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Why The iPhone Won't Make Apple A Player In Business IT

It will likely pressure smartphone rivals and corporate IT to provide better mobile computing. But it's unlikely to change the company's status as a runner-up in businesses
SPEED COULD BE A PROBLEM

Web surfing via the device's larger screen could be iPhone's meal ticket. That would seem to be an advantage as more apps are delivered as browser-accessible Web services. Apple promises Google Maps for directions and traffic maps, though there's no mention of GPS, which businesses would welcome. "If they can give a better Web experience, plus e-mail, the cost won't be such an issue because business can easily justify it," says IDC analyst Bob O'Donnell.

Yet Web browsing also reveals a major iPhone weakness. The device will work exclusively over Cingular's Edge data network, which is much slower than broadband. Rival Palm put the emphasis on speed last week, rolling out a Windows Mobile-based Treo 750 for Cingular's 3G network. Palm's Treo 700wx has been available for some time from Sprint on its 3G EV-DO network, and the Treo 700w from Verizon Wireless' EV-DO network. The iPhone works with Wi-Fi, though probably not for voice-over-IP calls.

The touch screen is the heart and soul of the iPhone. There's no BlackBerry-like keypad--instead a touch-screen keyboard can be called up when needed. Touch screens are used in other phones, too, but they're not universally loved. It's easy to mistype without the feedback of a click. Apple promises a better experience with patented new technology. But many businesspeople have gotten used to thumb-typing on small keys; giving those same users a touch-screen device "is going to be prone to disaster," says Hectus of Keesal, Young & Logan.

NO SOFTWARE FOR YOU

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. That will severely limit the availability of enterprise apps for iPhone, and Jobs didn't mention other big business needs like data encryption, remote wiping of a lost device, or enterprise policy enforcement. Business users also will want to understand the iPhone's connectivity to Windows PCs, and the ability to sync with Microsoft Outlook for contacts, schedules, and tasks--the core strength of the Windows Mobile platform, says Richard Entrup, Byram Healthcare Centers' CIO.

Apple products for business computing
Xserve server with two Intel Xeon dual-core processors

Xserve RAID storage system

Mac Pro notebook and desktop computers

Apple Remote Desktop 3 management software

Xsan storage area network

Application software and File Maker Pro database
Business users are eager to move past e-mail and start pushing more applications to handhelds. More than 40% of respondents to an InformationWeek survey last fall said they want employees to access apps related to customers, sales management, field service, logistics and supply chains, human resources, and financials on mobile devices within two years.

There are plenty of promised iPhone features that could make a business user happy. Conference calls can be done with a "merge calls" button, and users can sift through voice mails from a visual menu. Text messages can be reviewed in threaded conversations instead of lists of messages sent and received. The e-mail works with IMAP or POP3 e-mail services, both of which Microsoft Exchange supports. Phone numbers found in e-mails become click-to-call links.

Creative types who rely on Macs--the advertising firms, design firms, media outlets, and architects that make up 3 million to 5 million of Apple's customers, according to ThinkEquity research--are likely to put iPhones through real-world tests. The Mac operating system on a smartphone is what they've been waiting for, if it has apps that let them keep in touch with visual- and media-intensive work on the road.

But the iPhone still needs to prove it works as described, not just in a demo, before it has any chance of meeting Apple's goal of selling 10 million units by the end of 2008. There's reason to suspect the iPhone's business impact could be similar to the Mac computer's: much admired, indispensible for visually intensive niches, but not the mass-market tool on which companies run. And one that keeps the dominant players from getting too comfortable.

--with Charles Babcock, Thomas Claburn, Sharon Gaudin, J. Nicholas Hoover, and Aaron Ricadela

Photo by Neema Frederic/Gamma

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Sara Peters, Editor-in-Chief, InformationWeek / Network Computing
Jessica Davis, Senior Editor
Richard Pallardy, Freelance Writer
Carrie Pallardy, Contributing Reporter
John Edwards, Technology Journalist & Author
Carlo Massimo, Contributing Writer
Salvatore Salamone, Managing Editor, Network Computing