The Apple-IBM Partnership May Have Legs After All

Over the summer, I wrote a piece for Wired about how the Apple-IBM partnership might not only jumpstart stagnant iPad sales, but could be a step-on-your-throat attempt to dominate the enterprise segment that represents the last best hope for profitable business for Android OEMs.

Having been squeezed for months by Apple (at the high end) and by Xiaomi (at the low end), Samsung—the only notably profitable Android OEM—posted significantly worse quarterly mobile numbers after several years of strong growth. Meanwhile Apple introduced larger phones (iPhone 6 & 6+) which will likely squeeze Samsung even tighter in the “phablet” (their most profitable) sector.

And just last week, Apple and IBM finally unveiled the first tranche of apps from their partnership…and the results are excellent.

Two things stand out:

A Pragmatic Approach

By focusing on a few verticals—specifically banking, retail, insurance, financial services, telecommunications, government and airlines— IBM and Apple are pursuing a very pragmatic approach. All big market opportunities in their own right, this industry selection seems more client-driven than anything else. Bridget van Kralingen, IBM’s senior vice president of global business services, noted that 50 of the company’s customers identified industry “pain points”—all of which are addressed by the apps.

The value of course is two-fold. By focusing on the stated needs of actual clients, IBM and Apple had a built-in audience to begin using the apps (e.g. buy them and their related devices) ensuring all development costs were covered out of the gate.

Secondly, it ensured the “solutions” weren’t generic ones that applied to a handful of customers, but ones that tackled real market challenges. This, along with the built-in case studies, will make the solutions more appealing both to other existing IBM clients as well as non-IBM clients.

All in all, the strategy follows Geoffrey Moore’s “bowling alley” playbook pretty closely.

They Look Great

One thing that concerned me was that the apps would end up looking like something IBM would build; that the partnership was more a paper relationship than a true collaboration.

But when you look at the app designs, it’s clear Apple’s fingerprints are all over the screen. While I’m sure all the development and integration heavy-lifting was handled by IBM, thankfully, Apple appears to have handled the aesthetics. These apps are intuitive and look like something employees would want to use.

The impact of Apple’s efforts are showcased best in the “airline” apps (that were clearly built for Air Canada). As anyone who’s used the Air Canada consumer app would attest, the user experience was—shall we say—less than desirable (I didn’t call out Air Canada as the “bad” example in “The Good, the Bad, and the Ugly User Experience” panel at The Beat Live earlier this year for nothing).

Now, this kind of collaboration is possible when you’re dealing with only ten apps. But what happens when the business begins to scale? Will Apple stay engaged enough to maintain a high level of user experience design or will the situation regress to the relatively low bar we’ve come to expect from application-outsourcing firms and corporate-developed apps? Please Apple, stay involved!

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Phono Image610 239 8100