Is Apple's iPhone 2.0 Good Enough For Enterprises?

A developer of enterprise mobility software has expressed doubts that Apple's iPhone can cut it in the enterprise due to a number of issues, all of which Apple can change, but in doing so are anathema to how the company operates.

Ahmed Datoo, vice president of marketing of Zenprise, a developer of software for enterprise BlackBerry users, said he would welcome the opportunity to support the iPhone in the enterprise but has his doubts it will make much headway.

"The question that needs to be asked is, is the 2.0 software going to be good enough to take on RIM at the enterprise level?" he told InternetNews.com. "It doesn't look it. Is it good enough to get at the small and medium-sized business market? Probably. They have different requirements."

Apple (NASDAQ:AAPL) did not return calls seeking comment for this story. The company had its big enterprise roadmap event last week where it unveiled details of its software development kit (SDK) and support for Microsoft's Exchange Server. CRM and Saas provider Salesforce.com announced support for the iPhone and two large corporate customers, biotech giant Genentech and Nike, said they already had iPhone deployments underway.

"The iPhone is a watershed event in mobile computing for corporations," said Todd Pierce, vice president, of corporate IT at Genentech, in a statement. "Genentech’s pilot with iPhone has shown its potential to be the most useful business mobility tool we’ve ever used. We now have 3,000 planned for deployment based on how easy and simple it was to integrate iPhone with our corporate email system."

IDC analyst Sean Ryan, said Apple's support of Exchange was important to get the iPhone consideration among enterprise buyers, but nothing special. He notes that Nokia, Palm, Symbian, HTC and other mobile players already support Exchange and its ActiveSync technology for connecting to corporate email systems.

"In the mobile enterprise it's not just about the devise, but about the platform and the support system," said Ryan. "The iPhone has a lot of cachet, but there are many challenges to wide corporate adoption. It's a premium-priced device with limited device management." With Exchange, IT can shut down an iPhone that's lost or stolen, but other mobile devices have more extensive management capabilities.

Ryan also said the market for enterprises devices like smart phones is still at a very early stage and the iPhone is very new. "Apple has an opportunity but RIM, Nokia, Microsoft and others aren't going to sit still."

Datoo of Zenprise laid out four distinct areas he thinks Apple must overcome to make the iPhone a true success in the enterprise. The problems range from technical to perceptual. The first is that Apple is viewed as a consumer product, and firms that play in both spaces, consumer and enterprise, use separate brands. "It's rare to see a company pulling off operating in the enterprise space and consumer space with the same product," said Datoo.

The second is support. Apple is a relatively small company with modest support infrastructure. Where would an enterprise customer go for help, AT&T or Apple? Over the years, RIM built out a significant support structure, which Apple will need. "To be a mainstay in the enterprise, you need a support model conducive to an enterprise model," said Datoo.

The third problem is security. The iPhone's internals are not documented or exposed. Datoo said it's not even possible to get at basic internals, like the battery levels or signal strength meters. Many features, like Bluetooth and the camera, can't be locked down. Also, the iPhone is managed through iTunes, which many enterprises have banned from their computers. None of this, he said, will sit well with enterprise customers.

Finally, there is support. Datoo cited a Gartner study that put total cost of ownership for a mobile phone at between $1,300 and $2,600, with about 50 percent of that cost going to IT and user administration. iPhone has no remote administration features, no visibility into the device, which means a lot more time would be needed to be spent diagnosing problems.

And then there's the cultural issues. Apple CEO Steve Jobs is a major showman and loves a big splash at announcement time, but that means being ultra-secretive. While Intel and Microsoft lay out roadmaps stretching into 2010 and beyond, Apple won't confirm a 3G iPhone that even AT&T's CEO has said is coming this year.

That may work with consumer devices, but enterprises don't care for that kind of secretiveness. "In the enterprise, people want to know the next set of features so they can plan accordingly. That's totally antithetical to Apple," he said.

Summing up his view of the SDK and iPhone 2.0 software, "My overall feeling is this is a good first step for the iPhone, it will be well-received in the SMB market. It at least gets them to the discussion table with the enterprise but it's got a ways to go before it can become an enterprise standard."

