When Pyxis Mobile began selling business software for mobile phones in 2004, there were only a couple of major alternatives to choose from: Research In Motion's (RIMM) BlackBerry and devices running Microsoft's (MSFT) Windows Mobile software. Today the market for sophisticated smartphones that can run advanced software is exploding. Besides RIM and Microsoft, the choices include Apple's (AAPL) iPhone, Nokia (NOK) phones that run the Symbian operating system, Motorola (MOT) phones that use Google's (GOOG) Android software, and Palm's (PALM) new Pre, which hit the market June 6.
For hundreds of software developers that create applications for the corporate market, this abundance of choice is a doubled-edged sword. While more people are using smartphones, developers can't afford to create different versions of their applications for every kind of phone. If they choose to focus on the wrong device, they waste money and time. "It's one of the reasons my hairline is receding," laments Pyxis President Todd Christy. At the same time, developers will have a major say in which companies dominate the mobile computing world: Corporate customers will gravitate to devices with the best applications as well as the best security.
Although these are still early days, RIM, Microsoft, and Apple look like the top picks. Apple, traditionally strong with consumers but weak with business customers, added to the iPhone's corporate appeal when it announced new software June 8. The device is getting features specifically for business, including more secure communications and the ability to disable lost or stolen phones remotely.
It's emblematic of a broader shift in the market. Most of the early mobile applications have been for consumers and are free or cost less than a buck. Now business-software developers are moving into the market in growing numbers, and they stand to make real money—up to thousands of dollars for programs that help run a company's operations. They see opportunity as the number of mobile workers is expected to rise to nearly 1 billion in the next few years.
So far, RIM leads the corporate side of the smartphone market. Sean Ryan of researcher IDC figures it sold 17.5 million BlackBerrys for business use last year, compared with 11.6 million Windows Mobile devices, 9.8 million phones running Symbian, and 3.9 million iPhones. But the iPhone has shaken up the market by creating demand for phones that are easy to use and pack a variety of applications.
MeLLmo, one business-software developer, is targeting the iPhone for its first product, RoamBi. The soon-to-be-launched software makes it easy to present data graphically on a compact smartphone screen. The company is evaluating the alternatives to the iPhone. "The industry will have room for three or four at the most. I'm sure Apple and RIM will be there for the long term. The others, I'm not sure," says MeLLmo Chairman Santiago Becerra Sr.
NetSuite Votes for the iPhone
The iPhone is showing surprising strength among software companies that might be expected to target RIM first. NetSuite (N), a developer of financial and customer management software delivered via the Internet, chose the iPhone as the initial target for mobile software it is just now releasing. "We see iPhone as groundbreaking technology," says NetSuite Chief Technology Officer Evan Goldberg.
To win over developers, the smartphone rivals are offering software tool kits that make it easier to build applications, helping with marketing, and creating online marketplaces modeled on Apple's App Store, where phone users can easily download applications. RIM's BlackBerry App World, launched in April, offers only 1,000 applications. But RIM gives developers 80% of the revenue, instead of the 70% cut at Apple. "These are serious applications for business," says RIM co-CEO Mike Lazaridis, referring to the fact that many applications on Apple's App Store are games or lightweight fare for consumers.
RIM designed the BlackBerry from the ground up as a business computing device. Corporate IT departments are focused on keeping their information secure and on controlling the use of computing devices, including smartphones. They tend to standardize on BlackBerry, since RIM supplies technologies that address their security and control requirements.
Today, RIM. Tomorrow, Apple
RIM can't afford to be complacent, though. Coca-Cola Enterprises (CCE), which chose the BlackBerry for a recent mobile workforce project, is keeping its options open. "Today we partnered with RIM, but tomorrow it could be Apple or the Google Android program," says Esat Sezer, CCE's chief information officer.
For now, Pyxis Mobile's Christy is channeling most of his resources to BlackBerry apps, but he is hedging his bets. The company offers versions of its products for Windows Mobile and has iPhone software on the way. "We don't see much weakening of the hold that BlackBerry has in the corporation," says Christy, "but it's a crazy market to predict."