Four out of 10 iPhones sold to enterprise users, says AT&T exec

Computerworld - Four out of 10 sales of iPhones are made to enterprise users, according to Ron Spears, CEO of AT&T Inc.'s Business Solutions unit, in comments at a financial conference on Thursday.

While that's an impressive figure, it's not quite the same as saying that 40% of iPhones are bought by businesses, which is how some reports have interpreted Spear's comments.

In fact, analysts say it probably is true that 40% of iPhone users buy the smartphone and then use it for personal tasks as well as basic work functions, such as accessing e-mail.

"I'd believe that four out of 10 purchasers of iPhone also use them in business, but to say that 40% of iPhones are being bought by enterprises -- that's ludicrous," said Jack Gold, an analyst at J.Gold Associates LLC.

Spears made the comment that "four out of 10 sales of the iPhone are made to enterprise users" during a Barclays Capital Communications, Media and Technology conference. An audio recording of his comments is available on the Barclays site.

But at least one report, on ZDnet, wrote this headline based on Spears' comments: "AT&T exec: 4 out of 10 of our iPhone sales to enterprises." Gold said if that was true, it would mean that 4 million or more iPhones have been bought by large companies, which he doesn't believe to be the case. "I believe Spears is spinning things," Gold said.

Ken Dulaney, an analyst at Gartner Inc., said the interpretation that 40% of iPhone owners also work in enterprises concurs with Gartner's findings. He said the price and service for the iPhone makes it "more relevant for those people who want it for work and consumer scenarios."

He said most of the people who use an iPhone for work are only using it for e-mail, personal calendar, browsing and voice calls, and not to access corporate applications.

"It would not be accurate for people to conclude [from Spears' comments] that people are building comprehensive applications for offline iPhone operation to the degree that is even found on RIM BlackBerries," Dulaney said. He said some corporate browser applications are being built for the iPhone, but they are limited.

Dulaney also questioned another suggestion Spears made at the Barclays conference: That the iPhone is being used as a laptop replacement. "There is not 100% compatibility with a notebook, and while they probably mean you can live for a while [with an iPhone or smartphone] and without a laptop, ultimately everyone needs either a PC or a Mac to do heavy content creating and analysis."

Spears actually said that some businesses are able to buy an iPhone instead of a laptop, for example, for field workers who only need one or two corporate applications on a daily basis. "Do they need to go out and spend $1,000 or $1,200 for a laptop and then worry about ... the life-cycle costs of keeping up with the laptop?" Spears asked. "It's sort of the ultimate in mobile computing."

Spears also said that with the introduction of the iPhone 3GS last summer, "most CIOs will tell you today they have very few issues around the security." Gold said he disagreed with that assessment, although there's wide consensus that each update of the iPhone has become more secure, and the upcoming iPhone OS 4 operating system will be even more secure.

In April, Apple Inc. said that iPhone OS 4 would have support for SSL VPN via apps from Juniper Networks and Cisco Systems, an improvement from Cisco's IPSec VPN in current versions. Also applications and e-mail will be protected via a device passcode.

Apple has made a steady, if muted, appeal to business and enterprise customers, even if many iPhones in use at enterprises are brought to work by individuals who also want them for personal reasons. The company has a page on its Web site that says of the iPhone: "The best phone for business just got better."

The page includes information on how Apple and AT&T work together on enterprise rate packages.

Matt Hamblen covers mobile and wireless, smartphones and other handhelds, and wireless networking for Computerworld. Follow Matt on Twitter at @matthamblen, or subscribe to Matt's RSS feed. His e-mail address is mhamblen@computerworld.com.

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