IPhone impact on enterprise IT research meeting

From Wikibon

Current revision as of 17:36, 5 July 2007

Mobile Enterprise Peer Incite: Notes from Wikibon’s June 29, 2007 Research Meeting

Apple introduces a handheld computer with a phone

Peter Burris & Kaushik Das

After months of speculation, the big day for Apple geeks has arrived. The iPhone is here, and lines of potential purchasers are winding their way into Apple and AT&T stores nationwide. While it is clear that the iPhone will be a consumer hit, we wonder about its implications for the enterprise.

The iPhone satisfies many physical requirements for a high-end cell phone -- it is small, attractive, light, by all accounts hardened and durable. However, it is what Apple has done with the software in the iPhone that will make or break its enterprise adoption.

The most important feature of the iPhone to the enterprise is the availability of a full-function, general-purpose browser on the iPhone itself. It is this availability that puts the iPhone in a new class -- a handheld computer with a built-in phone as opposed to phones with some computational ability. Prior to the iPhone, developers had to find ways to pack complex functions onto a tiny screen using archaic and sometimes ill-conceived technologies to distribute function. A full-function browser, in this case Safari (which now is also available on Windows) allows them to deliver that functionality via the browser, the most popular way to reach remote users (both employees and customers) today. This makes it less complex to write, distribute and maintain functions to mobile users.

However, the benefits are moderated by doubts. The chief of these is security. So much attention has been put on the iPhone as a consumer device that security issues — the ability to secure phone conversations, email, IM, and data transfers; to blank the device remotely if it is lost or stolen; to defend it against malware — has not been discussed. However, security is critical in the enterprise world. A second major concern is ensuring that all music and video content users may download to corporate-owned iPhones is properly licensed.

Of course there are many other benefits (iTunes availability, multiple wireless modes) and negatives (AT&T exclusivity, inability to edit Office documents), but we see these as secondary and in some cases rectifiable in future software releases or hardware add-ons.

Many IT organizations will gain experience with the iPhone over the next months if only because senior executives will buy and demand to use it with their corporate email. IT should make a conscious effort to use that experience as an opportunity to develop the expertise to make the decision on whether the iPhone becomes a standard IT device.

Action Item: The iPhone is here and coming to an executive near you. IT organizations must focus attention first to the security issues. This will mean paying close attention to the rate at which AT&T and Apple expose critical security services on the iPhone. This will provide the first insight into whether or not Apple can successfully present itself as the suppler of a new class of enterprise IT devices.

IPhone functional comparisons

David Floyer

Below is a table I have created looking at the various features available on cell phones likely to be used in the enterprise. I chose the phones used by myself, Dave, Peter, and the phone I wish I had, the iPhone. The number of stars are based on my research looking at the videos on the iPhone, my personal experience with the RAZR and Treo, and research on the Blackberry.

Please feel free to update the table!

What is clear is that for large enterprise use, the lack of a secure email attachment is critical. Only IMAP connection is available at the moment, and many email servers turn this function off for security reasons. This is unlikely to be a problem for SMEs and many intermediate sized companies. The Wall Street Journal indicates that Apple will probably license either RIM or Microsoft technology to provide a "virtual blackberry" or virtual windows mobile" connection to email.

The lack of a security feature will be important for some users in government or large organizations.

Typing seems to be a very personal thing. Many users like two thumbs, or a stylus. With practice all seem good solutions, and personal preference will determine what is used.

The bottom line is that IT departments can fend off attaching iPhones to their networks for a time, but the second that Apple announces "virtual" connections, all bets are off.

Action item: Cover your bets! Get a skunk-works trial going later in 2007 with an iPhone in the IT department, so that you can give positive guidance to potential users. When Apple announces secure email connectivity, it could be career limiting to say no to the sales director who decides to incent his sales staff with iPhones.

