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With most major companies already using iOS, Piper Jaffray doesn't see IBM deal surging Apple sales

post #1 of 119
Thread Starter 
Apple's new enterprise partnership with IBM will likely strengthen the position of the iPhone and iPad in the corporate world, but it probably won't move the needle much in terms of overall device sales, investment firm Piper Jaffray believes.




Analyst Gene Munster's take on the new Apple-IBM partnership was declared in a note to investors on Wednesday, a copy of which was provided to AppleInsider. He noted that iOS devices are already being tested or deployed at 98 percent of Fortune 500 companies, and 92 percent of Global 500 corporations.

"We do not expect the IBM partnership to have a meaningful impact on Apple's financials overall primarily based on our belief that large corporations are already utilizing iPhones," Munster wrote. "We believe that IBM will add incremental functionality for corporate customers, but is unlikely to be the make or break factor for a large corporation in utilizing iOS."

In his view, Apple's new deal with IBM will strengthen existing relationships with top companies deploying iOS devices. However, he doesn't expect a surge in enterprise sales for Apple, leaving the consumer market as the company's main target.

For example, Munster said that if the new IBM deal were to prompt half of the Fortune 500 to each purchase an additional 2,000 iPhones and 1,000 iPads beyond what they were previously planning, it would amount to just a half a percent of projected calendar year 2015 revenue.

But while most companies are utilizing iOS, Apple Chief Executive Tim Cook noted to CNBC that penetration of those devices in major corporations is still low. This deal, he said, aims to drive further adoption.

"The penetration suggests there's a huge opportunity here," Cook said. "And I think if we can bring the kind of transformation we've arguably brought to consumers to enterprise, I think there's a huge opportunity here."




The new program, dubbed "IBM MobileFirst for iOS," was announced by both companies on Tuesday. IBM revealed that it has developed more than 100 native iOS apps and services tailored to the needs of multiple industries.

Through the deal, IBM will sell and even lease iPhone and iPad units to businesses. Its MobileFirst Supply and Management program will provide businesses with device packages, as well as activation and management services

Alongside the program, Apple will also introduce a new AppleCare warranty tier tailored specifically for enterprise customers. It will include 24/7 telephone and email support, while IBM will be responsible for onsite repairs.
post #2 of 119
Way too conservative, Gino. Think IBM's doings only approach the Fortune 500?
post #3 of 119
This is in line with what I was thinking when I heard about this.

I think it's a good deal for Apple, but probably a better deal for IBM, and perhaps best of all for business customers. And that's all great -- nothing wrong with it. It's just not likely to move AAPL higher in any significant way.
post #4 of 119

Get this clown out of here.

 

Just because 90% of Fortune500 companies use iOS products does not mean its an intergal part of their information system.  I bet half of those companies are just company iPhones.

 

Muenster just has to STFU already.

post #5 of 119
Quote:
Originally Posted by Blastdoor View Post

This is in line with what I was thinking when I heard about this.

I think it's a good deal for Apple, but probably a better deal for IBM, and perhaps best of all for business customers. And that's all great -- nothing wrong with it. It's just not likely to move AAPL higher in any significant way.

 

You are absolutely wrong.

 

This IBM deal could setup a huge movement to electronic payments with TouchID/iBeacons.  IBM does a ton of POS systems for massive companies.  That one aspect alone would move the needle.

post #6 of 119
Wrong...This will be huge for Apple. There are a ton of small and medium (my company) that is really waiting for something like this to integrate business software into the iOS platform. It is just too difficult today unless you have one of the handful of supported business solutions that is actually usable. Plus the fact that this will extend these devices even further to replace other task specific handheld will be crazy...I don't know everything but I am pretty sure about this.
post #7 of 119
Quote:
Originally Posted by sog35 View Post
 

Get this clown out of here.

 

Just because 90% of Fortune500 companies use iOS products does not mean its an intergal part of their information system.  I bet half of those companies are just company iPhones.

 

Muenster just has to STFU already.


You are right. That being said, Muenster is also correct. Any additional sales caused by the IBM partnership will hardly move the needle for Apple. They simply cannot compare to the large number of iOS sales Apple already has.

 

Where this may help is further entrenching iOS in enterprise, and making it extremely difficult to switch from. In addition, if there are Macs involved, this may massively help with mac sales.

post #8 of 119
This from a guy who ups amzn eStimates to $420.

Just shows you which way he wants the stock to trade the next two weeks. Come blowout earnings let us see what he does. If successful in getting cover for the price machinist ions,he may go the other way.

