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IPhone improvements OK, but not a sure thing

Apple's iPhone intentions may be good for the business world. Or they may not be. Proceed with caution, Gartner says.

Earlier this month, Gartner Inc.'s position on iPhones in the business was simple: Don't use it.

Now the wisdom from the powerhouse analyst firm goes like this: Use it if you want, use only the basics and don't expect any favors from Apple Inc.

"Formally, this is a consumer company that wants to remove some of the roadblocks for enterprise buyers," said Ken Dulaney, a vice president and distinguished analyst at Stamford, Conn.-based Gartner. "They want to make sure that they can tap into the millions of users out there."

Apple earlier this month announced a software development kit (SDK) for the iPhone and said the popular consumer device will soon support Microsoft Exchange ActiveSync, giving users the opportunity to tie into work for email, scheduling and security features. Both announcements are part of a strategy to bring enterprise business to the iPhone.

But that doesn't mean Apple is all of a sudden going to completely swing its eyes toward the business market. Dulaney has spoken with two Gartner customers who said the attitude from Apple in early partnership discussions was: "You need to tell me why Apple should work with you."

Never really synonymous with business, Apple will be heading into new ground with its enterprise iPhone pitch.

"They just don't know the enterprise," Dulaney said. "It's been so long since they've been in there that they don't really have a pulse for how IT works. Now the iPhone could help them get in there."

And the iPhone is sure to remain a consumer-oriented product, one that still includes iTunes, a feature that can't be removed.

Still, the March 6 announcement that the iPod will support Microsoft Exchange ActiveSync means many of the reasons Gartner previously warned CIOs away from iPhone have been voided.

For instance, a remote wipe feature can now be used if the phone is lost or stolen and the phone can force changing, complex passwords. That's a significant step forward for a device that previously had no security features to serve most businesses' needs.

So for the time being, Dulaney and Gartner see the iPhone as safe to use in a limited capacity. Email and personal information manager functions used through Exchange should be safe. And Apple is telling analysts that the upcoming June release will have a comprehensive set of business-oriented email features like the ability to accept appointments.

[Apple doesn't] really have a pulse for how IT works. Now, the iPhone could help them get in there.

Ken Dulaney, distinguished analyst, Gartner Inc.

Microsoft is far from the only company jumping on with the iPhone. The unveiling of the SDK has a whole host of companies angling to share in iPhone's success. Adobe Systems Inc. is trying to flesh out exactly how it will work with Apple to bring Flash to iPhone browsing. And Sybase Inc. on March 18 announced that its Information Anywhere Suite will allow iPhone hookups for Microsoft Exchange and Lotus Domino servers.

Sybase product management director Senthil Krishnapillai said current iAnywhere customers have been asking for iPhone support, something Sybase has been working on since last fall and will continue to work on using the SDK.

"I think it's pretty significant," Krishnapillai said. "From our standpoint, iPhone is certainly an enterprise device.

"Apple's gone a little way with the enterprise announcement," he said. "They are talking about opening up the management capabilities."

Krishnapillai said Sybase customers looking to use the iPhone are most concerned about secure support and management capabilities.

Gartner's adjusted recommendation comes with a caveat, though. Apple does not historically preview or brief analysts and customers on the future of a product. That left Dulaney warning business users off the iPhone at a keynote address at a Gartner conference this month. One day later, Apple CEO Steve Jobs made the Exchange announcement, immediately rendering Dulaney's comments old news.

As a strategy for selling in the consumer market, that may make sense. But business users are making larger purchases and buying for the long term. Broadly implementing iPhone in the workplace leaves a CIO operating somewhat on faith.

Because of that, and because there is no alternative hardware supplier or "wide choice of mainstream databases and back-end connectivity," Gartner is urging caution to those using the iPhone for any new applications beyond the basics.

Still, the popularity of the phone is undeniable. Dulaney said he expects "significant inroads" for Apple, held back only by the price (iPhone starts at $399) and lack of carrier diversity. Apple has an exclusive contract with AT&T.

But with another 10 million phones in production, Dulaney said, Apple could bite into Research In Motion Ltd.'s hold on the market with BlackBerry.

"I think it could take some from Microsoft and it could take some from Symbian," Dulaney said.

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