Apple iPhone 3G and the Enterprise: What CIOs Wanted vs. What They Got

After months of speculation, Apple yesterday unveiled its next-generation smartphone, the iPhone 3G and solidified its push into the enterprise mobile space with a spattering of business-specific announcements. But how well did these enhancements to the uber-popular device and its software measure up to enterprise users’ expectations?

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Last week, in anticipation of the iPhone 3G’s arrival in stores —which, by the way, won’t be for another month—I asked a group of CIOs about the features they most wanted to see in the next-generation iPhone, as well as what functionality they require for large-scale deployments.

Here’s the rundown of those features that IT executives most wanted, and my opinions on whether or not Apple delivered.

Tighter Security, Remote Management

Back in March, Apple announced that it would license Microsoft’s ActiveSync technology to enable Exchange e-mail, contacts and calendars to be wirelessly pushed to iPhone users’ devices. That was a big step in the enterprise direction: but because the functionality was set to be a part of the iPhone 2.0, which will become available for the first time when the iPhone 3G hits the market on July 11, much of initial excitement had died down since. Apple also spilled very few details on the associated security safeguards that would come along with the Exchange support

Frankly, not much has changed on the security front. Okay, so Apple said the iPhone 3G software will support Cisco IPsec VPN (virtual private network) for encrypted access to corporate networks. But that’s really all the detail we got. And Apple offered even less detail on what, if any, remote management capabilities will be available—though there were some rumbles about remote device wipe and password enforcement.

The company really didn’t mention anything about how administrators will remotely troubleshoot and resolve individual iPhone users’ hardware or software issues. And who will iPhone administrators call for support when they encounter an Exchange issue they can’t solve on their own? If new calendar entries aren’t making it to iPhone calendars, or mail deleted on desktop computers remains on handhelds? Apple? AT&T?? Microsoft?!? So far those questions are largely unanswered…

Bottom Line: Apple made some progress on the iPhone security/management front, but it has a looooooong way to go before truly satisfying enterprise concerns—or becoming a suitable alternative to BlackBerry or Windows Mobile, for that matter.

More Flexible Mail Client

iPhone 3G will support Outlook mail, contacts and calendar sync via Active Sync, as mentioned above, so the e-mail and messaging functionality of the new iPhone will be a vast improvement over the first-generation device.

And the iPhone 3G mail client will also satisfy some of the other hopes the CIOs had, according to Apple, including the fact that e-mail will be readable in HTML format—”Its rich HTML format means email looks and acts like email on your computer,” states Apple’s iPhone page. Calendars will appear much the same on an iPhone as they do via desktop computer—”Color coding makes calendar entries easy to organize and view at a glance.” And users will have access to many of their calendars’ desktop actions—”Tap to accept or decline a meeting invitation. Tap again to see who’s attending, check scheduling conflicts, review the agenda.”

However, the degree to which the iPhone 2.0 software will function with systems like Microsoft Live Communicator and Sharepoint, functionality that Tim Davis, CIO of Popeyes Chicken and Biscuits, told us that he wants, is still unknown.

Bottom Line: You’ve got to give credit where credit’s due, and Apple deserves some here. But the details of how exactly the iPhone mail client will integrate with various Web services remain to be seen.

Stronger iPhone Warranty, Insurance Policy

Albert C. Lee, IT director of New York Media, publisher of New York Magazine and NYMag.com, told me that he thinks the current one-year iPhone warranty offered by Apple/AT&T stinks. More specifically, the existing iPhone warranty covers a very limited set of repairs, and whatever fixes it does cover must be setup through Apple and not AT&T. AT&T also doesn’t currently offer an iPhone insurance plan, though it does offer supplemental insurance for other handsets.

As far as I can tell, that hasn’t changed with the unveiling of iPhone 3G—neither device warranty or insurance were mentioned in Steve Jobs’s keynote yesterday and the related literature on Apple’s site hasn’t been modified.

Bottom Line: Apple and AT&T need to offer a better iPhone warranty and some form of insurance. Period.

Removable/Replaceable Battery

One common complaint about the iPhone is that it lacks a removable battery. This issue was raised by a couple of the IT executives, and though it may seem like a minor feature, the fact that the iPhone’s battery is built in is a deal breaker for many business users—myself included. I carry a spare battery for my BlackBerry in my laptop bag whenever I’m travelling and it has come in handy—to same the least—on numerous occasions.

Such a change would be a major hardware modification, and Apple would most likely have announced the tweak yesterday if it were going to be a reality. The company did not mention the change, and I think it’s safe to say iPhone 3G will continue to lack a removable or replaceable battery.

Bottom Line: If Apple wants to become a serious contender in the enterprise smartphone space, is should seriously consider the needs of business travelers and release an iPhone that functions with a backup power supply.

Video: Steve Jobs Introduces the iPhone 3G

More Robust Phone Feature Set

Perhaps the most notable phone/messaging feature missing from the first-generation iPhone is a cut-and-paste function. Hugh Scott, VP of IS for the wholesale business unit of Direct Energy, pointed out the iPhone’s lack of cut-and-paste in a review he performed for CIO.com.

The addition of such a feature would be big news to iPhone users, and I have to believe Apple would’ve mentioned it yesterday if cut-and-paste was going to find its way into iPhone 3G. Frankly, I can’t believe the company would leave this feature out AGAIN, as it has been one of the leading complaints about the iPhone’s feature set from the start. But it looks as though Apple doesn’t think cut-and-paste is so important, because iPhone 3G does not appear to have gained the functionality.

The lack of a video recorder has also been another longstanding complaint from iPhone users, including Scott, and surprisingly, Apple did not announce the addition of this functionality in the next-generation smartphone either. In fact, Apple didn’t even upgrade to the 2.0MP camera on the phone.

Bottom Line: Without a cut-and-paste function, the iPhone is one of the least intelligent smartphones on the market—at least when it comes to the basics. BlackBerrys and Windows Mobile devices, among others, have had cut-and-paste for years. The lack of such functionality represents a serious hole in the iPhone’s armor. As for video recording, this feature won’t likely make or break any corporate iPhone deployments, but it sure does seem strange that a device that’s marketed as a multimedia machine, lacks simple video recording capability.

Final Conclusion: Apple made some big strides yesterday toward making the iPhone a more suitable device for both business users and the IT organizations that support them. The company not only opened the door to enterprise, but also took a few steps over the threshold, and it’s sure to see many more enterprise customers over the coming year. However, put simply, Apple’s task is to transform a device designed for consumers into one that’s not just suitable for business users, but truly valuable to them—at least if it ever wants to take a bite out of RIM’s dominant market share. To do that, Apple still needs to address a variety of issues, many of which we’ve noted previously.

So that’s how the 3G iPhone—what we can see of it right now–measures up to CIOs’ wishes. What do you think? Is the iPhone well on its way to becoming the next great business smartphone? Why or why not? And how about Apple/AT&T’s clever attempt to fool us into thinking they’d actually cut the iPhone’s price in half?

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