Global CIO: The Year Of iPad: Apple Booms In Business And In China - InformationWeek

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Government // Enterprise Architecture
07:04 PM
Bob Evans
Bob Evans

Global CIO: The Year Of iPad: Apple Booms In Business And In China

With 40,000 iPad-specific apps available, most of the Fortune 100 deploying iPads, and its China business soaring, Apple is becoming a huge force in enterprise IT.

"But we're already seeing tremendous interest in iPad from education, and much to my surprise, from business," said Jobs in Apple's mid-October earnings call.

"We haven't pushed it real hard in business, and it's being grabbed out of our hands. And I talk to people everyday in all kinds of businesses that are using iPads, all the way from boards of directors that are shipping iPads around instead of board books, down to nurses and doctors in hospitals and other large and small businesses," he said.

"So the more time that passes, the more I am convinced that we've got a tiger by the tail here. And this is a new model of computing which we've already got tens of millions of people trained on with the iPhone. And that lends itself to lots of different aspects of life both personal, educational and business.

"So, I see it as very general purpose, and I see it as really big. And the timing, one could argue about the timing endlessly, but I don't think one could argue that it's going to happen anymore."

6) For business applications, do you still think the iPad's an outlier, a fringe device, a toy for fancy-pants executives with nothing better to do than bother IT with their demands for the latest frilly toys? Sorry to burst your out-of-touch bubble, but the iPad's rapidly becoming a mainstream business device: in that same earnings call, Apple said that 65% of the Fortune 100 were already "deploying or piloting" the iPad. Among big corporate users cited by Apple were Procter & Gamble, Loews, Hyatt, NBC Universal and Novartis.

7) Apple is cranking up its wildly successful retail-store operations across the globe, which will extend the Apple phenomenon in general and give rise to more of the business oriented Briefing Rooms outlined above in #4. Said Apple in its earnings call: "In total, we expect to open 40 to 50 stores in our fiscal 2011, with over 50% of them outside the United States.

"We will also begin replacing several stores in the United States to get them right-sized for Apple's current product line and to meet our service goals." Somehow, I don't get the idea that any of those "right-sizings" will result in smaller stores—and did you catch the emphasis on "meeting our service goals"? That's Apple's way of saying it will keep its customer-experience scores high in spite of the company's staggering growth, while also beefing up different kinds of service for business customers as well.

8) Apple's extending its sales force to help meet the surging demand from businesses, said COO Tim Cook on that earnings call: "And I don't know about you, but I've never seen an adoption like this in my life in enterprise. Enterprise is historically much slower moving on adoption. . . . And so the early data points look great. And as a matter of fact, we have built and are building additional capacity internally in the sales organizations to call on businesses."

9) Apple is carefully broadening distribution channels for the iPad, complementing its consumer and SMB expansions via the Wal-Mart and Target chains as well as Verizon and AT&T stores, with a business-oriented plan via AT&T's sales force that includes pre-paid plans, Cook said.

"We're also enabling in training our carrier partners to do the same. You probably saw an announcement last week with AT&T, and that's a direct result of customers wanting to buy the iPad on a postpaid type plan. And so we're putting a lot of energy in those." (You can find more detail on that AT&T deal here.)

10) Jobs has not taken Apple to the business market; rather, the business market has come to Apple. Call it the consumerization effect or whatever you want, but the plain and simple fact is that, as Jobs so aptly put it, Apple has "a tiger by the tail here." And in snagging that tiger, Apple didn't have to start up some skunkworks or acquire some arm's-length stranger or develop a loss-leader product that snatches market share while simultaneously tanking margins. Instead, it won the business market by doing what Jobs holds most dear:

"Our potential competitors are having a tough time coming close to iPad's pricing, even with their far smaller, far less expensive screens," he said during the earnings call. "The iPad incorporates everything we have learned about building high-value products from iPhones, iPods and Macs.

"We create our own A4 chip, our own software, our own battery chemistry, our own enclosure, our own everything. And this results in an incredible product at a great price. The proof of this will be in the pricing of our competitor's products which will likely offer less for more.

"These are among the reasons we think the current crop of seven-inch tablets are going to be DOA: dead on arrival. Their manufacturers will learn the painful lesson that their tablets are too small, and they'll increase the size next year, thereby abandoning both customers and developers who jumped on the seven-inch bandwagon with an orphan product. Sounds like lots of fun ahead."


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GlobalCIO Bob Evans is senior VP and director of InformationWeek's Global CIO unit.

To find out more about Bob Evans, please visit his page.

For more Global CIO perspectives, check out Global CIO,
or write to Bob at [email protected].

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