Having a good consultant which has better resources, talent pool and global reach is much more effective in securing deals. It seems that Apple Inc. (AAPL - Free Report) has learned it well and therefore, entered into a new partnership with the world’s leading consultancy firm — Accenture Plc (ACN - Free Report) — to develop iOS applications (apps) for the enterprise community.
Per the agreement, the two companies will create a mixed team of designers, programmers, and other Apple experts within Accenture Digital Studios’ units in select locations around the world. The team will focus on developing tools and services for building iOS apps, as per the requirements of Accenture’s clients across different industries.
This will help Accenture’s clients integrate the iOS devices to connect to their back-end systems, ease transfer of legacy apps and their data to iOS, and take data from IoT devices on iOS.
Apple Expanding Partner Ecosystem
Accenture is the fifth company with which Apple has tied up to create innovative business solutions for iOS. The strong adoption of iPhone by both the retail consumers and enterprises has been a game changer for the company over the last decade.
Since 2014, Apple has focused on penetrating the enterprise business. Growing demand for applications that can help enterprises in better engaging with customers helped the iPhone-maker to gain traction.
International Business Machines (IBM - Free Report) was the first tech giant with which Apple partnered, in order to develop industry-specific iOS apps. The very next year it partnered with Cisco (CSCO - Free Report) , followed by its collaborations with SAP SE (SAP - Free Report) and Deloitte in 2016.
Notably, Apple stock has gained 41.7% year to date, outperforming the 39.9% rally of the industry it belongs to.
Win-Win for Both Tech Giants
The recent alliance will prove to be beneficial for both companies, in our opinion.
Accenture helps organizations in digital transformation. The company has a huge number of tech consultants operating across more than 40 industries. Therefore, the addition of Accenture as a partner will help Apple in reaching out to a large customer pool and simultaneously utilize the former’s expertise to further push into the enterprise marketplace.
Going ahead, it should be noted that currently, Alphabet’s (GOOGL - Free Report) Android-based operating system smartphone has a market share of 85%, while iOS has only 14.7%, per the latest report of IDC. Despite this, Apple has managed to maintain its dominant position in the enterprise-app developing community due to the aforementioned partnerships, as well as its superior features over Android like safety, reliability and easy integration across platforms.
Apart from this, expanding into the enterprise market will bode well for the company, given the higher margins compared with retail offerings.
Furthermore, it should be note that despite of having different composition in every partnership, all are centered at creating apps for enterprise employees. The idea is very simple, to turn iPhone and iPad into default devices for work. This will help Apple in selling more and more of these devices in the long run as enterprise employees have tendency to change these in one or two years.
Also, by providing better iOS experiences, Apple may win deals from organizations to make iOS as their default operating system. This would mean eating into Microsoft Corporation’s (MSFT - Free Report) Windows’ market share, which is currently the most preferred operating system by organizations. Obviously, it won’t happen in near-term, but certainly creates a possibility in the long-run.
On the other hand, the partnership will help Accenture in enhancing its digital transformation capabilities and bring in additional revenues. Apart from this, this will also facilitate the company in strategically competing with other consulting companies such as IBM, Dell and Deloitte.
Currently, Apple caries a Zacks Rank #3 (Hold), while Accenture has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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