Michael Loo didn't want to become an iPhone user at first. "I really fought it quite hard," he says. As vice-president for global IT at telecom equipment vendor Avaya, Loo was concerned that the phone might not keep corporate data secure. Another beef: the iPhone's lack of a keyboard. For a year, his company declined to provide support for employees who wanted to use the device at work. Loo held out even longer.
But Loo and his employer have had a change of heart. In July 2008, when Apple (AAPL) officially released a version of iPhone software with beefed-up security and better support for corporate e-mail, Avaya gave employees the green light. Less than a year later, Avaya counts about 998 iPhone users out of about 9,800 who carry mobile devices. Loo caved a couple of weeks ago.
Like Avaya, many U.S. corporations are embracing the iPhone after initial resistance. Research In Motion's (RIMM) BlackBerry is still the leading smartphone for U.S. corporations, but the iPhone is gaining ground. In a survey of 127 large and midsize companies conducted by consulting firm Osterman Research on behalf of software provider Neverfail, 20% said they supported the iPhone in 2008, compared with 82% that supported BlackBerry devices and 66% that supported devices that run Microsoft's (MSFT) Windows Mobile. Yet, when asked which devices they planned to support in 2009, 44% of those companies said they'd support the iPhone. Support for BlackBerry dropped to 75% and for Windows Mobile to 64%.
Gaining Ground
Apple makes it easier for companies to reverse their iPhone opposition in part through upgrades to the software that make the device more business friendly. A version due in June, iPhone 3.0, will add security and management features expected to make it more attractive to large companies. "It's too early for iPhone to be a serious competitor to BlackBerry in the enterprise, but a year from now it will be," says Ted Schadler, vice-president and principal analyst at Forrester Research (FORR) who on Apr. 14 published a report on iPhone use by enterprises. Schadler points to Oracle (ORCL) and Kraft Foods (KRFT) as two examples of companies that have made the leap. In January 2009, Oracle counted about 4,000 employees with iPhones in its global workforce of about 86,000. That same month, about 2,000 Kraft employees—almost half the company's mobile users—carried iPhones. Schadler says that by the end of 2009, Kraft expects to have 4,000 to 5,000 workers using the device. That represents about 4% to 5% of its total workforce.
Much of the impetus for widening iPhone adoption in business comes from employees themselves. People are purchasing their own smartphones and using them at work to access corporate data or networks. Almost 40% of the smart phone purchases in the U.S. in 2008 were made by individuals rather than corporations, according to IDC. Also in 2008, about 7.3 million smartphones in the U.S. were brought into the workplace. That's expected to grow 43.5%, to 21.5 million, in 2012, IDC says. Economic malaise is accelerating the trend as businesses that once frowned on employee-owned devices are revising the policy as a way to ask employees to share in the cost of equipment. "Companies are looking to tighten their belts and still keep people as productive as possible," says Sean Ryan, research analyst of mobile enterprise at IDC.
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