Probably smarting from not being privy to the deal. Meanwhile amazon will earn in the next 50 years nothing close to what apple will earn in a year.
post #9 of 119

Muenster is wrong on two accounts

 

#1 - A Fortune 500 company would purchase WAY MORE than 3,000 iOS devices in a full roll out (number he used)

 

#2 - There are way more business than just the Fortune 500

 

This Muenster clown is a Bear in Bull clothing.  The guy is always around to rain on Apple's parade during good news yet he still has a buy rating on the stock.  This guy has been saying Apple would bring out the iTV since 2011.  This is the same clown who said the 9 million iPhones sold in the first week end last year was no big deal since 4 million was to stuff the channel.  Thus his prediction of 5 Million was correct.  FUK this guy. 

 

Its so obvious that Jaffray has shorted this stock and is trying to keep the stock from going up.  They use an anaylsis like Muenster to scare Bulls. 

post #10 of 119
Quote:
Originally Posted by addicted44 View Post
 


You are right. That being said, Muenster is also correct. Any additional sales caused by the IBM partnership will hardly move the needle for Apple. They simply cannot compare to the large number of iOS sales Apple already has.

 

Where this may help is further entrenching iOS in enterprise, and making it extremely difficult to switch from. In addition, if there are Macs involved, this may massively help with mac sales.

 

Wrong again.

 

Munester gives an example that a Fortune 500 company would buy 3,000 iOS devices.  WRONG.  A complete roll out would be TENS of THOUSANDS of devices.

 

Second there are way more than 500 companies that Apple/IBM is targeting with this.  IBM has over 100,000 sales staff/implementation staff.  You think they are only selling to 500 companies?

post #11 of 119
If he's just thinking about email, contacts and calendars, then he's right. Unfortunately for him, that's not what Apple/IBM are thinking about.

Business IT is filled with absurdly expensive software/hardware combinations that could be trivially replaced by an iPad if large IT providers stopped milking the status quo.

As Business IT infrastructure doesn't end at correspondence apps. The point of IBM writing 100 industry-specific applications is going to allow apple devices to be rolled out easily for a large range of business uses where they would have previously required costly in-house development, or a massive scale to justify switching costs.

It's actually quite a big opportunity for large business, who can now replace expensive to maintain equipment and code with a user-preferred solution on relatively inexpensive hardware. (With the bonus of AppleCare like support.)
post #12 of 119
I'm sure Piper Jaffray knows more about this than Apple or IBM. The fact of the matter, is many of those companies are using iPads in a very small way. Making these devices a viable alternative could lead to a big change in corporate thinking, not just in the Fortune 500, but across the world. And no one was saying this would increase apple sales by x% anyway. This is just another awesome ripple of the Apple effect. Awesome news for Apple and IBM. One OS to rule them all. And corporate seems like a good fit for Apple, because they can afford the high end devices. This gives Microsoft a taste of what it was like when IBM was on the other side of the fence. I think the biggest take away here is that Apple isn't just a fad in the business world. It's here to stay. Better options bring more customers who bring better options. Microsoft missed the train here, Android has a good name in the malware industry, and Apple is making all the right moves.
post #13 of 119
Gene "Turd in the Punchbowl" Munster.
A.k.a. AppleHead on other forums.
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A.k.a. AppleHead on other forums.
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post #14 of 119
While I don't expect any sudden surge, I do expect that over time, this will add significantly to Apple's sales, and presence in enterprise (which means business, government and education).

It will take some time for this to happen. As both companies have said, it will begin to rollout during the fall, as Apple updates iOS to 8, and comes out with new, more powerful hardware. But it will mainly be impacted through 2015 as most of this is actually available.

What I expect, is that this will speed Apple's adoption, and make that adoption more bullet proof regarding Google and Microsoft. Of course, this kills any chance that Blackberry may have had. I've already read a couple of dozen articles about this deal, and all have been positive, some exceedingly so.

We should also remember something very interesting. When Cook said that he was going to double down on secrecy, we all thought he meant hardware. But this deal has not been negotiated over the past two years, it's been IN PLACE over the past two years. The deal was done two years ago! What's even more remarkable about that is that both Apple and IBM have had hardware and software teams working in each other's plants on this for a substantial portion of the past two years—and not a word of this came out. Not even a whisper! Remarkable!

It makes me think of something that could be happening which I think, if true could be just as significant as the deal itself, and I'm mentioning it here first, and not on all the business sites I regularly am a part of.

