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CNET News: IBM and Apple Chip Competitors? Not Quite

New York partner John Siegal was quoted in a November 25 CNET News article, "IBM and Apple Chip Competitors? Not Quite."

The focus of the article is the case of Mark Papermaster, who is being sued by IBM for violating the terms of a noncompete agreement (signed in 2006), by accepting an offer to run Apple's iPhone group in October. Papermaster's lawyers argue that since the only overlapping product between Apple and IBM—servers—is one that wouldn't be part of his official duties at Apple, and since he won't be running Apple's P.A. Semi chip design team, the noncompete shouldn't apply.

According to the article, despite the fact that Apple has yet to produce an iPhone chip based on its own design, and that IBM doesn't design smartphone chips, the judge overseeing the case views the two companies as chip competitors.

The issue appears to be competition, according to the article. IBM's position seems to be that even though it doesn't appear to have a single customer for the unspecified processors suitable for mobile computers, IBM is a potential SoC supplier for Apple's iPhone who could be shut out because Papermaster could improve Apple's P.A. Semi team by sharing trade secrets regarding an architecture that Apple does not appear to be planning to use.

According to Siegal, it is a bit surprising that Apple waived its right to an evidentiary hearing that would have allowed it to challenge certain parts of the declarations filed by IBM.