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Can Apple compete in the corporate arena?

No sooner had I pressed the Publish button on my article about the iPhone, did Information Week run a cover-page article on why Apple is going to stay an also-ran in business technology.

Since I am a person who typically sees the glass as half full, and after a few moments of doubt, I decided that eventually Apple would become a significant player on the business side.

But OK, let's give Information Week the benefit of the doubt and see why they don't think Apple can make it.

The Objections

In its first salvo, the article cites the following negatives of the iPhone: "The iPhone's drawbacks include a relatively slow data network, a closed OS X platform that will limit available applications, exclusivity to the Cingular network, and, at $500, a shockingly high price tag."

Then, the writers also fault the truly evolutionary "music and video" capabilities of the iPhone by noting that corporations will not want to give their employees a device that will tempt them to goof off (i.e. play games, listen to music and connect to YouTube.)

The article also questions whether Apple has the right mindset for truly going after the business market. Here is a sample: "Done right, the iPhone could give Apple better footing in business technology environments. After all, the company sells laptops, desktop computers, servers, storage, and software for the enterprise, and its brand has never been stronger. But there's no indication Apple will seize that opportunity."

There's more. The touch screen itself is called into question by claiming that people will make too many typing mistakes and that it will be hard to convert people who have already become adept thumb typists (Treo or Blackberry).

More importantly, "one of the main corporate qualms with the iPhone will be its lack of software flexibility. Apple is locking down the device; only applications Apple approves can be installed."

Other problem/missing feature areas mentioned are:

  • data encryption
  • remote wiping of a lost device
  • enterprise policy enforcement
  • connectivity to Windows PCs
  • synching with Microsoft Outlook

Finally, and from my point of view a left-handed complement, we get this: "There's reason to suspect the iPhone's business impact could be similar to the Mac computer's: much admired, indispensable for visually intensive niches, but not the mass-market tool on which companies run."

My take:

So, let me take on some of these issues.

First, it is true that a slow data network may hinder business adoption. This, however, remains to be seen and will partly depend on the level of immediacy needed for downloads and uploads. For example, in an SFA environment, videos can most likely be downloaded "off hours" while information searches will need to be done in near real-time. So, the iPhone will need to demonstrate that it can do this in time frames that a user considers acceptable. Longer term, it is likely that the iPhone will support faster transfer protocols.

On the OS front, while it is true that the iPhone runs the MAC OS X operating system, that should not pose a serious problem. After all, why is the OS all that important anyway. With the wider use of XML and other messaging standards, software developers will not have too much trouble implementing whatever apps are needed. And, if you can believe the shootouts, the Mac OS is better than the Windows OS, including Vista.

While Cingular made a large investment co-developing the iPhone with Apple, there is no indication that Apple has an exclusive relationship with that company. You have to start somewhere and the features that had to be delivered needed this level of cooperation. In time, expect that the iPhone will also be available from other carriers.

As to price, even the article cites that this may not be a problem for business people or corporations. If the device delivers the goods, companies will be ready to pay a premium. The wide use of Blackberry devices proves this. Then, and as other carriers pick up the iPhone, we can expect that prices will drop significantly especially if tied to multi-year usage contracts.

The argument that companies will not want to give an iPhone to employees because they will use it for many things other than business rings hollow. After all, there is nothing to stop people from visiting porno sites or playing solitaire on their PCs or laptops. This has not stopped companies from issuing these devices. I suspect that corporate and IT management will focus more on business value to be derived from the iPhone including its music and video capabilities.

Further, it is pretty lame to cite that people who now use tactile thumb typing will not want to switch to a touch-screen keyboard. After all, nobody really was happy to learn thumb typing in the first place. It was a necessary evil if you wanted to take advantage of a device that fit into your shirt pocket. The same will be true of the iPhone.

When all is said and done, I am more concerned about the issue of software certification. Software companies, unless they are fairly large and have a lot of clout, will not want to go back to Apple to get permission to run their software on this device. If this caveat is true, I hope that Apple drops it real fast. Perhaps a better method would be to allow all new apps to run on the device (no questions asked) and then submit it to Apple for a friendly and cost-free review. Apple could then send back a certification or suggest the changes that would be needed to get the certification. In the final analysis, it should be the marketplace that decides whether an application is worth the bother or not.

Summary:

Going back to my initial reaction, while it is right for a publication to raise issues that both a vendor and the public should consider, it is by no means clear to me that Apple can't or won't succeed in the corporate world. Only time will tell.

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