Apple, Cisco Join Forces - What It Could Mean for Them, and the Rest of Us

By Paula Bernier September 02, 2015

Tech powerhouses Apple and Cisco systems this week announced they have joined forces to give business users of iOS devices the best possible experience – “a fast lane” as they described it –– on Cisco-powered networks. Apple iOS devices will also be optimized to work with Cisco’s conferencing and unified communications services as part of the deal.

This is big – and it could have far-ranging impacts for a lot of people and organizations.

For Apple, it could offer the ability to ramp up sales of its iPads, as well as its other endpoints. But the iPad part of the discussion is particularly important.

Momentum on the iPad front has been on the slide for some time now. Indeed, Apple in its third quarter earnings report for 2015 revealed that iPad sales have decreased another 18 percent year over year, and 23 percent from the same quarter last year. Today iPad sales account for just 9.1 percent of Apple’s revenues; last year in the same quarter they were 15.7 percent of revenues.

Apple CEO Tim Cook in July nonetheless defended the iPad as a strong product line with future upside. “I am still bullish on the iPad,” he said, adding that the “iPad upgrade cycle will eventually occur.”

The relationship with Cisco is not the company’s first effort to try to pump up iPad sales through the formation of partnerships.

In December Apple announced it has joined forces with IBM. That partnership brings IBM’s big data and analytics capabilities to iPad and iPhone users in the enterprise. Air Canda, Banorte, Citi, and Sprint were among the IBM clients announcing support for the IBM MobileFirst for iOS solutions at the time of the announcement.

“What we’re delivering aims directly at the new quest of business – smart technologies that unlock new value at the intersection of big data and individual engagement,” said Bridget van Kralingen, senior vice president at IBM Global Business Services, back in December. “Our collaboration combines IBM’s industry expertise and unmatched position in enterprise computing, with Apple’s legendary user experience and excellence in product design to lift the performance of a new generation of business professionals.”

Beyond that, the partners didn’t offer a lot of detail on what their alliance will mean in particular.

Image via Shutterstock

Apple also has been working with more than 40 companies – “many of them little-known makers of apps for accounting or sales presentations” as The Wall Street Journal put it – to push the iPad as a work tool and offer training on how it can be used for that purpose.

For Cisco, the relationship with Apple could expand the reach of its already popular conferencing and UC products services. Cisco in the second quarter reported a 12 percent revenue increase quarter over quarter and a 24.9 percent year over year increase in its enterprise videoconferencing equipment business, a category in which it is the leader. The offerings specifically mentioned in the Apple announcement were Cisco Spark, Cisco Telepresence, and Cisco WebEx.

The deal with Apple also could help cement Cisco’s long-standing leadership position in communications infrastructure at a time in which low-cost Chinese suppliers like Huawei and LTE, and newer software-centric competitors, are banging on the door.

As service providers like AT&T embrace network functions virtualization and software-defined networking they are pushing against vendor lock in and expanding their suppliers to include a broader array of companies. For example, although industry leaders Alcatel-Lucent, Cisco, and Ericsson are also in the mix, in announcing its Domain 2.0 suppliers, Andre Fuetsch, senior vice president of architecture and design at AT&T, said it also has certified “disruptors” Affirmed Networks, Brocade, and Metaswitch.

The Apple-Cisco also could, of course, have also wide-ranging impacts on business users – which is really what the partnership is all about.

The good news side of the story for business customers is a higher level of compatibility and performance between Apple and Cisco products. On the other hand, the partnership could create further opportunity for vendor lock in at enterprise customers. Already 95 percent of Fortune 500 companies used Cisco Collaboration and Cisco network solutions.

As a side note, Dean Bubley of Disruptive Analysis told me that the most interesting thing that jumped out to him about the partnership was Apple referencing Cisco Spark, which he says leverages WebRTC technology. This, he added, is the “first overt sign that Apple actually intends to at least play nicely with WebRTC apps.” The question, he added, is whether there will be platform-level support, or if it’ll just be wrapped up inside specific services.

Edited by Maurice Nagle

Executive Editor, TMC

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