Apple 2.0

Covering the business that Steve Jobs built

Mark Papermaster should be happier at Cisco than he was at Apple

November 13, 2010: 2:23 PM ET

In many ways, the networking giant is a better fit for the 26-year IBM veteran

Papermaster. Photo: Apple Inc.

Last week wasn't a total disaster for Cisco (CSCO) -- which got a $29 billion market cap haircut Tuesday after a disappointing earnings call that brought much of the market down with it.

On Friday we learned that Cisco had hired Mark Papermaster, the veteran chipmaker who was famously pried away from IBM (IBM) by Steve Jobs two years ago -- a high-profile talent raid that triggered a Federal injunction -- and then summarily dismissed in August.

We may never know exactly why Papermaster left Apple (AAPL) after only 15 months as head of its iPhone and iPod division, succeeding the flamboyant Tony Fadell. There was widespread speculation at the time that he might be taking the fall for Antennagate.

But according to sources who spoke off the record to the Wall Street Journal, Papermaster never really found his footing in Apple's high-wire corporate culture. And he never quite hit it off with Steve Jobs. (See here.)

John Chamber's Cisco should be a much better fit.

For one thing, Papermaster's new job -- managing the team that builds Cisco's ASICs (application specific integrated circuits) for its Catalyst and Nexus 7000 switching lines -- plays to his strengths. He started at IBM designing microprocessors and spent 15 years working on its PowerPC architecture before heading up IBM's blade server division.

At Apple, he was put in charge of two lines of consumer hardware -- iPhones and iPods -- that couldn't be flashier or more high-profile. He also answered directly to Jobs, who as it turned out was MIA when Papermaster arrived in Cupertino.

"Papermaster started his position," the Journal reminds us, "while Mr. Jobs was on sick leave to receive a liver transplant during the first half of 2009. At the time, executives had more autonomy to make decisions, so Mr. Papermaster was likely ill-prepared when Mr. Jobs, who is known for his hands-on management style, returned."

He should be more comfortable with John Chambers, who spent six years at IBM and eight years at Wang before joining Cisco in 1991. Like Big Blue, Cisco serves enterprises, not consumers. The two companies have similar corporate cultures, and they formed an alliance when Cisco bought IBM's networking division in 1999. As part of the deal, IBM Global Services resells Cisco's products.

After Papermaster left Apple, Gleacher & Co's Brian Marshall described his problem in Jobsian terms: "At the end of the day," he told the Guardian, "it might have been that he didn't have enough T-shirts and blue jeans in his closet."

That shouldn't be a problem at Cisco.
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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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