Apple has significantly bolstered iOS, in particular, and OS X regarding security, bug reporting and fixing, etc. over the past two years. It makes me think that something has been going on there that has been different, but I couldn't put my finger on it, even with the people I know at Apple, and IBM. Now I think that this deal is a good part of the reason.

IBM knows what is needed, and with those teams working together I can see the impact they may have been having. Remember that the deal is exclusive. That word, exclusive, is an important one. But I think it goes further than that. The exclusivity of the deal allows Apple and IBM to do things that otherwise they might not. I'm wondering if this extends to Apple allowing something they've never allowed. That is, low level access to iOS and the hardware, and possible something there for OS X as well. With Handoff, OS X must be involved somewhere, though they both just talked about mobile. Handoff adds to that mobility argument though, and I suspect we will see something there as well.

But, as IBM will be enabling their additional security on iOS, they would need low level access to the software and hardware to make it more effective. As we should all know, security can't be added to the top of an OS and be expected to work as well as it should. Now, I know there will be some who will be thinking old thoughts, and complaining that Apple won't do that. I disagree. We aren't talking about some small, untrustworthy third party here, we're talking IBM. IBM is likely the only company Apple would trust with this, as as has been pointed out in a number of articles, both companies have no rivalries, no competing products. This is all complementary to each, additive.

So, yes, I can see this as being part of what is happening. Remember, they've been working together on this for the greater part of two years already.

There's really so much more that can be said about this.
post #15 of 119
As for getting advice on Apple, you'd be better of asking the magic eight ball than relying on Gene Munster.
post #16 of 119

While this deal is about "business", I also see another benefit from the consumer point of view.

Cloud services, a place where Apple has been weak. With IBM's expertise, Apple's services may get the needed boost to bring their offerings up to par or maybe even surpass Google's and Microsoft's.

 

I'm thinking here calendars, e-mail, iTunes match (painfully slow) and others.

post #17 of 119
Quote:
Originally Posted by Blastdoor View Post

This is in line with what I was thinking when I heard about this.

I think it's a good deal for Apple, but probably a better deal for IBM, and perhaps best of all for business customers. And that's all great -- nothing wrong with it. It's just not likely to move AAPL higher in any significant way.

 

Most companies use iOS. That doesn't mean that they exclusively use iOS.

Apple has a huge growth opportunity here.

post #18 of 119
Quote:
Originally Posted by melgross View Post

While I don't expect any sudden surge, I do expect that over time, this will add significantly to Apple's sales, and presence in enterprise (which means business, government and education).

With Handoff, OS X must be involved somewhere, though they both just talked about mobile. Handoff adds to that mobility argument though, and I suspect we will see something there as well.

Ding, ding, ding! Yes, didn't think of this. I thought or wished that something OS-Xy comes out of this iOS push into enterprises. If your direct reports have been equipped with iOS devices from this partnership, what better and more convenient way to communicate and transfer data with their iDevices?
post #19 of 119
While iOS sales may not go up, the integration of iOS and OSX may lead to a significant increase in iMac, MacBook and Mac Pro sales to corporate customers.
post #20 of 119

OK, so let's do some quick math Mr. Analyst. How many corporations are there in the world. Answer... BIG NUMBER that is greater than 500. OK.  Next, Apple says they are used in 98% of Fortune 500 and 92% in Global 500 right? Yes. But, they don't say that there is anywhere near 100% penetration of mobile devices used by employees in those corporations, just that they are being used there.  Now, let's look at IBM who may or may not be used in those large corporations, but IS used in that other large number.  I think what you have here is a powerful reason for these corporations to ditch any other products and go straight Apple.

 

So using fuzzy math (or just plain logic), there's a huge upswing for Apple to be had here. They've just partnered with the company that IS enterprise and coupled that with a user experience that IS consumer level, making the best of both worlds.

 

Good luck trying to justify this in six months.

post #21 of 119

This further solidifies AAPLs position in the marketplace,  feeds into the ecosystem and increases the size of the moat competitors need to cross.  AAPL products used in the home, workplace and mobile.  Creates more recurring replacement of AAPL products.  To the extent Wall Street has increased confidence in AAPL's recurring revenue, this should expand AAPL's PE multiple.

post #22 of 119
Wall Street obviously doesn't think this deal impacts Microsoft. As of this morning Microsoft stock is up more than Apple and almost as much as IBM. A good quarter from Intel trumps Apple's announcement.
post #23 of 119

If anything, it might help legitimize Apple in the enterprise world.

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post #24 of 119
Quote:
Originally Posted by Blastdoor View Post

This is in line with what I was thinking when I heard about this.

