Why Apple Is Expanding Mobility Partners for Enterprise Push
Apple Has Plenty of Growth Drivers up Its Sleeve to Fuel 2016
Apple has partnered with IBM and Cisco for its enterprise push
In the previous part of the series, we discussed how IBM (IBM) is helping Apple’s (AAPL) Mac sales, thereby helping Apple in making a successful push in enterprises. Apple has become serious about penetrating the huge enterprise market. Apple reported that it earned revenues of $25 billion from enterprises between June 2014 and June 2015 at a growth rate of 40%.
Apple entered into a long-term partnership with IBM last year, and then collaborated with Cisco (CSCO) in May this year. Along with IBM, Apple has released more than 55 apps in the “IBM mobile first for iOS” program. Some of the sectors that these apps are useful for are healthcare, financial services, industrial, and travel and transportation. These apps leverage Apple’s iOS9 and Watch OS 2 operating systems.
Apple’s share of the enterprise market is still only 4%
Apple’s partnership with IBM has helped it better penetrate the enterprise market. Building apps for enterprises and using IBM’s big data and analytics capabilities to improve productivity help the company provide attractive service to enterprises. Apple’s collaboration with Cisco will enhance the appeal of iPhones and iPads in enterprises, as the devices will be integrated with Cisco’s network systems. In other words, companies that run on Cisco’s Internet networks will be able to transfer content securely and quickly to iPhone and iPad devices.
All in all, Apple is now working with more than 75 mobility partners. However, Apple is still just scratching the surface when it comes to the overall enterprise market. According to a report from Benzinga citing Global Equities Research, the enterprise device market is a $360 billion per year opportunity and enterprise software is a $285 billion per year opportunity for Apple.
Thus, $25 billion in enterprise revenues for Apple is only 4% of the overall enterprise market. It also represents ~11% of Apple’s overall revenues, which is considerably less than 50% of the overall revenues that Microsoft (MSFT) earns from its enterprise business. To gain diversified exposure to Cisco, you could invest in the Technology SPDR ETF (XLK). XLK invests 3.2% of its holdings in Cisco.
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