In a deal that would have been unimaginable 20 years ago, Apple has announced a partnership with IBM. The two companies will work together on a new class of applications for iPads and iPhones, selling Apple devices and IBM software to big businesses.
AUDIE CORNISH, HOST:
Apple has announced a deal that, 30 years ago, would have been unimaginable. It's partnering with IBM. IBM will develop a new class of enterprise applications for iPads and iPhones. And together, the two companies will sell Apple devices and IBM software to big business all over the world. Steve Henn from NPR's Planet Money team joins us now. And, Steve, I'm going to test your tech cred with a flashback to start.
STEVE HENN, BYLINE: OK.
CORNISH: Recognize this?
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UNIDENTIFIED NARRATOR: On January 24, Apple Computer will introduce Macintosh, and you'll see why 1984 won't be like "1984."
HENN: (Laughing) Audie, that's Ridley Scott's famous Macintosh ad. And he cast IBM, Apple's new partner, in the role of Big Brother.
CORNISH: That's right. So how did we get from there to here, today, where these two tech companies have decided to throw in together?
HENN: Well, you know, a lot has changed in the past 30 years. Smartphones and tablets have replaced the personal computer as the dominate platform in personal computing. So really, I think Apple and IBM are sort of natural partners today. Apple excels at making devices that people like to use, but it has never really excelled in enterprise software, something that IBM's really excellent at. IBM also brings things to the table like cloud services and Watson. So it's clear they're going to be a formidable force working together in what's an enormous market.
CORNISH: Steve, what's going on with Apple lately? A few weeks ago, it bought the headphone and streaming music company Beats, going for young consumers especially.
CORNISH: And now this partnership with IBM looks like they're trying to, you know, get into the corporate world. What's happening?
HENN: Well, you know, I think for years, Apple was able to grow enormously quickly by inventing new categories of products and selling tons and tons of them. And those days are pretty much over. So it's beginning to look more like a conventional company, you know, pursing growth through acquisitions like Beats and also by going after big, well-established markets, like the corporate enterprise market, which is something that Apple really had ignored for years.
CORNISH: Steve, what does this mean for Apple's competitors? Let's start with Microsoft.
HENN: Well, you know, if you're Satya Nadella, the new CEO of Microsoft, this deal has to make you nervous. Microsoft has made billions of dollars over decades selling software to businesses. And right now, with a combination of Apple and IBM together, they face a really formidable competitor. You know, sales of Microsoft Office and Windows have been declining. Sales of IOS have been growing to the point that actually more devices were shipped in December of 2013 with Apple's software than Microsoft's. So this has got to make you really nervous if you're Microsoft.
CORNISH: And what about Google?
HENN: Well, Google has been looking at ways to get into the enterprise business as well. Last month at its Software Developers' Conference, it announced a new platform that would allow IT managers to wall off some apps on Google phones for enterprise uses. But Google's Android operating system's just going to be a little bit harder to deal with for many people. And I think Apple and IBM may have the advantage here. You know, whoever wins, though, this is an enormous market. More people are doing work with their phones and tablets than ever before, and it's going to keep growing. So there's a big prize, and Apple and IBM know that.
CORNISH: That's NPR's Steve Henn from the Planet Money team. Thanks so much.
HENN: My pleasure. Transcript provided by NPR, Copyright NPR.