Apple’s SDK and Email Synch Open up the iPhone to Businesses

| Mar 10, 2008 | Enterprise Mobility - U.S., U.S. Wireless Portal | Competitive Update

| Analysts: Kitty Weldon , Avi Greengart

Current Perspective: Positive
Vendor Importance: Very High
Market Impact: Moderate

Event Summary

March 6, 2008 - Apple launches iPhone 2.0 beta software, including an SDK for developers, and built-in Microsoft Exchange ActiveSync, allowing secure, OTA push email, contacts and calendars, remote wipe, and Cisco IPsec VPN for encrypted access to private corporate networks. Apple will release the final iPhone 2.0 software, iPhone SDK and new enterprise features, as a free software update for all iPhone customers by the end of June.

Analytical Summary

• Current Perspective: Positive on Apple’s SDK 2.0 announcement, because it opens up the iPhone for consideration – even serious consideration – as a mobile enterprise platform. As the iPhone will now support push email/PIM, basic device management/security and custom application development, Apple is taking the iPhone beyond prosumers and solidly positioning it as a business smartphone. Price, brand and lack of a physical keyboard will still be obstacles for some corporate customers, but iPhone – which was always sexy - is maturing.

• Vendor Importance: Very high to Apple, because the iPhone is one of Apple’s three main product lines, along with the Macintosh computer business and the iPod family. The ecosystem built for iPod benefitted the iPhone, and now the iPhone is returning the favor by turning the iPod touch into a portable computing tablet. Considering how well Apple did selling the iPhone even without third-party applications, the SDK will significantly increase take up among new high-value customer segments.

• Market Impact - Enterprise Mobility: High on the enterprise mobility market, because the iPhone can now compete on more even terms against traditional smartphones. Other device manufacturers and middleware providers such as Nokia and RIM still have a large window of opportunity, however. Their device management and security portfolios are more proven and more robust, and legions of ISVs have been developing business applications for ESeries devices and BlackBerrys for several years. Microsoft and its OEMs and device management partners also have a leg up on Apple in terms of device management and security, the number of line of business apps in the market, brand, price and 3G access support.

• Market Impact - Smartphones: High on the smartphone market, because the iPhone can now compete on more even terms against traditional smartphones. Other smartphone vendors still have a large window of opportunity, especially at the entry level ($99 to $149), which is quickly becoming a significant segment of the market that used to go to feature phones. Another approach will be to compete on hardware; the iPhone still lacks 3G, high-end imaging, and a physical keyboard. Palm, however, will have to raise its profile significantly if it expects developers to stick around for its mobile Linux platform.

Recommended Competitor Actions

• RIM needs to start listing and comparing the details of its offerings with Apple, particularly around security where is still shines. RIM is vulnerable to attacks on its NOC architecture given the publicity around recent outages, and it should publicly advertise SLAs as a marketing antidote. And if RIM has iPhone-killer hardware in the works (9000 series?), now is the time to start announcing it.

• HTC, Samsung and Microsoft’s other Windows Mobile licensees should point out that Apple is just catching up to what they already have – Exchange ActiveSync support and an SDK, which allows native application development. Not only that, there are already thousands of applications that have been developed, and they run on hardware with touchscreens, 3G and GPS that are on the market today.

• Palm claims that its next generation mobile Linux products due in 2009 will be competitive but it hasn’t shown them to anyone; Palm needs to generate buzz fast or it won’t have a developer community to come home to should it actually deliver on its promises. Palm should convene influential journalists and bloggers for an early demo, swear them to secrecy, and then hope (expect, really) that word leaks out anyway.

• Google is being altogether too laissez faire. Their current SDK was described by Google’s own developers at the ETech conference noted that Google does not consider the SDK a beta or even alpha release. Well hop to it, then! Google should also license Exchange ActiveSync – Microsoft seems to be willing to let anyone do so, and Android is going to need corporate email support every bit as much as the iPhone does.

• Nokia has made a lot of noise with developers lately – too much noise. Which platform are developers supposed to write to - TrollTech, Native S60 or Microsoft Silverlight? But just as important, Nokia needs to prove that its touchscreen phone is more than a clone of the iPhone. It also needs to highlight the Intellisync device management platform as a more robust solution than what is available from Apple via ActiveSync.

• Carriers need to overhaul their decks and the process of getting applications onto those decks. Apple is doing an end run around carriers – including its patron, AT&T. The bar has been set: if carriers can’t deliver a better ROI to developers than Apple, which is only charging 30% for distribution, then they will lose out completely.

CLIENTS ONLY

Competitive Positives and Concerns

Recommended Vendor Actions

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