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IBM/Apple Deal?
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GREAT post, Mainyehc - I couldn't agree more. IBM and Apple shouldn't, no - couldn't merge because they are so different. They do seem like natural partners - hence my original post about Apple announcing a partnership with IBM in the future.Mainyehc said:Interesting... Wouldn't Microsoft be better off focusing primarily in applications? I mean, seriously, even though Windows is their cash cow, maybe they could give away some of their market share. We are now beginning to understand that a 90+% OS share is completely unsustainable! Think about it: If OS X is not a primary target of malware because it only has a 5 or 6% installed base, wouldn't Apple be in serious trouble if they had a much bigger share, say, 90+% just like Microsoft?? Apple has some monopolistic tendencies, just like M$ (iPod + iTunes, anyone?), the only difference here is that they're (still) doing things right. But comparing OSes and consumer electronics is like... comparing apples to oranges. Still, if you take those tendencies into account, if Apple was the dominant player in the OS market (highly unlikely, due to their close hardware/OS system), they wouldn't be any nicer then Microsoft (or maybe not, that Palladium stuff doesn't smell too good, but anyway...).
Microsoft could take some revolutionary moves, like making Office for Linux or something... That would absolutely kill a lot of Windows' share, but hey, they would be a "cool" company and some of their troubles would go away. AND they would still have Office and other software titles as revenue sources.
Let me put it this way: I'd never consider buying a version of Windows; yet, I can hardly wait for Tiger to be released to shell out some cash to buy it. When products are well designed, people will buy them (and sometimes even if they aren't the best value, like the iPod mini, which also relies on "coolness" besides of quality).
But, you know, expecting Office to be worth buying (oh, Apple, bring up AppleWorks X already! Or... Org, bring up a decent OS X version of OpenOffice already!) would be like expecting Microsoft to turn into an Apple-like company, which is absouletely NOT going to happen (Microsoft developing cool, good quality products? No way!!). Since Microsoft doesn't have the will to rehabilitate itself, then, I'd love to see it explode, or implode, or whatever. They won't be able to dominate the market much longer, and you know, it would be cool to see an alliance between Apple and IBM as the first step towards M$'s demise. However, I definitely wouldn't like to see IBM buying Apple, IMHO. Their respective corporate cultures seem to be too different from each other, and if Apple's "culture" was lost, many, MANY people (including myself) would be very unhappy and disappointed with the tech world.
That's a no go
This sounds like complete (and preposterous) speculation...too much of a "what if". Apple is doing well, and at their stock value, they would be an expensive purchase. If IBM absorbed Apple, that would pretty much be the end of Apple. How often do computing entities merge together to create a better result? Not too often that I can think of. Consider even some of the acquisitions Apple has made that just ended up being killed off or died slowly away.
Now, if Apple and IBM decided to partner together in a common project (as they have done before on several occasions), then that would be a much better idea. If the particular project succeeds, then both companies can benefit. But if the two companies merged to be one whole company (in a sense), then it would be just too easy for IBM to kill off Apple, especially if Apple is having one of its lean years (we've all seen those happen time and time again).
The main point: The whole idea is a rotting pile of bull.
Now, IBM buying Microsoft would be funny!
This sounds like complete (and preposterous) speculation...too much of a "what if". Apple is doing well, and at their stock value, they would be an expensive purchase. If IBM absorbed Apple, that would pretty much be the end of Apple. How often do computing entities merge together to create a better result? Not too often that I can think of. Consider even some of the acquisitions Apple has made that just ended up being killed off or died slowly away.
Now, if Apple and IBM decided to partner together in a common project (as they have done before on several occasions), then that would be a much better idea. If the particular project succeeds, then both companies can benefit. But if the two companies merged to be one whole company (in a sense), then it would be just too easy for IBM to kill off Apple, especially if Apple is having one of its lean years (we've all seen those happen time and time again).
The main point: The whole idea is a rotting pile of bull.
Now, IBM buying Microsoft would be funny!
First and foremost IBM out of the blue (pun intended) puts its PC business up for sale. A move, which most industry insiders consider odd - considering IBM is the 3rd largest PC manufacturer, and it is not doing poorly (roughly $11 billion worth of sales in the past year).
Not that odd. It has to do with rate or return. If it cost 11BN to produce and you make 11BN, time to reconsider the expendature of capital.
why does IBM utilize Intel and AMD chips when it produces its own processors? Well it all comes down to Microsoft.
