s”
      Samsung makes some high end componentry for several brands
      Conveniently (for my comment) including Sony (the other focus of this article)
      For many years (I don’t know if this is still true, but I know Sony doesn’t make it’s own) The best LCD screens that Samsung made, all went to Sony, simply as that was best economic thing for Samsung to do. Consumers would pay more for a Sony TV than they would for a Samsung TV (this has been my general personal issue with Sony for almost 20 years, getting the equivalent device with a Sony logo would cost you more) Sony wanted the premium LCDs for their screens, so that they could justify charging the most. So the premium LCDs (Samsung), with a premium brand (Sony) equalled a high price that consumers would pay. People (this is less true now than it once was) simply would not have paid as much for the exact same TV with a Samsung logo on.
      This is a part of Samsung’s business, making components for other manufactures, less “fame and glory” but a very reliable income stream.

      But this is the bit that I don’t think you understood. (or where we think differently) even if the whole iPhone was built from the Samsung parts bin, that is not the bit the Apple, Robin Harris (or me) say that “samsung stole”. However, as much as I think it is clear that Samsung set out to make a phone that was as much like an iPhone as possible, to capture some of the excitement, and sales, of the iPhone, I can also see how the Galaxy wasn’t a total change in direction or philosophy for Samsung, and it wasn’t like it nothing like anything they had done before, and it was also heavily influenced by the G1. So once again I return to the initial point that fanbois vs fandroids just move on from is this.
      one.m.davis