Roger Kay, president of Endpoint Technologies, agrees that Apple faces challenges but could meet them… if it wants to. "It's not a matter of can they do it, it's do they want to do it?" he said. "Culturally, it's not their main modus operandi and it would be hard to imagine them adopting this business model readily."

Because Apple has a smaller overall market, there is less support for its platforms and ergo, that support is more expensive. That hurts the company as well, said Kay. "I've watched this discussion go on among educational institutions, K through 12 and higher education, in terms of the Mac for years. A lot of the education institutions like the Mac but they don't all take it because they can't get support."

Kay figures it will be another case of Apple having things its own way and the market can take it or leave it. "Steve Jobs has always figured they could have it on their own terms. They offer Exchange support and figure people who will go for it will and those who won't, won't."

The basic version of the Xbox 360, which includes a 20-GB hard drive and one wireless controller, will drop from about $500 to $400.

Microsoft (NSDQ: MSFT) has slashed the price of its Xbox 360 video game console in Europe in an effort to attract more gamers to the platform and boost sales of Xbox-compatible titles.

Starting Friday, the price for the basic version of the Xbox 360 -- which includes a 20-GB hard drive and one wireless controller -- will drop 20% from the equivalent of about $500 to $400. The price for the Xbox 360 Elite, which features a 120-GB drive, falls 13% from $600 to $520.

Microsoft also slashed the price of its entry-level Xbox Arcade Console from $400 to $360.

Microsoft in a statement said the reductions would help position the Xbox as "a mass market entertainment proposition" in Europe. The company is hoping that the debut this spring of hot game titles like Grand Theft Auto IV and Rock Band will further boost demand for the system.

The cuts bring Xbox 360 prices in Europe closer to what the console sells for in America -- though it's still cheaper to buy an Xbox in the United States. The basic U.S. version retails for $350. The Elite version costs about $450.

Microsoft is in a pitched battle with Sony and Nintendo for dominance of the video game console market.

Microsoft sold 230,000 Xbox 360 units in January, while Nintendo sold 274,000 Wii consoles. Sony sold 251,000 PlayStation 3 units, according to market watcher NPD.

Microsoft claims it owns 42% of the video game console market in Europe, the Middle East, and Asia. It also claims to sell more games-per-console than its rivals.

Still, the Xbox 360 franchise faces some challenges. Microsoft was recently forced to pull from the market an external HD DVD drive for the console after Toshiba dropped its high-definition format. Microsoft is now reportedly in talks with Sony with an eye to adding Blu-ray support to the Xbox.

Alternately, Microsoft might instead focus on selling more HD content through its Xbox Live online service.

Blu-ray was declared the winner of the DVD standards war

Just a few weeks after the Blu-ray Disc Association unequivocally won the high-definition video format war, and Microsoft canceled production of its HD DVD drive for the Xbox 360, Microsoft says it's already trying to figure out the best way to align itself with Blu-ray.

"We've already been working on, for example, in Windows, device driver support for Blu-ray drives and the like, and I think the world moves on," said Microsoft CEO Steve Ballmer at the Mix '08 conference in Las Vegas, according to GamesIndustry.biz.

"Toshiba has moved on. We've moved on, and we'll support Blu-ray in ways that make sense," he said.

Ballmer's comment squares with remarks Sony Electronics President made Wednesday night to a gathering of reporters in San Francisco, when he said that Sony is holding discussions with a number of partners, including Microsoft, about incorporating Blu-ray into their products. Glasgow said an Xbox 360 console with Blu-ray was certainly "a possibility."

Though Glasgow didn't specify whether that meant an internal drive or a detachable one like the HD DVD version, the Financial Times cited an unnamed senior executive Thursday saying that Microsoft is considering an internal Blu-ray drive for the 360.

Mark Zuckerberg probably knew his keynote

Mark Zuckerberg probably knew his keynote address at the South by Southwest Interactive Festival would produce a lot of press, but he likely didn't expect it to turn out the way it did.

CNET News.com sat down to chat with the young Facebook founder fewer than 24 hours after the widely criticized onstage interview with BusinessWeek journalist Sarah Lacy, in which a disappointed audience turned on Lacy and demanded better questions.

