IPhone 'wow' factor fails to tempt CIOs

CIOs are excited to try out Apple's new iPhone, but they'll take a wait-and-see approach before deploying it to their users.

When Apple Inc. CEO Steve Jobs unveiled the iPhone at Macworld, it's likely he was received in some corners of

the media universe with more enthusiasm than Moses when he delivered the Ten Commandments.

Consumers and devotees of iPods and the Macintosh platform are understandably excited about the sleek new device. Many CIOs are also excited about the iPhone, but they were more than a little skeptical about replacing corporate BlackBerrys, Treos and other mobile devices with it.

Bottom line -- we'll stick with the Blackberry, but we'll get a great deal of pressure from folks who want the latest thing.
Michael Carper
divisional vice president of technology operationsColdwater Creek Inc.
Kevin Lupowitz, CIO of Liquidnet Holdings Inc., a New York-based institutional investment brokerage, said his company's mobile provider of choice is Verizon Wireless, so Apple's exclusive deal with Cingular Wireless LLC is a major roadblock. He'll keep his users on Treos for now.

"I'm also disinclined to use first generation of anything that is associated with mission criticality," Lupowitz said. "I'm very excited about the iPhone, but until I've seen some real case studies of how it stands up to real-world usage in a corporate environment, and how it adds productivity or interoperates with existing standards, I'll hold off on bringing this in-house."

The iPhone was introduced by Jobs Tuesday at the Macworld Conference & Expo in San Francisco. The much-ballyhooed gadget combines Apple's iPod music and video player with a mobile phone and wireless Internet access for e-mail, the core function of the BlackBerry and Treo.

Apple shares rose 4.8% on Wednesday to an all-time high of $97.

Too expensive, too trendy

But despite all the breathless buzz about it, Apple might have a tough sell at least at the outset.

First, it's pricey -- likely to sell from $500 to $600 -- a bit much for some CIOs, say analysts.

"Show me why I would pay $600 for this thing," said analyst Jack Gold, president of J. Gold Associates in Northborough, Mass. "I can buy a BlackBerry for $190 and then go out and get an iPod for the same price. I don't think RIM and Nokia have anything from the business perspective."

Barry Kadets, CIO and vice president of Gemline, a Lawrence, Mass.-based promotional products distributor, said his company will keep its BlackBerrys.

"I think [the iPhone] is too expensive right now," Kadets said. "It does not give my organization any major benefit."

Gold said a business user is going to want a good phone first.

"An entertainment device is secondary," he said. "Apple has got to prove to me as a user that it's a good phone, that it works within my world, that I can do push email on it. They haven't said how that's going to work yet."

Second, as an entertainment proposition, the iPhone doesn't offer 3G high-speed Internet access, at least not yet. Die-hard iPod users might be a bit disillusioned. Are any of them willing to nix the high-def movies on that six-hour flight to the coast?

And on Wednesday, networking giant Cisco Systems Inc. filed suit against Apple, claiming the iPhone violates its trademark. According to reports, Cisco has held a trademark on the name iPhone since 2000 and wants the court to stop Apple from using the name.

Still, Jobs said he expects Cupertino, Calif.-based Apple to sell 10 million units in 2008. If that happens, Research In Motion Ltd. and Palm Inc., which already face increased competition from Motorola Inc. and Nokia Corp., will have a serious market share fight on their hands.

Just another app to support

Nic Roberts, vice president of information services at GreenStone Farm Credit Services in East Lansing, Mich., said he understood the "wow" and "cool" factors of the iPhone, but he'll stick with Windows Mobile devices because the iPhone "represents another OS in our environment and we are trying to consolidate, not expand."

Michael Carper, divisional vice president of technology operations at Coeur d'Alene, Idaho-based retailer Coldwater Creek Inc., said he has no intention of taking away his company's BlackBerrys. Carper doesn't like the idea of managing the desktop software he thinks will be required for integrating iPhones with messaging systems.

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"In general I think that's bad for corporate IT environments. We generally don't need one more application to install on corporate computers," Carper said. "And [BlackBerry maker] RIM has already solved that with their integration to Exchange."

Carper added that he isn't going to purchase devices because they're entertaining, as the iPhone is sure to be. Plus, he knows iPhones would only encourage his employees to download music.

"At last count we had 60,000 MP3 files stored on our network and we're about to get rid of them," Carper said. "Bottom line -- we'll stick with the BlackBerry, but we'll get a great deal of pressure from folks who want the latest thing or feel a need to get the company to purchase an MP3 player for them."

Like Carper, Jack Gold said he's skeptical of a business device that allows employees to download music and movies. "Are you listening to 12 hours of music every day instead of answer phone calls and draining from the battery?"

Sees business value

Chuck Kramer, who uses a personal Apple MacBook, said he's not an Apple "fanboy," but he is more hopeful about the business potential of the iPhone. Kramer, senior vice president and CTO at Social & Scientific Systems Inc., a Silver Springs, Md.-based provider of biomedical research support and data analysis, said his company has been flipping between standard mobile devices, based on international support available in developing nations. "I would prefer to use a single OS, but that just isn't possible."

He admits to seeing tremendous business value in the iPhone's design and operation, even though the software selection may be lacking and said Apple may have managed to finally make a portable pocket device that will be truly useful. Current handhelds, including BlackBerrys, either don't have complete mail management functions or require too much back-end infrastructure to do it right, he said.

"If the Exchange (and I guess the Notes, too) integration is present, and it is a reasonably full-feature OS, I can just imagine the possibilities for communication management that will be available."

Let us know what you think about the story; email: Shamus McGillicuddy, News Writer

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