Papermaster denies breaking NCA in joining Apple

Mark's Papermaster's new role at Apple in no way represents a threat to IBM, according to new filings. Papermaster is to replace Tony Fadell at the head of Apple's iPod group, but has been accused of violating a non-compete agreement signed when he was employed by IBM, where he helped oversee chip design. In his formal response to IBM, Papermaster claims that Apple and IBM do not compete with each other, and that his hiring was not primarily based on his work with the latter company.

Apple allegedly began searching for a successor to Fadell in October of 2007, but was unable to find anyone it wanted within the consumer electronics industry. It then turned to hunting for any executive with strong technology skills, the main criteria being accommodation with the rest of Apple. Papermaster was suggested by Mac executive Bob Mansfield, but was described in a candidate list as "in every other way a long shot" except for his systems and semiconductor expertise.

Apple is in fact said to have been leery of Papermaster, instead offering him a job in designing notebooks; he claims to have declined due to lack of interest. The iPod position finally came about after the completion of the latest iPods, when Apple had more time to devote to hiring a high-profile executive.

The response controversially claims that chip designer PA Semi -- bought by Apple earlier this year -- is operating under the Mac group, rather than the iPod/iPhone section. This would appear to conflict with statements from Apple CEO Steve Jobs, who suggested that PA Semi would work on iPod and iPhone chips. Both Papermaster and PA Semi are linked through their involvement in PowerPC processors, and it is thought that Apple will eventually bring iPhone chip development in-house.

In driving home his argument, Papermaster says he will not be involved in developing iPod/iPhone processors, which will instead be "procured from sources outside my group." He instead expects to be a product manager, and suggests that the only product Apple and IBM share in common is servers. He will even have to learn the material he is responsible for while on the job, the filings note.

Papermaster could potentially be trapped by the fact that in managing iPhone creation, he will be asked to help choose which processors should be used.

Filed under: Investor, Apple
Other story tags: IBM, PA Semi, jobs, PowerPC