Companies Shed Initial Resistance to iPhone 2

In 2008, about 173.6 million smartphones were sold worldwide, according to market research firm iSuppli. Nokia (NOK) sold 60.5 million, RIM sold 22.6 million, and Samsung and Apple tied for third place with 13.7 million each. In U.S. corporations today, though, the top three operating systems are BlackBerry, Windows Mobile, and the iPhone OS.

Edging into the C-Suite

Corporate hesitation also diminishes when the CEO or other high-level executives start bringing iPhones to work. Executives say they like the iPhone's Web browsing and multimedia capabilities as well as its ease of use. "IT won't tell the CEO that they won't support it," says Michael Osterman, principal at Osterman Research. This is reminiscent of the way BlackBerry made its way into corporations. Gabe Zichermann says that about 30% of the users of BeamME, his company's iPhone app for exchanging contact info, were C-level executives.

At business analytics software company SAS, co-founder John Sall was among the first to ask the IT department to support his iPhone when it was first released in 2007. "Considering his relationship and his role in the company, we managed to meet that need," says Bob Bonham, senior director of IT at SAS. When the second version of the iPhone software was released in 2008, it included ActiveSync, software that made it easy for the IT department to connect the devices to Microsoft Exchange. At that stage, SAS made iPhones available to employees if there's a business need for them. "Our predominant device is still the BlackBerry," Bonham says. He adds that SAS will eventually let employees choose whether they want to use a BlackBerry, Windows Mobile device, or iPhone. Today, employees who bring their own iPhones to work can have them hooked up to corporate e-mail. Currently, SAS supports about 1,000 BlackBerry devices, 100 to 200 iPhones, and 50 to 100 Windows Mobile devices. The company's total workforce is more than 11,000.

The tech industry isn't alone in early adoption of the iPhone. Others include transportation, entertainment, retail, and life sciences, says Forrester's Schadler. They've become especially popular with doctors. For years, Zach Hettinger, a physician in Rochester, N.Y., carried both a cell phone and a Palm (PALM) device that contained a pharmacy database and other work-related applications, such as vaccine schedules and pregnancy calculators to estimate due dates. "With the iPhone, all those references have become accessible, so that you only need one device," Hettinger says. Today he carries only an iPhone, and he says that his father, also a physician, recently made the switch as well.

Lack of Support

The iPhone isn't for every company, and it hasn't been widely adopted in certain industries, such as banking and insurance, says Forrester's Schadler. Plenty of companies haven't yet decided to let employees use iPhones at work. In July 2007, American Airlines (AMR) Chief Information Officer Monte Ford told BusinessWeek that his company would not support the iPhone due to security concerns. Today, iPhones are still verboten at American Airlines. BusinessWeek parent The McGraw-Hill Companies (MHP) also does not support the iPhone.