Apple 2.0

Covering the business that Steve Jobs built

Apple's Papermaster was misquoted

November 9, 2008: 11:28 AM ET

IBM headquartersMark Papermaster must know how Barack Obama, John McCain and, for that matter, Sarah Palin feel when they get shafted by the press.

The 25-year IBM veteran engineer is in the middle of a nasty civil case in which his former employer has sued to stop him from taking a new position in Steve Jobs' inner circle as head of Apple's iPod and iPhone division.

IBM (IBM) is trying to enforce a non-compete contract Papermaster signed in 2006. Apple (AAPL) is trying to get around it. The case is being heard in U.S. District Court in the Southern District of New York.

On Friday, Papermaster filed a declaration with the court, arguing that IBM and Apple are in very different businesses. That afternoon, a reporter for Information Week plucked this quote out of the 27-page statement and ran with it:

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

The quote echoed through the blogosphere. Grizzled tech writers, including this one, treated it with various degrees of derision and incredulity. (See here, here and here.) How could anyone who joined IBM in 1982 possibly forget that Apple and IBM spent much of the 1980s locked in mortal combat for dominance of the PC industry -- an iconic competition that spawned one of the most famous ads in TV history, Ridley Scott's "1984"?

Well, we all owe Mark Papermaster an apology.

It turns out that his quote was taken out of context. What the Information Week reporter left out of his story on Friday [it was updated on Sunday] was the part where Papermaster acknowledged that before IBM sold its PC business to Lenovo, and when Apple sold servers to schools, they did in fact compete. The full quote reads:

"Until this litigation effort by IBM, aside from the divested IBM personal computer business and a single sale several years ago of Apple's Xserve product to a university, I do not recall a single instance of Apple being described as a competitor of IBM during my entire tenure at IBM." [PDF]

Papermaster's statement goes on to describe -- under penalty of perjury -- the reluctance with which he received Apple's overtures, the deference he showed his superiors at IBM, his caution to avoid even the appearance of impropriety (he left everything in his office except textbooks and memorabilia), and the respect IBM showed him for his integrity (rather than escorting him out of the building immediately -- standard practice in Silicon Valley -- they let him work in his office for nearly two weeks after giving notice).

Whatever Steve Jobs' motives for hiring this guy -- be it to run the iPod division or, as IBM fears, the chipmaking operations at P.A. Semi -- Papermaster seems to be playing it straight.

On Friday, the court granted IBM preliminary relief and ordered Papermaster to immediately stop working for Apple. His lawyers have until Tuesday to register their objections. A hearing is scheduled for Nov. 18.

See The Papermaster chronicles for a timeline of events.

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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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