Firm Sees iPhone as Enterprise Security Token

A German software company says it’s developed an application that turns the Apple iPhone or the iPod Touch into the equivalent of a smart card for securing access to a desktop or notebook computer.

Charismathics, a player in cryptographic middleware, said it expects its iEnigma software to receive approval by Apple (NASDAQ: AAPL) for distribution on the company’s App Store by late April.

The $9.99 application software is currently in a beta test phase. Charismathics also plans to release a version for Windows Mobile devices later this year. The company says it’s targeting both small-to-midsized businesses as well as larger enterprise companies.

The iEnigma application is designed to turn the iPhone into the second half of a two-factor
setup. In two-factor authentication, data or applications are secured using a pair of protection methods. For instance, a typical scheme could involve a password coupled with a hardware-based means of authentication, like a smart card or security token.

In this case, once users log into iEnigma, the software turns the iPhone or iPod Touch into the second factor. The result, Charismathics said, is a low-cost way for businesses to enable better security.

“How many laptops have been lost or stolen at airports each year — hundreds of thousands? iEnigma automatically secures access to your laptop,” Charismathics CEO Sven Gossel told “And we enable features that most computers have that aren’t being used, like encrypting your e-mail.”

Charismathics also makes clever use of the iPhone’s accelerometer. With the software installed and a Wi-Fi connection, users simply shake the iPhone to generate a digital key. The company said its software is compatible with Outlook, Entourage and other popular e-mail systems as well as all the leading browsers.

While analyst Roger Kay said he didn’t think iEnigma justifies the purchase price of an iPhone, he said it could be a useful, inexpensive addition to companies that already have iPhone users.

“Security is always best implemented in hardware,” Kay, president of Endpoint Technologies Associates, told “It’s a question of how much security you need. This sounds like something that could be a good, general-purpose solution. It’s another example of how the Apple ecosystem keeps extending. ”

“But I don’t know how well this will do in the U.S.,” he added. “Things like smart cards and other identity solutions are much better understood in Europe.”

Gossel said iEnigma represents a huge cost savings for companies that might otherwise deploy smart cards and smart card readers.

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