Apple has set its sights on a corporate audience for the iPhone, which has been a hit with consumers. Getty Images
Steve Jobs has never been much for suits, wearing them or selling to them. His own fashion taste leans to jeans and mock turtlenecks, and almost all of the products created by Apple since his return to the company a decade ago are aimed at consumers.
But now Jobs wants to go corporate. On Mar. 6, at its Cupertino (Calif.) campus, Apple (AAPL) is expected to announce a strategy to use its Web-browsing iPhone to move into the corporate market. Apple will likely unveil plans to spur development of more software for the phone, to improve security on the device, and to make it compatible with popular e-mail systems such as Microsoft's (MSFT) ubiquitous Outlook. Such steps may make corporations more willing to approve the iPhone for use by their employees. The moves will put Apple into direct competition with Research In Motion (RIMM), whose BlackBerry devices now dominate the wireless e-mail market.
The corporate push comes at a time when Apple badly needs a new source of growth. The company's shares have fallen 35% so far this year because of slowing iPod sales and softening consumer spending. The iPhone may well represent Apple's best chance in years of tapping the corporate market. Not only will employees be more likely to afford the phone's steep $400 price tag with their company's help, but many are already hankering for fashionable, useful alternatives to the BlackBerry and other existing devices. "The next big battleground is the wireless [market for corporations]," says Rich Nespola, chairman and chief executive of Management Network Group, a telecommunications consultancy.
Winning Over CIOs
But Jobs will face a world of new challenges. Apple needs to build up credibility with corporate buyers after years of largely ignoring them. Apple may have to change its business model to cater to their needs, and it'll have to be more open with partners, so independent software developers can create applications for the iPhone that corporations want. Even the iPhone's keyboard may need a rethink. While the BlackBerry has a tactile keyboard that allows for easy typing with two thumbs, the iPhone requires people to type on a touch-screen keyboard, usually with one finger, which many find awkward and slow. William Markey, president of telecom consultancy RelevantC, is skeptical of Apple's prospects. "What's the business case for the iPhone? Being able to listen to music on your [work] cell phone?" he says.
The people Jobs will have to win over are chief information officers, the folks who decide what technology corporations buy. Most CIOs want to support as few devices as possible, for the sake of simplicity and cost, and many of them have already invested in RIM's technology—both the BlackBerry devices and the RIM servers that ensure e-mail remains up-to-date and secure from prying eyes. RIM has become the leader in the market, with 12 million users, by appealing to both CIOs and top executives. "They're not called CrackBerrys for nothing," says Markey.
Corporate vs. Consumer Sales
To take on RIM, experts say Apple will need to develop server technology far more complex than what it has today. Once a company adopts the iPhone it needs to be sure its software is always up-to-date, secure, and working glitch-free with other mobile technologies. Complex policies must be developed, including ways to disable iPhones the moment an executive reports one lost. And rather than 9-to-5 call centers, big corporate clients require support 24 hours a day, seven days a week.
Jobs himself has argued it's nearly impossible for a technology company to succeed at selling to both companies and consumers. There are different profit margins and cost structures. And the differences go beyond financials.
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