Hmmm. excellent point. I'm changing my mind.
3. If IBM were to acquire Apple it would no longer be in the position to require Intel or AMD for the production of its processors and could cut down on costs.
Another good supposition.
4. If IBM were to acquire Apple it would suddenly be in a position to put pressure on Microsoft to release a version of Windows for the PowerPC (something that Apple right now has no real interest in doing) and Windows for the PowerPC would definitely be good for IBM.
Why use them at all?
Does all of this mean that IBM is really likely to acquire Apple? Well, I'm not a mystic... so only time will tell.
I say... dunno. But I think I'd like it.
Not that odd. It has to do with rate or return. If it cost 11BN to produce and you make 11BN, time to reconsider the expendature of capital.
why does IBM utilize Intel and AMD chips when it produces its own processors? Well it all comes down to Microsoft.
Hmmm. excellent point. I'm changing my mind.
3. If IBM were to acquire Apple it would no longer be in the position to require Intel or AMD for the production of its processors and could cut down on costs.
Another good supposition.
4. If IBM were to acquire Apple it would suddenly be in a position to put pressure on Microsoft to release a version of Windows for the PowerPC (something that Apple right now has no real interest in doing) and Windows for the PowerPC would definitely be good for IBM.
Why use them at all?
Does all of this mean that IBM is really likely to acquire Apple? Well, I'm not a mystic... so only time will tell.
I say... dunno. But I think I'd like it.
IBM Apple
No way would steve let it happen. Do you know how stupid IBM is? I worked for IBM as a PC tech, although I am really a Mac tech, but anyway, the company I was placed at was going to buy a Mac for their print center and they wanted quotes from outside vendors for support. To my dismay, I was told IBM does not support Macs. Well, I had over 10 years Mac experience, etc, and it was the straw that broke the camel's back. I left. It's kind of like the stories you hear about the army when they drafted people. They'd get a cook and put him in the motor pool. IBM is that dumb. It would never happen and if it did, it would never work out.
No way would steve let it happen. Do you know how stupid IBM is? I worked for IBM as a PC tech, although I am really a Mac tech, but anyway, the company I was placed at was going to buy a Mac for their print center and they wanted quotes from outside vendors for support. To my dismay, I was told IBM does not support Macs. Well, I had over 10 years Mac experience, etc, and it was the straw that broke the camel's back. I left. It's kind of like the stories you hear about the army when they drafted people. They'd get a cook and put him in the motor pool. IBM is that dumb. It would never happen and if it did, it would never work out.
JesseJames said:
Sorry thats just not so. M$ owns - wait for it - 0.17% of Apple.
Maybe its up to 0.3% with stock value increase. Big deal.
Thats not significant.
Friends? How?
Bill gates has run his course - his days of theft are over. He stole DOS and managed to convince the world to buy crap, assisted by Apple doing all the wrong things.
He has so much money that he is distant from the world as most of us know it.
\M$ have had nothing new to show us for a long time - their latest 'idea' the entertainment centre - stinks.
Apple have just taken control of an entire NEW market - the online music market.
They dont need M$. M$ will continue to make Office for MAC because of the risks of monopoly lawsuits if they dont.
And thats all we need and want from M$. Office.
As for IBM and Apple - they will remain allies with the PPC chips.
There has never been a real merger or buyout of any size in the PC world - YET.
They are all waiting for someone to fade out. HP or Compaq would be my best guess to disappear - they have nothing to differentiate them from the crowd.
Why would IBM buy a company that makes PC's when it is selling its PC division?
No buyout, no merger.
DoctorPete said:
IBM selling its pc business is not coming out of the blue. Frankly its a surprise they took this long. They have been unable (along with HP, Gateway, Compaq, and just about everyone else besides Dell) to make a profit at selling pc's. At best it was break even. And on top of that, there is the fact that the pc business is basically going to be worse going forward. Single digit growth, no margins and no pricing power. Other than Dell and Apple, no one else is making money at it. The only reason they stayed in this long is pride(its called IBM-compatible pc), the lure of that big fat gross income number, and to be able to offer corporate clients a full solution. They got out of retail already. And also the consumer market. So why should this surprise anyone. BTW, next on the list is HP. They make about nothing on pc's and are carried by... toner/inkjet cartridge sales.