Just an iPhone? A thought experiment

David Floyer

The most impressive aspect of the iPhone is the user interface. It is simple, intuitive and fun. So, a thought experiment – what would it take to make the iPhone a replacement for the PC? Clearly, access to an iTunes-like service is required; many users would require at least occasional access to larger screens, keyboards, and high-speed internet access. The following are a projection of some of the key components that should be in place:

1. Access to an iTunes-like service. Alternative methods could include:
   • iTunes as a service – Advantages would be simplicity and lack of devices to manage; disadvantages would be all data on the net, downloading all data (CDs, home videos, contact information, etc) to services on the net.
   • iTunes on the iPhone – Advantages are simplicity and lack of devices to manage; disadvantages would be risk of loss of data with a single point of failure.
   • Docking station for iPhone with iTunes and other functions (docking station components could include a large screen, hard disk, additional cards, keyboards, additional processors, internet connection, etc.)
2. WiFi is available widespread (3G services may be twice as fast as EDGE services, but sustained bandwidth over cellular services is unlikely to compete with WiFi)
3. The availability of Web services as applications (PC applications, order entry applications, status checking, school assignment submission, government forms, etc)

If the industry and society are successful in breaking the cell-phone carrier’s stranglehold on access to data, this should herald a plethora of candidates for the role of a single communication device over the next ten years. The iPhone is one such candidate, but established cell phone manufacturers, PDA manufacturers and Microsoft are all potential strong players.

Action Item: IT departments in both the public and commercial sectors should be looking strategically to accelerate the availability of both externally and internally facing applications as web services, rather than guessing who will win the hearts and minds of users with the best user experience.

Breaking the carrier’s strangle-hold on access to data

David Floyer

The announcement of the iPhone has shown the extent that US cell-phone carriers have been one of the obstacles in getting effective access to data for users, and in the development of effective personal communication devices. Phone and PDA manufacturers have been frustrated for years by the stranglehold the carriers have had on innovation. The axis of innovation in this area has already strongly shifted to Asia in particular; just ask any recent newcomer from South Korea or Japan to rate the service in the US!

This control is reminiscent of AT&T's early rules that did not allow its customers to attach devices to its network, such as extension phones, answering machines, or paging devices. Forcing AT&T to produce a specification for attaching equipment to its network produced a flood of innovation that significantly reduced the cost and increased the functionality of telephone equipment. Today, a similar opening up of the cellular networks is essential to improve functionality and reduce costs.

Action item: US corporations, US vendors and the public should be putting strong pressure on congress to allow all equipment that meets specifications to attach to the network. and ensure that all carriers do not control access to and use of data. The result of inaction will be to delay the introduction of new personal communication devices, threaten US participation in this market and negatively impact US productivity. CIOs should be actively explaining this to their boards.

IPhone could give new meaning to concierge IT service

Dave Vellante

It's not talked about too often but the concept of concierge IT services was conceived to create a sort of a safe buffer zone between senior corporate executives and IT overall. Concierge services dedicates a team of IT professionals to the executive suite and provides a higher level of service to the corner offices than to the rest of the organization. Put bluntly, it's a way to ensure that the corporate wallets who fund IT aren't subjected to the often less than perfect IT services that the rest of the corporation has to endure.

The iPhone and devices like it will first seep into corporations via the executive path. While access to these new 'toys' will likely be restricted to the broad masses, executives that want them will more often than not, get them. To a great extent, devices like the iPhone represent a new class of device which will bring new applications and new sets of requirements for mobile workers. Whereas concierge servces in the past were focused on meeting the high service level demands of executives, increasingly, such capabilities should be used as a feeder for new ideas, defining requirements and exploring enterprise adoption for competitive advantage.

Action Item: Organizations should view devices like the iPhone and other new category mobile enterprise devices as an opportunity to define, research, document and communicate new requirements for the business. This will require a skill set that is different from the types of professionals typically dedicated to serve the executive suite, shifting from ones that are primarily reactive to ones that are more visionary and proactive.

IPhone’s Challenge to the Smartphone Makers

Bert Latamore

With the iPhone Apple laid down a huge hardware challenge to the other smartphone manufacturers and then left the door wide open in software.

The iPhone is the first smartphone to have more than 1 Gigabyte of memory, and with a maximum of 8 GB it didn’t just break this barrier, it smashed it. By comparison, Palm’s popular Treo line only reached 64 Mbytes, almost an order of magnitude less, a year ago, and the Windows Mobile cell phones top out at about 256 MB. That 8 GB combined with built-in WiFi (still not standard on all smartphones), and a fast processor and what by all reports is a very bright, readable screen open huge possibilities.

