Apple

Apple CEO: IBM tie-up will drive business iPad penetration

Tablet penetration is only at 20% of the enterprise. Apple hopes its new IBM tie-up will drive that number higher.

Apple and IBM
 Image: Apple

Apple announced today that it sold 13.3 million iPads in the second quarter, down more than 1 million units from the same quarter last year. Still, Apple has sold 225 million tablets in four years, an impressive figure by any measurement, particularly considering the questionable state of the tablet market when Apple first launched the device.

Tim Cook has said for several years that he believes the global tablet market will eventually surpass the global market for personal computers and, though that is a ways from happening, he believes Apple's new enterprise partnership with IBM will drive iPad adoption significantly.

On a conference call with analysts, following Apple's quarterly earnings announcement, Cook noted that while Apple's market share in the commercial tablet market is strong at 76%, overall tablet penetration in the enterprise is only at 20%. In comparison, notebook penetration in business exceeds 60%. To Cook, this lack of tablet usage is a golden opportunity and is a large part of why it partnered with IBM.

"We think that the core thing that unleashes this is a better go-to-market which IBM clearly brings to the table, but even more importantly, apps that are written with MobileFirst in mind. Not all, but many of the enterprise apps that have been written for iPad have been, essentially, ports from the desktop and haven't taken full advantage of mobile."

Cook goes on to note Gartner projections claiming that the tablet market will be 350 million units per year, while the PC market currently tallies 315 million units per year.

With the IBM partnership -- which is notably lacking in implementation details -- Apple believes it can get iPad adoption in the business sector "moving in a faster trajectory," according to Cook.

For business customers, expect both Apple and IBM to roll out new platforms, apps to make life easier for iPhone and iPad users, and IT departments to manage larger deployments. On the earnings call, Apple barely mentioned its retail stores, but both company executives brought up the enterprise frequently.

Unfortunately, it seems that both Apple and IBM are playing their cards close to the chest on how the partnership will actually work, and we will all need to wait until at least this fall for more details.

Separately, one analyst asked if Apple was planning to get more into the big data and analytics spaces, but Cook noted that both Apple and IBM have revenue streams in the enterprise, and both companies win if the other is more successful.

"We win if we can drive the penetration number from 20 to 60," Cook explained. "That would be incredibly exciting here. The walls would shake. That's what I hope for."

What percentage of your company uses tablets compared to notebooks and desktop PCs? Let us know in the comments below.

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About

Jordan Golson is an Apple Columnist for TechRepublic. He also writes about technology and automobiles for WIRED and MacRumors. He has worked for Apple Retail twice and has been writing about technology since 2007.

1 comments
adornoe
adornoe

Tablets will NEVER get to 350 million in sales per year, but, if they do, they will have become PCs, like the Surface Pro 3 is a tablet and a laptop ( and now, even a desktop). Nevertheless, tablets like the current iPads, won't be selling even close to 100 million per year.  Apple is basing their hopes on predictions made when the tablets were a hot item, especially the iPads.  That is no longer true, and new predictions need to be made that take the new playing grounds into considerations, where the players are no longer offering just the "simple" and crippled media consumption devices. 

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