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Apple iPhone: Market Sustainability?

The views expressed below are solely the views of the posters and do not reflect the views of Boy Genius Report, Inc.

Jibi: From my treasure chest of retained memory, I cannot honestly recall a single ‘smartphone’ device that has managed to sustain a strong heartbeat without the support of Corporate America, or it’s step-siblings around the globe, pushing it’s success. There has been so much hype and so many rumors leading up to the Apple iPhone’s launch in a couple weeks that it’d be silly not to think that initial sales figures should propel somewhere into the stratosphere, but is the initial, short-term sales figure really what Apple wants, or even what AT&T is expecting to receive in return for selling it’s soul? Check out the rest of my thoughts after the jump, and some commentary from BG below it!

The main reason BlackBerry and Windows Mobile devices have been so successful in recent years is the adoption rates within the business sector. Sure, as it’s been reported time and again over the last year or two, there’s a lot of untapped resources within this future industry that promises a potential market share that could rival Big Pharma, but I cannot honestly see how the release of this particular over-hyped device will permeate the exterior walls of the Fortune 1000 companies or large government agencies. In order to ensure some sort market sustainability, these agencies and companies are where adoption is key for Apple and AT&T; without their acceptance and blessing of the iPhone, it will end up being nothing more than a consumer novelty item that will replace your personal cell phone and your iPod – it will NOT replace your BlackBerry.

Does Corporate America feel the heat of the iPhone craze? Sure. It’d be stupid and narrow-sighted to think otherwise. Within my company, concerns have been mentioned time and again, and we feel that it’s inevitable that people will be seen with these devices right and left. Does that mean they are approved, accepted, and supported? Absolutely not. The general consensus is that these devices will be obtained through personal channels and not through corporate-sponsored and supported purchases, which is already a huge red flag concerning smartphones within most companies. Companies around the world are gearing up for the device launch by drafting policies barring the use of the iPhone or providing reasons why it’s not to be added to corporate-support device lists.

There are simple reasons why this first generation iPhone will not receive adoption within Corporate America. For one, there’s no support provided for existing messaging platforms, whether it be Microsoft Exchange, IBM Lotus Domino, or Novel GroupWise, or messaging interfaces, such as BlackBerry or GoodLink or Direct Push. Does Apple think we’ll move our corporate messaging system to Yahoo to accommodate Push-IMAP? Yeah, I see that suggestion being well-received by the Information Security officers.

The Apple iPhone has no means of tunneling or secure communications back to an internal network, either. Sure, this may be a possibility with a future VPN client from the likes of Cisco, by way of their mutual agreements on the iPhone nomenclature, but at the time of the device launch, there will be no such VPN clients and thus no intranet connectivity. Oh, and let’s not forget the lack of corporate-ready messaging clients, either. In this day and age of security-conscious IT departments, large companies no longer offer IMAP or POP3 support to their internal messaging platform, so rule out the built-in interval-based retrieval of e-mail over these traditional protocols.

Lastly, where’s the friggin’ keyboard?! I keep hearing about this virtual touch-screen keyboard that’s light-years beyond current technology. Sure, the vector-based browser rendering is awe-inspiring to look at, but the lack of a real keyboard will make browsing almost painful. And let’s not even get into messaging technologies, such as consumer-based e-mail functionality and text messaging. I suppose this feature will be flagged as ‘wait and see’ before final judgement will be passed. I can only think of similar past innovations in virtualized keyboarding and the success rate of these products (and the fact that I cannot recall a single one succeeding is obviously having a biased impact on my assumptions of the iPhone’s “keyboard”).

The Apple iPhone will have early success; Apple and AT&T have all but ensured this fact. It’s rare that Apple has failed with any product launch since the re-crowning of Steve Jobs and the first generation iMac. However, Apple has also been known to release rather faulty first generation products that tend to get better in the second and third and beyond generations – they never get it ‘right’ in the first go-round. Until the next generation iPhone is released, or until third-party application development and porting is opened up to allow integration within the messaging infrastructures of Corporate America, not web-based applications, do not expect to see long-term growth and sales figures to be anything to marvel about (although failed expectations may be mentioned in conversation). 

Boy Genius: Jibi’s made a great point — Corporate America won’t embrace the iPhone. Nor should they. After all, this isn’t targeted at the business market. This is a consumer product that enables the user to stay in touch through multimedia, occasional emailing, web browsing, and phone calls. When Apple set forth with their master plan to “revolutionize the mobile industry,” they surely thought to themselves, “what market are we aiming for here?” I don’t think that anyone in their right mind expects Fortune 500 companies (or even small businesses for that matter) to ditch their BES servers, and Exchange servers to switch 50,000 users to the iPhone. This is a consumer product, marketed towards consumers. I also think that when the hype has settled down, you will see a lot of enterprise users actually carrying this device. Yes, they will have two phones (as if they didn’t already). They will still have a BlackBerry on their hip. RIM has “freed” a lot of suits from boredom and I think the iPhone will too — just in a different way. When you look at the grand master plan, it seems as if an Apple server nestled deep inside the wireless carriers network is required to enable all of the iPhone’s features. Much like the T-Mobile Sidekick, or the BlackBerry. This is genius on two levels. One, it deters a number of people from using the handset outside of the intended network. Sure, people like us will either find a way to enable the features if possible, but if not we might be content with a touchscreen video iPod that can use WiFi to browse the web and check emails. Yet, I don’t really see consumers shelling out $500-$600 for a product, and not be a little nervous about losing the internet and cellular functions if they’ve strayed from the intended carrier’s network. Second point, is that the next Apple iPhone product we see, might actually be geared towards the corporate market. Apple will have a nice little head start by integrating these servers already. And lord help us if that happens. Anyone care to guess what the iPhone will sell the first week? My bet is around 250,000 handsets the first week. It’s gonna’ be a fun summer! What do you guys think?

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