Will iPhones sneak into the workplace?

Recent trends have seen several individual consumer devices and services being used as work tools – mobile phones, BlackBerrys, PDAs, satellite navigation devices, instant messaging among them.

But will the much-hyped iPhone from Apple raise the bar again and become an essential part of the enterprise desktop of the future, despite its many setbacks as a business device?

As the iPhone was gearing up for its launch in the summer, there was much speculation about whether it would be targeted at enterprises as well as consumers.

So far, Apple’s US distribution partner AT&T is not pushing business use; Apple’s UK partner O2 says it is concentrating on its consumer launch in November; and Apple itself is not marketing to business users. And yet no one seems to doubt that it is being used for work purposes.

There are a lot of features on the device that make it an obvious choice for workers on the move: a PC-like internet interface; visual voicemail; the ability to read and access work documents over the device’s pared-down Mac OS; integrated Wi-Fi and cellular access; and virtual private network (VPN) configurability.

On the other hand, critics say the iPhone’s shortcomings will prevent it from being adopted in a big way by companies. The cons include the inability to write new applications for the platform; the price of the device (currently $399 in the US and, based on exchange rates, set to be more when it launches in Europe); operators so far not offering any discounts on bulk buying of handsets, voice and data minutes; and recent controversy surrounding “bricking” – blocking – of devices that have been unlocked for use on other networks.

A survey conducted by InformationWeek magazine in September found 70 per cent of 310 business users polled did not have plans to buy iPhones.

Yet, there are those who believe that some of the limitations, at least in the area of device management, are precisely why the device might appeal to an IT manager.

“So what if I can’t install applications on it? Using software as a service over the network, as the network moves to an always-on level of ubiquity, it becomes a much easier job for security if data doesn’t rely on the device,” points out Jamie Lewis, the chief executive and research chair for the Burton Group.

Analysts say that even if the iPhone has been neither marketed nor designed as an enterprise device, it will probably find its way into enterprise use, much as Apple’s Macintosh has.

“I don’t think businesses will buy 10,000 devices soon. But people are buying them because they are cool, and they bring them into work,” Michael Gartenberg, vice- president and research director for Jupiter Research. “Macs aren’t on the buying lists of many companies, but a lot of people will pull out Mac laptops in the office.” The same survey said 37 per cent of businesses use Macs.

This in turn could force IT managers to figure out how to accommodate use of the iPhone. Down the line, it might also get third-party companies, if not Apple itself, to figure out how to make them more enterprise-friendly – as happened to instant messaging, which now has added functionality, for example, to back up all conversations for record-keeping purposes.

“As new generations enter the workforce, the kinds of tools they’re accustomed to using will put expectations on the IT organisation. Those changes will be inexorable,” says Mr Lewis at the Burton Group. “Five years ago, instant messaging was thought of as a kids’ application, but now a lot of businesses have implemented IM solutions.”

Some believe that progress in computing devices in recent years has had a big impact on technology in the workplace. Stephen Baker, vice-president, industry analysis for the NPD Group, says that 15 years ago IT departments’ hands were forced to support products when people brought them in and used them anyway.

“The argument can be made that everything from that point on has always gone from consumer to enterprise,” he says. “Before that, cutting edge technology came from a corporate environment. But no more.”

But this reverse effect has not changed some of the most basic buying patterns of business services. Users highlight how their needs are not being met by most enterprise mobility solutions, and vendors believe they are difficult customers.

“Apple doesn’t want to be an enterprise company because enterprises tend to have a lower margin and they don’t care about brand equity and all the sweat and toil that Steve [Jobs] puts into every product that goes out the door. They care about buying 10,000 units and having 75 per cent off,” says Mr Baker. “My feeling is that you won’t see any business packages from carriers because Apple doesn’t want that.”

Apple declined to comment, but someone working closely with the company says specific targeting of the enterprise market is low because the company divides its product development and business development teams.

“The idea that enterprise usage was integrated into iPhone development is not likely,” he says.

Mr Gartenberg at Jupiter Research adds: “Traditional PC companies want to conquer the living room, not the board room. Apple would be somewhat foolish to take its eye off the ball. There is so much opportunity in consumer that they will continue to focus there rather than target IT departments.”

There are, however, even at this early stage, applications being developed for the iPhone. One site dedicated to aggregating them, iphoneapplicationlist.com, offers enterprise-oriented software, including applications that help synchronise messaging clients and read documents. The site, founded in June, was bought last week by Shape Services, which develops cross-platform mobile software.

Ultimately, the enterprise/iPhone ball might be picked up by Apple’s competitors. There is certainly a market for more mobile gadgetry: California-based analyst firm Creative Strategies believes that 18 per cent of mobile handsets sold by 2012 will be “smartphones” – devices with functionality such as internet access, e-mail and multimedia – with the number rising to between 35 and 45 per cent by 2015.

“There won’t be a smartphone made now that won’t be a reaction in terms of features to the iPhone,” says Mr Lewis at the Burton Group. “So whether it’s Apple’s device or someone else’s, the iPhone will move into the enterprise for a variety of reasons.”

Jason Langridge, UK and EMEA mobility business manager for Microsoft, says: “From our perspective, it’s great to see the iPhone on the market. It confirms that the future is in smart devices and provides a huge opportunity to invest.”

In September, Apple announced that it had sold 1m iPhones, but there are no estimates on how many of those devices are used as purely consumer or purely enterprise products.

Indeed, the iPhone’s move into the enterprise is, and probably will be for some time, a far cry from the concerted efforts of enterprise-focused companies.

Microsoft for example claims it has “many thousands of enterprise applications developers” that work with companies directly. It does not specify how many applications there are in the market for enterprises, but in the consumer space there are 18,000 applications for Windows Mobile.