New Alliance : IBM and Apple Officially Unveil Accord


International Business Machines and Apple Computer on Wednesday signed their wide-ranging cooperation agreement, a landmark accord that includes the establishment of two joint venture companies and extensive sharing of technologies.

The two computer firms, once bitter rivals, stunned the industry when they announced the outlines of the agreement in July. At a press conference here Wednesday, they spared no hyperbole in seeking to persuade skeptics that the alliance was now the centerpiece of both firms’ long-term strategies.

Apple Chairman John Sculley declared that the alliance would bring about “a renaissance in technical innovation,” one that would provide customers with far more choices in the future while protecting current computer investments. Both Sculley and IBM President Jack Kuehler emphasized that the technologies developed by the two companies would be licensed to other firms in an effort to create a broad new set of advanced computer hardware and software standards.


The two companies disclosed that the first new computer will emerge from the alliance two to three years from now, and it will be based on a new version of a software operating system called Unix. The software will combine the Unix systems already produced by each company, and will also be able to use software written for the Apple Macintosh.

IBM and Apple also said that they would create two joint venture companies, one to create a new type of software operating system and another to develop technologies for integrating sound, pictures and video into computers. Dubbed Taligent and Kaleida, respectively, both will be located at undetermined sites in the Bay Area.

Although Apple created the first widely popular personal computer and IBM dominated the PC business through most of the 1980s, both companies have suffered in recent years as software vendor Microsoft and chip-maker Intel have become the standard-setters in the industry. Analysts view the alliance as a plausible strategy for Apple and IBM to reassert control over the direction of the industry, and perhaps boost a sagging PC market with new technology.

“This gives them a chance of wresting control from Microsoft and Intel,” said Richard Shaffer of Technologic Partners in New York. “But it’s a big task.”

In the short term, the agreement will make it easier to integrate Apple’s Macintosh personal computer into corporate computer networks that have traditionally been laden with proprietary IBM equipment.

But most aspects of the agreement focus on long-term projects that will not yield products for at least two to three years, and in some cases much longer. While most analysts have now been persuaded that Apple and IBM--with their contrasting corporate cultures--will in fact be able to work together, they note that three years can be a virtual eternity in the fast-changing computer business.


In addition to the links between Apple and IBM, the alliance also involves Motorola, which will produce a family of high-powered microprocessors, or computers-on-a-chip, based on an IBM design. The chips will form the core of future desktop computers from Apple, IBM and possibly other companies.

The Unix computer that the two firms plan to produce two to three years from now will use the Motorola chip and a new version of the powerful Unix system, which has been popular in the technical world but has made only limited inroads into mainstream computing. One version of the machine will be designed for power-hungry technical applications, another will be targeted at mainstream business users, and other computer vendors will be able to license the hardware and software technology. But though the systems will be able to run Macintosh software, Apple Chief Operating Officer Michael Spindler emphasized that they will not be true Macintoshes.

At the same time, Apple will work to create more powerful versions of the Macintosh that use the IBM/Motorola chip technology. IBM will use the new chips for Unix systems, but plans to stick with Intel microprocessors for its mainstream PS/2 personal computers, according to William Filip, president of IBM’s advanced workstation division.

In the long term, both companies aim to sell computers that use the new chips and an entirely new operating system being developed by Taligent, one of the two joint venture companies. This new software, based on an existing Apple project called Pink, will use an “object oriented” software technology, which makes machines more versatile and easier to program by bundling groups of separate functions into easy-to-grasp packages, or objects.

But the Taligent software will not be ready until mid-decade, and Microsoft and other companies are also hard at work on object-oriented software.

The other joint venture company, Kaleida, will focus on developing a set of technologies for “multimedia,” the buzzword that refers to the integration of sound, pictures and video into computers. Both companies are licensing their multimedia technologies to Kaleida, which aims to produce specifications for a range of multimedia machines that will then be manufactured and marketed separately by the two firms.

Taligent will have a staff of 300 to 400 people, and Kaleida will have 200 to 300 people. IBM and Apple would not disclose details of the management structure or the financing plans. IBM and Motorola will have about 300 people working on the chip project at a Motorola facility in Austin, Tex. All the agreements are still subject to Federal Trade Commission antitrust clearance.

(Southland Edition) What the IBM-Apple Deal Means Under agreements, Apple Computer Inc. and International Business Machines Corp. will:

Make it easier for their computers to be linked in networks and communicate with each other. Products to make this possible will be available as early as December, the companies said.

Produce new computer operating system software that will work on both companies’ high-powered desktop computers called workstations. An operating system is the base layer of computer software. This software will combine IBM’s software used on its workstations with Apple’s easy-to-use Macintosh screen graphics. It will be ready in “two to three years” and will be available to other companies under license, Apple and IBM said.

Form a joint-venture company to develop an operating system based on “object-oriented” programming, a new technology that makes programming computers easier by allowing programmers to reuse chunks of software code from one program to the next. This operating system will work on many computers, regardless which microprocessor powers them. It will be based partly on work Apple has undertaken for the past three years, code-named Pink.

Form another joint-venture company to develop technology for “multimedia” computers, or those that mix text, sound, graphics and video.

Work with Motorola Inc. to miniaturize IBM’s microprocessor used in its workstations. This microprocessor, based on an advanced technology called reduced instruction set computing, or RISC, would be used in future Apple and IBM PCs and workstations.