I think it's a good deal for Apple, but probably a better deal for IBM, and perhaps best of all for business customers. And that's all great -- nothing wrong with it. It's just not likely to move AAPL higher in any significant way.

When Apple announces 250 new features in the new iOS or OSX, we all know most of these are trivial. I always assumed that the same goes for "98% of Fortune 500 have iPads".

If you think a significant opening to the heretofore trivially addressed enterprise market is not a big thing for Apple, I don't know what is. Tim Cook is putting his stamp on this company and he is doing so by looking into opportunities that Steve Jobs probably never gave more than 5 minutes thought. And that was probably the right thing for Steve to do at the time because the iOS devices were gargantuan rollouts.

But today, there probably aren't any new revolutionary devices ripe for introduction in the next few years. After all, before the smart phone, it was the PC and that was 30 plus years ago. So smart mobile has many years of build out ahead of it until enough new technologies are developed and another Steve Jobs comes around to see possibilities no one else could see as clearly and builds the next revolutionary device from disparate new tech.

Think about it, Steve began his career rolling out one revolutionary device and ended it rolling out the next one.
post #25 of 119
Very exciting news, hopefully new opportunities open up for apple in this area besides the obvious corporate use of apple products.

Watson back end to siri would be sweet... Of course then skynet will take over the world and computerized spiders will take over the area at the bottom of the oceans as a staging groud for a land war...
post #26 of 119
Quote:
Originally Posted by fjose1929 View Post

This from a guy who ups amzn eStimates to $420.

Just shows you which way he wants the stock to trade the next two weeks. Come blowout earnings let us see what he does. If successful in getting cover for the price machinist ions,he may go the other way.

Probably smarting from not being privy to the deal. Meanwhile amazon will earn in the next 50 years nothing close to what apple will earn in a year.


I kind of suspected that Wall Street would play down this deal.  I'm starting to believe that there isn't anything Apple can do to significantly move the share price the way Google, Amazon or Netflix would move.  Apple would likely have to double its revenue or something nearly else as impossible to impress Wall Street.  It's pretty obvious that neither Google or Amazon are going to have to earn their P/Es as Apple does.  I'm certain Google can't double its revenue and it would be even harder for them if Apple built its own search engine to replace Google's.  Let's face it, Wall Street is not going to give Apple a P/E of 17 or 18 and there's something insidious about that.  Tim Cook is doing an excellent job but Wall Street keeps going on about innovation not being there but never quite explaining what type of innovation they're demanding.  Maybe they're expecting Apple to successfully develop fuel cells for computers where most every other company in the world has failed at building economical fuel cells in almost every application possible.  I think expectations for Apple are nearly impossibly high for the top tech company in the world.  This enterprise move would seem to give Apple full credence as being a company that makes useful devices for the enterprise and business world, but Munster says it's no big deal, so maybe I'm missing something.

post #27 of 119

There is a difference between "being tested or deployed" at 92% of G500 corps, and "being purchased as a standard" by 92% of G500 corps.  You can "test" using between one and 100 units.  But when you standardize on it, you're buying orders of magnitude more.  I believe PJ is completely wrong on this.  I have seen salespeople walking around, struggling with goofy Surface tablets. But with IBM's enterprise software, these folks will quickly shift to iPads.  Microsoft is going to be the loser here.  And while it wasn't voiced, I expect that IBM will be working with Apple to produce a truly functional suite of iWork apps, since you can be sure that Microsoft won't put much effort into their existing bloatware.

 

I think AI has it right in the title of this article "Piper Jaffray doesn't see IBM deal surging Apple sales".  

 

The key phrase being that "Piper Jaffray doesn't see".

post #28 of 119

Munster's track record is so poor that one should bet against what he says, rather than believe him.

 

Clearly, the Apple rumor sites love quoting him, but it's essentially a grave disservice to the readership to mention him.

post #29 of 119
Quote:
Originally Posted by sog35 View Post
 

 

Wrong again.

 

Munester gives an example that a Fortune 500 company would buy 3,000 iOS devices.  WRONG.  A complete roll out would be TENS of THOUSANDS of devices.

 

Second there are way more than 500 companies that Apple/IBM is targeting with this.  IBM has over 100,000 sales staff/implementation staff.  You think they are only selling to 500 companies?


You are ignoring the fact that iOS ALREADY is in those 500 companies, doing pilot operations. The real question you have to ask with regards to this partnership's effect on the stock (which Muenster is trying to determine) is which of those rollouts would have not happened without IBM.