After the media flurry, Zuckerberg was understandably eager to move on and talk about different topics. But he still touched upon the incident, hinting that while he may not have been totally thrilled with the subject matter, he thought Lacy was still getting unnecessarily hounded.

The interview between journalist Sarah Lacy and Facebook CEO Mark Zuckerberg got ugly quick and then went downhill.

"I thought she asked some interesting questions," Zuckerberg said. "We may have not talked about the things that were most relevant to the audience that was here, but I've worked with Sarah on a number of pieces, and I generally think she's really smart and didn't necessarily deserve the reaction that people gave her."

It wasn't the first time a crowd has started to get a bit energetic, Zuckerberg said. He likes to put a positive spin on it. "People shout things out because they're excited and passionate about what we're doing," he said. "People were shouting out things about, like, Beacon and privacy and things like that. Those were good questions for people to ask."

I asked Zuckerberg half-jokingly if he'd ever subject himself to an interview on The Colbert Report, where host Stephen Colbert has become notorious for putting interview subjects in extremely uncomfortable situations. Zuckerberg wouldn't give a definite answer, but he did say he thinks Colbert is "so funny."

Getting past the hype
Regardless of the media buzz over the SXSWi interview, Zuckerberg said he's still enjoyed himself at SXSWi. "It's been pretty interesting," he said. "I went to this panel on the worst Web sites...it was pretty funny."

But back to Facebook. Zuckerberg has said he would prefer if people focus less on the sensation--the backlash against Lacy, the press over Facebook's $15 billion valuation, his status as the youngest person that Forbes magazine has ever named to its list of billionaires--and more on what his company is actually doing. He reiterated that wish in Monday's interview.

"I feel like a lot of the press coverage around the company is on a few phenomenal events," he said, adding that he'd prefer to talk about "the way in which we help people interact and communicate, both on a subtle level of helping people make connections and increase the number of people that they can keep up relationships with, and increase their trust...(and) the sum of all those connections, and all that communication that's being enabled through the service."

Mark Zuckerberg

OK, fair enough. But he's still Mark Zuckerberg, the tech industry's current wunderkind and Generation Y's foremost example of a future business leader. In today's atmosphere of Project Red, U2's Bono as a Silicon Valley investor, and Bill Gates' "creative capitalism," every high-profile CEO is getting asked how he or she will help save the world. That came up for quite a bit of time in Sunday afternoon's keynote interview with Lacy.

But Zuckerberg said that for Facebook, it's way too early to think about that sort of thing. "I think at this point, because we're not incredibly profitable, we're not at that stage of the company--hopefully we get there--that's not really something that we can do a lot of," he admitted in Monday's interview. "But I'd like to think that just what the company is trying to do in general, just helping people communicate, is actually making the world better."

"A lot of people are actually building really interesting applications that are more to the tone of traditional philanthropy, like the Causes application," he added. "Just by making this development platform, we're enabling some of those things. The way that we're going about it isn't by donating money directly to charity."

Cutting the app spam
Zuckerberg, who steered clear of some of his usual buzz phrases like "social graph" and "social utility," repeatedly stressed that Facebook is a young company and that its focus right now is on growth. Over the next few months, member profiles will be getting a redesign so that the interface is cleaner and runs more smoothly--and cuts down on many of the developer applications that have earned a reputation for being annoying, "spammy," or pointless.

"The direction that it was going in with a lot of platform applications--people would just install a lot of applications," Zuckerberg said. "It wasn't clear that they actually wanted a lot of the boxes that they had in their profiles, but a lot of people didn't take the effort to clean them up, and that kind of made profiles a little more cluttered than we would have wanted, and that also contributed to them being a little slower than we would have wanted."

Consequently, in conjunction with the profile redesign, the developer platform will be getting a bit "smarter." Members will be able to send out more invitations to their friends to join an application, as well as see activity from it in news feeds across the site, if it has high levels of user engagement and people actually like it.

"If an app where almost every request that gets sent gets accepted or that the person acts on it and enjoys receiving that request, then that app should be able to send way more requests or prompt users to send way more requests," Zuckerberg explained.