Apple 2.0

Covering the business that Steve Jobs built

New iPod chief: Apple and IBM were competitors (update)

November 7, 2008: 6:08 PM ET

Big Brother still

UPDATE: Reading Mark Papermaster's statement in full, I discover that it had been taken it out of context. The full quote, reproduced at the bottom of this post, makes a lot more sense. My apologies to Mr. Papermaster.

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"I do not recall a single instance of Apple being described as a competitor of IBM during my entire tenure at IBM."

I did mental double take when I read those words, and I suspect I was not alone.

They were filed in a U.S. district court in Manhattan early Friday by Mark Papermaster, a 25-year IBM veteran and, as of Tuesday, Apple's newest senior VP.

Papermaster is stepping into the spot recently vacated by Tony Fadell. (See The man who made the iPod.)

IBM had filed suit to block the move, claiming that Papermaster was violating "his contractual obligation to refrain from working for an IBM competitor for one year."

Papermaster's response was that IBM (IBM) doesn't compete with Apple (AAPL) and as far as he knows, it hasn't for the past 25 years.

Huh? That's news to me -- and I suspect it will be news to Steve Jobs.

I remember 1983. The IBM PC was two years old and the Apple II and III were rapidly losing market share. The Lisa came out that January, but was destined to be a commercial flop.

Jobs, who had been kicked out of the Lisa project the year before, was pouring his energy into the Mac, which would debut the following year, heralded by the famous "1984" commercial.

Jobs certainly seemed to know who his competition was. That fall, when he previewed the so-called Big Brother ad in a keynote address, he introduced it with these words:

"It is now 1984. It appears IBM wants it all. Apple is perceived to be the only hope to offer IBM a run for its money. Dealers initially welcoming IBM with open arms now fear an IBM dominated and controlled future. They are increasingly turning back to Apple as the only force that can ensure their future freedom. IBM wants it all and is aiming its guns on its last obstacle to industry control: Apple. Will Big Blue dominate the entire computer industry? The entire information age? Was George Orwell right?" (link)

I know IBM is an enormous company with many large divisions, and that for most of his career, Papermaster worked on silicon chips and servers, not PCs.

And I know that it's been several years since IBM competed in consumer electronics, having sold its Personal Computing Division to Lenovo in 2005.

But to think that Mark Papermaster could have started at IBM in 1983 and worked there a quarter century without ever once hearing Apple described as a competitor -- well, it boggles this tech reporter's mind.

UPDATE: 9to5 Mac reports that in a filing made public after markets closed on Friday, U.S. District Court Judge Kenneth Karas ordered Papermaster to "immediately cease his employment with Apple Inc. until further order of this court."

For the latest on the case, see The Papermaster Chronicles.

[Kudos to Information Week's Paul McDougall for spotting the court documents. You can read more of Papermaster's statement here.]

UPDATE 2: It turns out that Paul McDougall led us all on a merry chase. Papermaster's full statement, copied below, acknowledges that IBM and Apple have indeed been competitors from time to time in the past.

Papermaster on competition

This reporter's mind is unboggled and his respect for Mr. Papermaster's integrity renewed.

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About This Author
Philip Elmer-Dewitt
Philip Elmer-DeWitt
Editor, Apple 2.0, Fortune

Philip Elmer-DeWitt has been following Apple since 1982, first for Time Magazine, and now on the Web for Fortune.com.

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