 

In addition, even if you assume 1000 cos rollout 10000 iOS devices BECAUSE of the IBM partnership (i.e. they wouldn't have done it if it was Apple only) within the next year, then that is still only 10mn additional sales for Apple.

 

IBM has 100000 sales/implementation people because they don't make money by reselling devices. They make tons of money in consulting and by selling software and services. As an example, their Application Lifecycle Management tool costs something like $1000/user/month. That's like selling 2 iPhones per employee per month in revenues, and something like 4 iPhones in terms of profits.

 

This is a great partnership for both, because this makes IBM the preferred choice for services for any company which wants to have an iOS based stack, and it is great for Apple because it suddenly makes it as strong a player in the Enterprise as a Microsoft, at least from a perception perspective. Great partnership for the long term, but one that is unlikely to affect the numbers in the short term.

post #30 of 119

In no way is IBM looking to have an iOS window into the impressive amount of solutions that IBM is already selling based on DB2 / WebSphere and their AIX and Mainframe business, where these companies already have all their data.

 

Nope.  That's not what their after at all.  They certainly aren't using this as a play to keep people from moving to Oracle or Microsoft.

 

 

(the previous post may have been drenched in sarcasm.)

post #31 of 119
Quote:
Originally Posted by sog35 View Post
 

 

You are absolutely wrong.

 

This IBM deal could setup a huge movement to electronic payments with TouchID/iBeacons.  IBM does a ton of POS systems for massive companies.  That one aspect alone would move the needle.

All due respect to Blasty...I agree with you on this sog. IBM has the cred. to go into any firm and say everyone should have an iPhone, iPad and Mac today and it would increase efficiency 10x's within a week.

post #32 of 119
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post #33 of 119

How is this turd still employed when his forecasts have been wrong so many times? 

post #34 of 119
What's incredibly annoying is Wall Street keeps moaning about Apple needing new product categories, new revenue streams yet the only thing that seems to move the stock is iPhone. Apple announces this huge deal with IBM and Wall Street basically shrugs. Stock up less than 1%. 1rolleyes.gif
post #35 of 119
Every garden needs a little rain to flourish. Muenster has a point of view worth consideration. It is probably, however, a major turning point in Apple's development towards being THE major developer and supplier of business and lifestyle information systems and hardware. Apple is already in the systems game. When you buy an Apple computer, iPad or iPhone, you aren't just buying a box, you are buying into a whole system. A doorway into the 21st Century info tech world.
post #36 of 119
Many here are missing the point. It's not about the hardware. It's about the "Enterprise" software. Imagine the possibilities of Apple becoming involved in IBM's ecosystem.
post #37 of 119
Quote:
Originally Posted by Rogifan View Post

Wall Street obviously doesn't think this deal impacts Microsoft. As of this morning Microsoft stock is up more than Apple and almost as much as IBM. A good quarter from Intel trumps Apple's announcement.

 

This is monthly OPEX.

 

Expect the stock to test $100 next week

post #38 of 119
Quote:
Originally Posted by Constable Odo View Post
 


I kind of suspected that Wall Street would play down this deal.  I'm starting to believe that there isn't anything Apple can do to significantly move the share price the way Google, Amazon or Netflix would move. 

 

Apple is up 57% last 12 months

Apple is up 20% YTD

 

Goog  is up 29% last 12 months

Goog  is up 7% YTD

 

AMZN is DOWN 10% YTD

 

but go ahead and keep spewing your non sense

post #39 of 119
Quote:
Originally Posted by sog35 View Post

You are absolutely wrong.

This IBM deal could setup a huge movement to electronic payments with TouchID/iBeacons.  IBM does a ton of POS systems for massive companies.  That one aspect alone would move the needle.

Agreed, plus there's a major push into digital data and patient access through portals coming to the US health system soon. I have to believe this will help Apple and I suspect Oracle also favors Apple of they who shall not be named.
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Long on AAPL so biased
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post #40 of 119
Quote:
Originally Posted by greatrix View Post

Every garden needs a little rain to flourish. Muenster has a point of view worth consideration. It is probably, however, a major turning point in Apple's development towards being THE major developer and supplier of business and lifestyle information systems and hardware. Apple is already in the systems game. When you buy an Apple computer, iPad or iPhone, you aren't just buying a box, you are buying into a whole system. A doorway into the 21st Century info tech world.

Gene Munster is more like a swarm of aphids.

Proud AAPL stock owner.

 

GOA

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Proud AAPL stock owner.

 

GOA

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