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iPhone Knocking on the Enterprise


Apple is crowing in the aftermath its 3G iPhone launch on Friday and the opening of its App Store, the download site for third-party iPhone applications, the day before.

The company said today that it tallied 10 million downloads from its App Store since late last week, and has sold one million 3G iPhones so far.

Amid this backdrop, Apple is pushing hard to get the iPhone into the enterprise and gain more market share with business users. In addition to the device's native capabilities and Apple's licensing of Microsoft's ActiveSync for tying in with Microsoft (NASDAQ: MSFT) Exchange for Outlook, enterprise IT gets access control and management.

Third-party vendors are rushing to offer enterprise applications for the iPhone. These range from database and CRM vendors to enterprise e-mail specialists, enterprise wireless synchronization, Outlook, hosted Microsoft Exchange Server, security, a managed IT infrastructure, to business intelligence (BI).

But despite the crush of vendors hawking their wares, support for the iPhone in the enterprise faces some stumbling blocks that could slow or hamper its march into the world of IT support, analysts and industry experts said.

The iPhone "is definitely competitive, but Apple has a lot of work to do," IDC analyst Ryan Reith told InternetNews.com. Why? Because it's not the end-user making the decision in this realm; instead, it's the IT team making that decision on support, and Windows Mobile and BlackBerry devices already have a very large footprint in the enterprise, Reith added.

Jack Gold, principal at J. Gold Associates, is also on record as doubtful that the iPhone is going to blitz its way into enterprise adoption anytime soon.

For one, applications have to be deployed through the Apple App Store, over Apple servers, and that's not acceptable for mission-critical and proprietary applications, Gold said.

Another objection is that application development requires knowledge of the Apple development environment, a burden enterprise IT may not want to add to its already heavy workload. "It's not difficult to develop applications on the Apple platform, it's that they're different and many IT organizations may not want to get into that," Gartner vice president and distinguished analyst Ken Dulaney told InternetNews.com.

Two other issues are based on the iPhone itself. One is that enterprises don't know how durable the device will be. That's important for budgeting reasons, as field failures of smart phone devices are costly when they're used by hundreds or thousands of staff. But one analyst called that a red herring, especially now that the price, at $199, is in the same price range as other enterprise-ready devices.

The second issue is that the battery cannot be removed or replaced by end users. Enterprise users who rely heavily on their smart phones often carry an extra battery out in the field, Gold said.

Other issues Gold raised include the availability of peripheral services such as personal organization and productivity application MobileMe to synchronize the iPhone to corporate desktops or laptops, because of security concerns.

Then there's the one-carrier issue. Enterprises generally have long-term company-wide contracts with carriers, and if their carrier isn't AT&T, they may be forced to sign individual contracts for iPhone users, which they may not want to do.

Slowing, but not stopping

All of these issues are hurdles, but temporary ones, experts said. (Apple did not respond to requests for comment.)

"We have a lot of customers who tell us that, as much as they don't want to support it, the CIO or some other C-level executive got an iPhone and told them to make it work," countered Sina Miri, director of product marketing and management at Apple partner PostPath. "It's not a matter of choice any more."

Corporate users want more than the simple e-mail access provided by the RIM (NASDAQ: RIMM) BlackBerry, said Miri, whose company offers a Linux-based, non-Microsoft e-mail server that offers drop-in/native interoperability with Microsoft's Exchange server for Outlook. "Over the past few months, more and more users want ActiveSync devices, from Motorola (NYSE: MOT) or Nokia, (NYSE: NOK) because the interface on the BlackBerry's tiny screen isn't good enough and because they offer more services than e-mail," he added. "Then the iPhone arrived."

And it comes with enterprise-ready functions. It offers built-in support for Microsoft Exchange ActiveSync, and supports Word, Excel, PowerPoint, PDF, JPEG and iWork files. Also, enterprises can build custom applications with the iPhone software development kit (SDK) and deploy them through the Apple Apps site to authorized iPhones.

In addition to making the iPhone enterprise-capable, Apple has posted a new application on its site that helps manage iPhones in the corporate environment, the iPhone Configuration Utility. And its site has a phone number for an AT&T program for enterprises that want to buy the iPhone.

However, a call to the number revealed a few problems. For one, the iPhone is sold out, and the sales representative told InternetNews.com that Apple has run out of the devices and even if they were ordered today they will not be shipped for 10 to 14 days.

Further, businesses are limited to ordering three iPhones a day or a total of nine a week. Businesses will not be allowed get around this by ordering three a day every day of the week because "they can't get more than nine a week," the representative said, adding that the billing and shipping addresses must be the same.

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