As for the idea of IBM buying Apple, this has got to be one of the silliest, most poorly thought out bits of speculation I've seen in years, at least since the rumor about Disney buying Apple(probably the all-time #1-with-a-bullet senseless and illogical rumor). In addition to the many valid points made by others about things like corporate culture, Jobs personality, etc., the author of this rumor seems to have forgotton on simple thing: its not really financially workable. In a friendly takeover, IBM would have to offer something along the lines of 75-80/share, based on recent share prices. If its hostile, which it would likely have to be, try 90-100. And who knows what sort of poison pills Apple has in place in the event of a hostile bid. My thinking is considering that Apple was at various times(including very recently) a prime target for a hostile takeover(good cash flow, low debt, very high assets/cash), the board probably has some big-time poison pills in place. I seriously doubt IBM is willing to spend 35-40 BILLION on a takeover of a business in a segment it is trying to EXIT.
Also, this seems like an incredibly bad idea for Apple. Apple is a consumer company that is built around a culture of being "cool." IBM has failed miserably in the consumer space (remember the PCjr.?) and is so unhip it hurts. IBM: great in corporate business, really bad in retail/consumer. If IBM did buy Apple, it would likely just run it into the ground (think:Lotus, OS/2).
As silly as the buyout rumor is, the partnership rumor has merit. Basically, IBM has chosen its chip division over its pc division internally. Makes sense, considering margins are a lot better in cpu's. And considering its had a lot more success with its cpu's. By unloading its pc business, IBM is now able to compete directly with Intel everywhere. Also, IBM has been pushing unix/linux heavily. With the gap in its lineup, IBM could just point big iron server customers to Apple or, even better, license and/or rebrand osx computers. Thing is, they already have an alliance, which is why Apple has the G5.
It would be great though to see IBM just license and sell osx computers running on ppc. It would give macs instant credibility and presence in the corporate market. And eliminate the "single-vendor" stigma osx currently has in corporate IT. Also, they could fill out the line, offering things like low cost headless units that business' want. Like a 1.8 G5, 512MB ram, basic video/sound, 40GB HD in a SFF.
China Bought It!
IBM sells PC business for $1.25B
China's Lenovo to become world's No. 3 manufacturer; Big Blue to focus on services, software.
December 7, 2004: 9:27 PM EST
BEIJING (Reuters) - China's largest personal computer maker, Lenovo Group Ltd., said Wednesday it is buying control of IBM's PC-making business for $1.25 billion, capping the U.S. tech giant's gradual withdrawal from the business it helped pioneer in 1981.
The agreement, which forms the world's third largest PC business, calls for Lenovo to pay IBM $650 million in cash, $600 million in Lenovo Group common stock and for Lenovo to assume $500 million in net balance sheet liabilities from IBM.
http://money.cnn.com/2004/12/07/news/international/lenovo_ibm.reut/index.htm?cnn=yes
IBM sells PC business for $1.25B
China's Lenovo to become world's No. 3 manufacturer; Big Blue to focus on services, software.
December 7, 2004: 9:27 PM EST
BEIJING (Reuters) - China's largest personal computer maker, Lenovo Group Ltd., said Wednesday it is buying control of IBM's PC-making business for $1.25 billion, capping the U.S. tech giant's gradual withdrawal from the business it helped pioneer in 1981.
The agreement, which forms the world's third largest PC business, calls for Lenovo to pay IBM $650 million in cash, $600 million in Lenovo Group common stock and for Lenovo to assume $500 million in net balance sheet liabilities from IBM.
http://money.cnn.com/2004/12/07/news/international/lenovo_ibm.reut/index.htm?cnn=yes
I see Jefferson beat me to posting a link about the sale of IBM's PC business to Lenovo. I feel, however that it might be of note to point out what a small portion of IBM this really is.
"While PC sales still account for a sizable chunk of the companys revenues, the business is barely profitable. In the 12 months ended Sept. 30, the Personal Systems Group accounted for $13.6 percent (msn's typo) of IBMs revenue total of $94.74 billion, but a paltry 1 percent of the companys $8.10 billion net profit for the period." (from http://www.msnbc.msn.com/id/6666170/)
I can see why IBM felt little value in continuing as such in a market where the margins and returns were so incredibly low.
