One of the most striking features of the proposed IBM Corp-Apple Computer Inc alliance is the small number of sources on the developments and the very patchy coverage as a consequence. Almost everything that has appeared in print has clearly been deliberately planted, so that although Reuters and Associated Press have both carried the fact that the announcement set for last Thursday had been put off indefinitely, both cited the New York Times story and had nothing to add – while readers of the Wall Street Journal on either side of the Atlantic, who were being told on Tuesday of last week that an announcement might come as soon as this Thursday are still in the dark – as of Friday the paper had carried nothing further on the subject. What does it all mean? Our source on the suggestion that IBM has agreed a full acquisition of Apple says that according to his information, as of the middle of last week, the plan to merge was still on. But any eventual acquisition by IBM of Apple requires an enormous number of people to be squared to the idea – from Apple’s naturally extremely hostile employees to the US Justice Department, which could still be the one insuperable stumbling block. Why is a deal of some sort with Apple so vital to IBM? The answer is that IBM owns the mainframe market, having to share it only with Amdahl Corp and Hitachi Ltd; it shares the proprietary mid-range market with Digital Equipment Corp – but the AS/400 business alone exceeds DEC’s entire turnover. On the desktop all it has is the pathetically unsuccessful OS/2 – and despite all the bullish noises it is making about OS/2 2.0 it cannot privately have any confidence that the thing will pull its chestnuts out the fire – and even if it is successful, IBM owns only a part of it because the more copies it sells, the more it finds it is fattening frogs for snakes – or the one that lives in Redmond, Washington, because even on OS/2 2.0, IBM will either have to buy OS/2 outright from Microsoft or continue to pay it royalties. The mainframe market has already gone ex-growth this year and there is no guarantee that it will ever recover the lustre it had even three years ago, and IBM is bright enough to realise that the grinding attrition caused by Unix and the irresistible attractions of open systems is likely to start taking its toll on the AS/400 by about 1995. At that point the only sectors of the industry that are still likely to be growing fast are multiuser Unix systems, where IBM is already so far behind that it has little chance of being more than an also-ran, and the desktop. And IBM owns outright nothing on the desktop. There is only one proprietary desktop environment that has any chance of still being a major force in 1995, and that is the Macintosh System. It may itself start suffering the decay inherent in proprietary systems, but with IBM as well as its present momentum behind it, that evil hour can almost certainly be postponed at least until the end of the decade. It is now almost certainly too late for something completely new to build up critical mass, but to assure its long-term future and prosperity, IBM needs to own outright a proprietary environment that sells in enormous numbers. The only game in town is Macintosh – and IBM surely cannot afford to lose the prize. Could it be that OS/2 2.0 is in part an effort to make the PS/2 more attractive, so that if Justice digs in its heels, IBM can agree to divest its personal computer business in return for being allowed to acquire Apple?
