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New iPhone features not quite enough for the enterprise

Observers say Apple's new enterprise features for the iPhone are a step in the right direction, but there are many more questions to be answered before the device can really compete in the enterprise smartphone market.

The iPhone 2.0 software beta announced last week by Apple is a good first step toward making the device a real enterprise smartphone option, but observers say there are still better options out there.

"My perspective is that it doesn't mean a lot for the enterprise, other than it makes a good headline," said Tony Rizzo, research director for mobility at The 451 Group. "Just because they threw in enterprise support doesn't mean there is any sort of enterprise play here. It needed a starting point, which [this announcement] was, and then it really needs to prove it can deliver a robust enterprise capability. But they had to start somewhere, and we'll see where they go."

Last Thursday, Apple announced the iPhone Software Development Kit (SDK) and several enterprise features aimed at increasing corporate adoption of the device.

The enterprise features include support for Microsoft Exchange ActiveSync, which provides secure push email, contacts and calendars, and some remote wipe capabilities. Apple also announced Cisco IPsec VPN for encrypted access to corporate networks.

Scheduled for general release in June, the SDK will open up application development for the iPhone to third-party developers, which should encourage some innovation in enterprise application development. But Rizzo said simply releasing an SDK won't spontaneously drive mobile enterprise application development for the iPhone.

He said that people shouldn't ignore the fact that BlackBerry maker Research in Motion (RIM) has been investing for years in developing a secure environment for building mobile enterprise applications.

"So I'm sort of befuddled and amused when I hear that Apple, by simply deploying an SDK -- which is neither here nor there -- is going to actually make any inroads at this point in time," Rizzo said. "There is so much more to building mobile enterprise applications than just putting out what amounts to a simple toolkit. It's naïve and silly to think that this SDK is actually going to make much of an impact on the enterprise level."

Avi Greengart, research director for mobile devices at Current Analysis, was more sanguine about Apple's announcement. He said the SDK appears more open than some had feared and that it sounds very powerful. And the ActiveSync support meets a real market need.

"There are a lot of consumers who are also employees, and they've been held back from buying the iPhone because they can't get their corporate email on it," Greengart said. "So even if this is not a device that is bought by IT and given to employees, currently there are a lot of devices that are bought by consumers and then configured to get email access. That scenario was impossible for the iPhone [until now]."

Although the ActiveSync support is welcome, analysts were skeptical about its overall impact.

"Currently, there are tens of millions of devices out there that support ActiveSync, and the truth is [that] many people find that not to be sufficient," said Bill Hughes, principal analyst with In-Stat. "It's slow. It puts on a good demonstration but, in practical terms, it's not as good as some of the other enterprise servers or push email systems."

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"ActiveSync was a minimal requirement," Rizzo said. "They have to start somewhere in terms of being able to say we can do a secure push email capability. But if using ActiveSync was all that simple and preferable to Research in Motion, you'd see a lot more Windows Mobile devices putting it to use, and they're not. So if Windows Mobile -- which clearly has an inside track on this front -- isn't getting any traction or making what would even amount to a dent in RIM's penetration here, what's the iPhone really going to do?"

Apple's announcement addresses some of the fundamental support issues that IT managers had with the iPhone as a corporate option, but observers say there are still several core issues that Apple must address before the iPhone can really take on BlackBerry and other leading enterprise-class smartphones.

Jack Gold, president of J. Gold Associates, said Apple's announcement certainly makes the iPhone more attractive to the enterprise, but he said that the SDK and the enterprise features don't solve some long-standing problems that have always dogged the iPhone's enterprise adoption potential. The biggest issue is the exclusive carrier agreement Apple has with AT&T.

"If I'm an enterprise and I have a three-year contract with Verizon, I'm not going to switch 10,000 people to AT&T just so I can get them the iPhone," Gold said. "It's just not going to happen."

He also said that the Cisco VPN client is nice, but he wonders what can be done with it.

"If I want to get back to corporate and connect up to the LAN and attach to Oracle or Siebel or SAP -- fine. I can register via a secure VPN link. But then what can I do with a client?" Gold said. "This is where the SDK comes in, so depending on how open the SDK is, and what it actually lets me do -- I think it is going to take a little while for people to actually look at the SDK and see what it allows and provides."

Greengart said the iPhone's virtual keyboard will be a problem for many companies.

"I find it delightful to use; but not everybody does," he said. "And there are people who insist on tactile feedback."

"The other issue is brand," Greengart said. "A company like Research in Motion, their brand is all tied up in this market. Apple is pitching the iPhone as a Web-enabled, video-music-playing smartphone -- and there's nothing wrong with that. But if you are an IT manager, are you going to expense a device that is designed to be the best iPod ever, or would you prefer something that is branded as a corporate productivity device?"

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