Apple contends the iPhone is ready for business

There has been a concerted effort to make the new 3G iPhone enterprise-friendly, writes Karlin Lillington

THE LONG-AWAITED 3G iPhone has just arrived amid much consumer expectation. But will businesses bite?

Apple is clearly hoping they will. At the launch of the new model at the Apple Worldwide Developers Conference in San Francisco in June, Apple chief executive Steve Jobs stressed the enterprise possibilities for the phone, and Apple has even set up an entire enterprise section for the iPhone on its website. Tagline: "The best phone for business. Ever."

The enterprise certainly wasn't part of the initial market strategy - tariff structures from the operators licensed to sell the iPhone were all organised for consumer use.

But signs were that the original iPhones had already been creeping into businesses anyway. Steve Alder, general manager of devices at Telefonica Europe (which has the contract to supply the phone in six markets) says: "On the business side, we found that lots of people were buying it as a business phone."

Still, analysts were critical of bringing the iPhone into a business environment, citing security risks in particular. Last September, Monica Basso, research director at analyst Gartner, told CNET's News.com: "If I look at the iPhone, I see it more as a new threat for enterprises [than] something that is secure. There is little support nowadays from a security standpoint that can be put on the iPhone. It doesn't support any of the enterprise mobile e-mail solutions. It doesn't support Exchange direct push. The only thing that is supported [are e-mail clients] that can be connected to POP3 or IMAP4 servers, which cannot be connected to e-mail servers that sit behind the firewall. This exposes the e-mail server in a way that is not considered secure."

Those criticisms now read like the set that Jobs ticked off at the 3G iPhone launch in Apple's volte face towards the enterprise, a vast potential market for Apple's smartphone that had clearly grown more alluring with the US success of the device with consumers. Some six million of the phones have been sold worldwide so far.

According to Jobs, the features that would endear the phone to the business world include faster download speeds as the phone shifts from Edge networks to proper 3G, GPS navigation incorporated into the phone, support for Microsoft Exchange, and support for Cisco IPsec VPN (virtual private network), for encrypted access to corporate networks.

Along with the new iPhone 2.0 software for the phone, Apple released a software developers' kit - or SDK - that allows anyone to develop applications for the iPhone. Apple is betting that it will generate interest from third-party providers of corporate applications and stimulate development within the enterprise.

O2, which has the contract for iPhone in Ireland, thinks businesses will opt for the 3G iPhone. "Many businesses are looking for more choice surrounding mobile e-mail solutions for their business. Apple's iPhone fits well within this space as the interface is very user friendly," says Billy Darcy, head of corporate and business sales, O2 Ireland.

According to Jobs, response to handset trials within large enterprises has been good. Jobs told his audience at the June launch that about 35 per cent of the Fortune 500 had signed up to trial the phone and offer feedback on the software as it was developed.

"Everything they told us they wanted we have built into iPhone 2.0 software out of the box," Jobs said in June. Alder says several UK enterprises have undertaken trials of the phone as well.

Nonetheless some analysts are cautious about the iPhone's enterprise possibilities. They cite continuing security concerns, not least the fact that the phone has to be managed through iTunes, a public application. That won't appeal to many enterprise system administrators, though Adler points out that businesses can hide their business applications within iTunes - they can be set for private access only.

Support also remains an issue. At the moment, Apple does not offer enterprise support for the device, in contrast to companies such as Research In Motion, which has very targeted, business-level support for the Blackberry. Businesses demand round-the-clock, 24/7 support, say analysts. Ringing the general Apple helpline will not cut it.

But others note that Apple has the capability to ramp up support - it already has its own extensive AppleCare extended support system available for buyers of its products, which could be tweaked to embrace corporate support. And there's no reason Apple couldn't release an enterprise version of iTunes that would sit within the corporate firewall and enable direct device management.

Even without these elements, Gartner had already moved its recommendation on the device to "business ready" last March, after briefings on the new software for the new device.

Fitting with the new enterprise strategy, several markets that distribute the iPhone have decided to offer special enterprise tariffs, which will provide price breaks for the heavy usage typical of a business phone user.

Both ATT in the US and O2 in the UK have rolled out enterprise plans. O2 Ireland has opted not to go this route for now, "though we will continue to review this on an ongoing basis", notes Darcy.

Many predict the iPhone will work its way into the enterprise initially not through the front door, but by following a Trojan horse scenario. Business employees who like the technology will buy the phone for themselves, bring it in and use it for certain aspects of their working life. This in turn will place slow internal pressure on corporate IT departments to make room for the phone as one of a choice of supported devices, which will in turn drive its use. And the corporate walls will come tumbling down.