In July of 2014 two former competitive rivals, Apple and IBM announced a strategic alliance targeted to provide more mobile-based apps and other applications for business enterprises. At the time, Apple CEO Tim Cook indicated: “This is really a landmark deal”. Over 100,000 IBM consultants would be positioned to promote new mobility based business applications, and the alliance was billed as a potential win-win for both firms.

The apps themselves were to draw on IBM’s computing services including security, device management and big-data analytics. The alliance called for Apple and IBM engineers to jointly develop more than 100 new business applications tailored for specific industry needs.

In December, both companies jointly announced an initial set of 10 IBM MobileFirst apps for use with Apple iPhone and iPad products, targeted for specialized needs in air travel, banking, insurance, field service, law enforcement and retail settings.

The July alliance announcement further called for Apple to release a larger, business enterprise version of its iPad tablet, one with a larger screen size with potentially PC-like features.  The timetable for the release of the larger iPad at the time was hinted to be in Q1 of this year.

The Wall Street Journal, citing supplier and other familiar sources, reported that the larger 12.9-inch iPad, originally slated for production ramp-up this quarter, will now have volume production pushed back to the second-half of this year. According to this report, design teams are still considering additional product design changes that could possibly include higher capacity USB 3.0 ports for data synchronization between the tablet and other computing devices, along with keyboard and mouse ports. Apple, of course, declined to respond to the WSJ regarding its report.

From our Supply Chain Matters lens, the types of design changes described do not seem to correlate with such a shift in the overall time-to-volume milestone. We suspect that there are other design, line-of-business or functionality issues being worked.  In past NPI cycles, design and volume yield of a new, larger LCD display have tended to be challenges for suppliers. With the presence of an alliance partner with its own vested interests, we all know that program politics can come to the fore.

Apple’s overall iPad sales and market share continue to decline. Sales were down 18 percent in the December-ending quarter. Thus, it is rather important that Apple provides availability of the larger version as quickly as possible, especially in the light of the pent-up consumer demand that was demonstrated by the availability of the larger iPhone 6. But, there is consideration for the counter strategy, namely allowing the iPhone6 to continue to gain consumer market interest without the existence of another alternative option.

We wonder aloud if this is a market opportunity potentially lost.  New product introduction and supply chain time-to-volume are super critical in the highly competitive smartphone and electronic tablet segment.  When such delays are coupled with new mobile-based business applications, the stakes grow higher for both companies. Apple has traditionally catered to its loyal consumer market, where major product releases are time for the latter holiday buying quarter.  Business applications reflect a different buying cycle, more attuned to solving painful business and personal productivity challenges.  Catering to both segments implies different priorities and milestones in product lifecycle management, especially when two alliance partners are inserted into the NPI process.

Bob Ferrari