Having produced this incredible hardware combination, however, Apple has crippled it in software. First and foremost a smartphone should be an Internet-centric device. This means more than just doing email, it means being able to access multiple Internet-based resources either through Wifi when that is available or the cellular network when Wifi is not. But while the iPhone makes connecting to Wifi very easy, beyond doing email there seems little you can do once you are connected. Surprisingly you cannot even download music directly, something that many smartphones support today. Instead, the only way to install audio or video is through the iTunes software client on a Macintosh or PC. To say this is disappointing is an understatement, particularly since the iPhone is obviously intended to be a converged iPod/cell phone. Given this dependence on the desktop, users will be filling that 8 GB with the music they want to listen to at work every day when they could be downloading whatever they wanted at the moment from both their own online collections and the iTunes library. Used that way, that 8 Gbytes shrinks considerably when compared to the 75 Gbytes available on a video iPod today at half the cost of the iPhone.

Apple also has chosen to repeat a mistake in strategy from its early days by keeping very tight control over the software that can run on the device. Although it runs a version of OSX, this version does not support the applications on the Macintosh, and so far Apple has not allowed third party developers to create software for it. In contrast, Palm Inc. started encouraging third-party developers to write for its devices when the first PalmPilot came out, more than a 15 years ago, and Microsoft quickly adopted the same strategy when it first entered the handheld market a few years later. The result is literally hundreds of third-party programs, many serving specialized communities, are now available for those platforms. Considering what has been crammed into the tight quarters of a Palm PDA, including GPS systems (Tom Tom and Garmin) and a full star tracking system good enough to drive amateur telescopes (Planetarium), the iPhone’s potential would be breathtaking if Apple reversed this strategy. And by the way, both Palm and Windows Mobile support downloading and installing software directly into the device.

For corporate use, the iPhone has another major weakness – its very limited support for standard Office documents. At present users can read Word and Excel documents but not edit them. This means, for instance, that they cannot download data from corporate systems through the browser and import that data into a spreadsheet for analysis on the iPhone – instead they need to do this on their laptops. Again, competing WinMobile and Palm smartphones have long had the capability to create and edit documents in all Office formats on the device.

And the ability even to write a simple email is very limited by the screen technology Apple chose. Instead of the pressure-sensitive touchscreen that is standard in all competing smartphones and PDAs, the iPhone uses an electrically-sensitive screen that is only sensitive to fingers. This allowed it to use a hard glass screen rather than the soft plastic of a touchscreen. However, reports from several sources, including the four reviewers that were allowed to try out the iPhone before release, indicate that this makes writing on the device a tedious practice, and that while the Apple employees demonstrating it seem able to use a two-thumb method at least some reviewers report they have yet to move beyond single finger hunt-and-peck. And using fingers to enter text also makes that bright screen a fingerprint magnet.

Action item: The challenge for the smartphone competitors, therefore, is to build a new generation of devices with hardware that matches the iPhone’s good points, particularly the huge solid-state memory resource, but which preserves their strong points which include a touch screen and handwriting recognition that makes entering information easier, compatibility with Bluetooth keyboards and other peripherals, replaceable batteries to support a full day of use rather than just the eight hours of the iPhone, and most of all compatibility with their huge libraries of third-party applications and abilty to sue Internet-based resources.

The iPhone and the smart phone market

Bert Latamore

As Friday's release of the Apple iPhone approaches, the technical media are in countdown mode. The general tenor of articles is that the iPhone will revolutionize the smart phone market just as the iPod did with MP3 players. Looking beyond the hype, however, the smart phone market today is very different from the MP3 market back before the iPod. While the iPod was in many ways a pioneering device in what then was a very immature market both in terms of the technology available and market size, the iPhone is entering an established market where several players ranging from tiny Palm Inc. to innovative giant Hewlett-Packard are already well established, with lines of technically sophisticated devices. Furthermore this is a market where device design and sales are largely controlled by the service providers rather than the device manufacturers. Just to cite one example, the main reason that very few smart phones offer built-in WiFi connectivity is that the service providers see WiFi as the competition that cuts into their revenues by providing cheap downloads and voice over IP (VoIP) services.