"While PC sales still account for a sizable chunk of the companys revenues, the business is barely profitable. In the 12 months ended Sept. 30, the Personal Systems Group accounted for $13.6 percent (msn's typo) of IBMs revenue total of $94.74 billion, but a paltry 1 percent of the companys $8.10 billion net profit for the period." (from http://www.msnbc.msn.com/id/6666170/)
I can see why IBM felt little value in continuing as such in a market where the margins and returns were so incredibly low.
roadapple said:
I don't think so-- since 2002 I have purchased:
TiBook
PB !7"
23" studio Display
iPod 30
iMac G5 20" (2)
iPod photo
The fact that you (and I) are awaiting a PBG5 says volumes.
People will always pay a premium to get what they want!
Dick
IBM and Apple merge. Combined they make PB G5s at 2.5GHz.
Microsoft loses all support from companies selling laptops because of the PB success, and then starts to lose desktop marketshare as the new switches brag about their great laptop.
Microsoft pays China billions for nuclear power, forgets about software development and threatens the world to stop buying anything related to IBM/Apple.
The FBI, Navy, Army, Marines, and Air Force raids all Microsoft headquarters and places Balmer and Gates in a maximum security prison, then dismantals the weapons.
IBM/Apple win and no more Microsoft.
It could happen, right?
Microsoft loses all support from companies selling laptops because of the PB success, and then starts to lose desktop marketshare as the new switches brag about their great laptop.
Microsoft pays China billions for nuclear power, forgets about software development and threatens the world to stop buying anything related to IBM/Apple.
The FBI, Navy, Army, Marines, and Air Force raids all Microsoft headquarters and places Balmer and Gates in a maximum security prison, then dismantals the weapons.
IBM/Apple win and no more Microsoft.
It could happen, right?
If Apple suddenly wasn't a computer company....
What would Apple sell if it didn't sell computers or software? I think something to do with Ergonomics. Apple makes complex hardware look elegant and easy to use. Apple does the same thing to software. Apple is world recognized for its ability to make the complex obvious.
IBM makes great business solutions that aren't always obvious to use. I think that in the area of ergonomics Apple and IBM fit well together as some kind of working partners.
Apple has added a wonderful interface to an operating system IBM is very familar with and compliled for a processor IBM knows better than anyone. That makes OSX useful to IBM for some of their other products.
If you were IBM and wanted to spruce up a product line would a better human interface be useful?
What would Apple sell if it didn't sell computers or software? I think something to do with Ergonomics. Apple makes complex hardware look elegant and easy to use. Apple does the same thing to software. Apple is world recognized for its ability to make the complex obvious.
IBM makes great business solutions that aren't always obvious to use. I think that in the area of ergonomics Apple and IBM fit well together as some kind of working partners.
Apple has added a wonderful interface to an operating system IBM is very familar with and compliled for a processor IBM knows better than anyone. That makes OSX useful to IBM for some of their other products.
If you were IBM and wanted to spruce up a product line would a better human interface be useful?
You need to reread Cormac O'Reilly's column. His theory was that an IBM/Apple deal might follow IBM's divestiture of its PC division, not that they would make a deal with Apple about that division. The Lenovo sale is where the speculating begins, not ends.jon snow said:
sigamy said:
Except by that time OpenOffice.org will have a smoking native port to Mac OS X and Microsoft will not get those licensing revenues from Office it desperately needs to fund other ventures to decrease reliance on its Windows and Office franchises. Windows&Office account for 120% of Microsofts' revenues, the other 5 divisions...well you do the math.
Sounds great in theory, except IBM won't dump Linux. Too much invested. Too much intertia. Too much. Nice thought though.
JaromSki
macidiot said:
Very good post. It's nice to know somebody understands the past history and current prospects of the PC industry. As of today, both the inventor of the PC and the inventor of the PC clone business are gone. What does that say about its future?
rlane said:I wonder how much longer IBM will hang onto their processor division
Should IBM dispose of this group, who will Apple turn to? Just a thought to provoke some comments......
Won't happen - the processor business is a key to IBM's success and the basis for a lot of their current initiatives (Cell) and products (almost all servers). Also, it is going to have some huge years with all the next generation game consoles using an IBM manufactured chip.
For an example of a damn foolish dumping of a processor see HP - oh wait - they dumped two (HP-RISC and Alpha).