Five months after Apple Inc. (AAPL)’s partnership with International Business Machines Corp. (IBM) was announced, the companies are unveiling the initial fruits of the deal: 10 applications made for governments and businesses.
The apps, including tools that can help pilots better utilize fuel or give cable repairmen more useful analytical data in the field, are the first big test of the accord between the one-time rivals. The programs aim to marry IBM’s analytical data and back-office abilities with Apple’s experience designing user interfaces along with the mobility of its iPads and iPhones.
“People are looking for the magic,” Maribel Lopez, the principal of Lopez Research, which advises companies on information technology and mobile devices, said in an interview. She was shown the applications in advance of today’s announcement. “The magic is there, but I’m not sure people will see it because it looks so simple and easy.”
Apple is looking to fuel iPad sales, which have been sagging, by wooing new business buyers, while the alliance may aid IBM’s effort to catch up in mobile after watching other technology companies -- including Apple -- seize upon the growing popularity of smartphones and tablets.
The two companies are already working with 50 corporations to create applications for Apple mobile devices, Bridget van Kralingen, senior vice president of IBM global business services, said in an interview. The next round of apps will be available early next year, she said. The companies have said they want to make more than 100 such programs.
The partnership’s initial announcement in July came as a surprise, with the two companies saying that IBM would use its sales staff to sell Apple devices and that they’d develop applications together.
“It’s really leveraging the expertise on the part of both parties,” Van Baker, an analyst at Gartner Inc., said of the apps made for businesses. “IBM understands integration, IBM understands data orchestration, IBM understands analytics and that’s not anything Apple has expertise on. Apple understands the user experience.”
The 10 apps unveiled today are for customers in banking, retail, insurance, financial services, telecommunications, airlines and for governments, the companies said in a statement.
“They are apps that are really complete services that IBM can deliver to large corporations and tie into their existing workflow,” Phil Schiller, Apple’s senior vice president of marketing, said in an interview. “They’re very easy to use, fun and built completely ground-up for mobile, but they’re incredibly complex, powerful, tying into their back-end, large data systems for rich intelligent analytics.”
The app for cable repairmen, for example, taps into the iPad’s FaceTime ability to let servicemen seek help from an expert back at an office, while the GPS capability assists with figuring out the best route to a call.
Citigroup Inc. is considering using some of the Apple-IBM apps and has been working with the companies to help develop programs, said Heather Cox, chief client experience, digital and marketing officer for global consumer banking.
The bank is already using tablets in its operations, though in a limited manner, she said.
“The way we’re using it today is not on an integrated end-to-end basis like what we’re potentially talking about,” she said. “We do see a real opportunity trying to really drive mobility in our workforce in a completely different way.”
The apps mark the evolution of the programs for Apple’s mobile devices for business uses, Lopez, the consultant, said.
“This is the difference between being pretty versus it being transactional,” she said.
As iPad sales have fallen for three straight quarters, Cupertino, California-based Apple is seeking to sell more of the devices to businesses and governments. Total global sales of tablets to businesses, institutions and governments are projected to surge to 101 million units in 2018 from 19 million in 2013, as market share of those buyers increases to 27 percent from 7.9 percent, according to IHS Technology.
Apple is also developing a bigger iPad with a 12.9-inch screen to be introduced next year, people familiar with the plans have said, a move that could increase the tablet’s appeal to business buyers.
The opportunities to boost iPad sales among corporate customers is part of the reason activist investor Carl Icahn suggested Apple should be trading at $203 a share, more than twice its price when he released a letter to Chief Executive Officer Tim Cook making the claim. Improvements to the iPad and the IBM partnership should help lift revenue from the device by 13 percent in each of the next three fiscal years, Icahn wrote.
IBM, based in Armonk, New York, is also betting on the benefits of the partnership. Facing its third straight year of falling sales, dragged down by weak demand for IBM’s hardware and older services, Chief Executive Officer Ginni Rometty is under pressure to jump-start revenue. She has turned to newer businesses like cloud computing and data analytics for growth, while trying to update the company’s vast portfolio of software and services to be available via the Internet.
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