Furthermore, when the iPod was introduced, most potential users were unaware that MP3 players existed, and those who did found them difficult to use. Apple's two brilliant strokes were first to create a fully integrated, plug-and-play MP3 solution and second to market that to a mass audience. Timing its introduction for the holiday market helped as well. It became that year's gift gadget.

In contrast the smart phone market has been active for a decade. While it is only a fraction of the overall cellular market, most people are aware that smart phones exist, and “Blackberry” and “Treo” are approaching the status of household terms. And while MP3 players are almost entirely consumer items, a large percentage of the smart phones (including Blackberres) in use are provided to users by their employers.

So how will the iPhone fare in this highly competitive market? Given how little is known about the device in these final days before its release, it is easy to project all our hopes — or all our fears — on it and see it either as a revolutionary product that will change the face of the market, or as a sure-fire flop. However, that has never stopped speculation.

First, the iPod was hugely successful because it built a huge initial sales spike, mostly by selling to customers who had never owned an MP3 player before. In contrast, virtually everybody today, down to elementary school children, already have cell phones and cellular contracts. And phone sales, particularly for high-end phones such as the iPhone, are closely tied to contract renewals. This means that regardless of the hype, the immediate potential audience for the iPhone is confined to people who:

1. Are either existing AT&T subscribers or are nearing the end of their present contracts and are willing to switch to AT&T, and
2. Are willing to spend $500 up front on a high-end phone (about $2,000 total over the length of the two-year contract AT&T requires with the iPhone) despite the discounts all services offer on other phones, including competing smart phones.

Second, Apple is clearly focusing on its strengths in the consumer market with the iPhone. Its ads have not even mentioned email, although presumably the iPhone does support email, which is the most-used single application on smart phones other than voice. This and IM/SMS are important traffic generators for the cellular carriers, and no carrier would allow a high-end phone that did not support both.

Clearly the ads are directed primarily at attracting new users to smart phones rather than at convincing existing smart phone users to upgrade. It has two major qualities in its favor there: the excitement it has generated in the market with its huge advertising campaign, unprecedented for a cell phone manufacturer, and its “coolness” factor, driven in part by its excellent design.

However, the iPhone is also one of the most expensive phones on the market, and the services where it excels — video and audio downloading — are expensive as well. So while the iPhone may generate lines at AT&T stores Friday morning, many of the people in those lines may find the package beyond their budgets. And some of those who do sign up may find themselves with serious sticker shock when they get that first month's bill for the stuff they downloaded.

Also, the iPhone's main competition may prove to be Apple's own video iPods. Today the street price for a 70 Gbyte video iPod is $330, about $200 less than the iPhone. While its screen is smaller than the iPhone's, it is just as bright, and while it has no wireless connectivity, a major lack that I hope Apple will remedy in future devices, a user can carry a lot of music, pictures, and video on 70 Gbytes. And downloading via a high-speed Internet connection is both faster and less expensive than using cellular.

If that is true, Apple may find it is cannibalizing its own market with the iPhone, and furthermore, by of necessity allying with AT&T, opening its captive market to competition.

The bottom line here is that the iPhone will attract users and probably will be successful in turning a profit for Apple. But it is unlikely to generate the huge influx of new users to smart phones that the iPod did for MP3 players. The iPhone’s largest contribution to smart phone development is in popularizing the large, bright display and one-finger interface. With luck the other smart phone makers will pay attention and field a choice of designs, including some that maximum screen area rather than using half of that precious real estate for thumb boards.

Action item: Ultimately the iPhone’s success will depend on its ability to attract a market of new smart phone users. The iPhone's applicability as a corporate device — providing mobile access to email, corporate IM and enterprise applications — remains to be seen. However, Apple and AT&T would have to offer significant discounts to compete against Research in Motion and other established smart phone suppliers in the corporate market outside of companies where the Macintosh is standard.