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JPMorgan Said to Test IPhone, BlackBerry Alternatives

Sept. 10 (Bloomberg) -- JPMorgan Chase & Co. may soon let employees use iPhones for corporate e-mail, making it an alternative to Research in Motion Ltd.’s BlackBerry at the bank for the first time, two people familiar with the situation said.

JPMorgan is testing the Apple Inc. device and smartphones based on Google Inc.’s Android software, said the people, who didn’t want to be named because the plans haven’t been made public. The bank is the second-largest in the U.S. by assets and has about 220,000 employees worldwide.

UBS AG, Switzerland’s biggest bank, said it is also considering allowing its staff to use iPhones for company messaging as more of them opt for the Apple product. UBS has more than 63,000 employees.

Apple and Google are making inroads in RIM’s traditional stronghold with corporate customers, after their devices first caught on with consumers. Standard Chartered Bank Plc said in May it’s switching from the BlackBerry to the iPhone for employees and expects to have 15,000 distributed by year-end.

“This phenomenon is very new and we expect it to put increased pressure on RIM’s performance,” said Pierre Ferragu, an analyst at Sanford C. Bernstein Ltd. “BlackBerry isn’t the only alternative to offer employees mobile e-mail.”

RIM fell 90 cents, or 2 percent, to $44.12 at 4 p.m. New York time in Nasdaq Stock Market trading as the Nasdaq Composite Index edged up 0.3 percent. The stock has lost 35 percent of its value this year, while Apple has climbed by a quarter.

Security Tests

The tests aren’t limited to banks. Vanguard Group Inc., the largest U.S. provider of stock and bond mutual funds, also is trying out the iPhone with 300 workers and will let employees companywide use the device soon, said Joshua Grandy, a spokesman.

JPMorgan is testing for security in batches of a few hundred devices with a decision expected later this year, one of the people familiar with the matter said. JPMorgan wouldn’t buy iPhones or Android phones for employees, as it now does with BlackBerrys. Rather, the bank would allow employees to use the devices to send and receive corporate e-mail if they make the purchase themselves, the other person said.

Jennifer Zuccarelli, a spokeswoman for JPMorgan, and Natalie Harrison, an Apple spokeswoman, declined to comment. Marisa Conway, a spokeswoman for RIM, also declined to comment.

Linking to E-Mail

UBS doesn’t plan to replace the BlackBerrys it issues with iPhones anytime soon, spokesman Jean-Raphael Fontannaz said by telephone from Zurich. Rather, UBS is testing the possibility of allowing employees to use an iPhone or another smartphone to connect to UBS’s e-mail system without restricting the private use of the device, he said.

“There are certainly quite a few employees that have private iPhones, and as a bank we have to ask ourselves if that could be an option for us,” he said.

RIM’s share of the global smartphone market slid to 18.2 percent in the second quarter from 19 percent a year earlier as customers opted for rivals’ phones with larger screens and more applications, according to research firm IDC. Apple’s share rose to 14.2 percent from 13 percent, while Android surged to 17.2 percent from 1.8 percent.

Apple said in July that more than 80 percent of the Fortune 100 companies are deploying or testing the iPhone. The Cupertino, California-based company has taken steps to improve the iPhone’s security, such as strengthening encryption tools, adding the ability to set longer passcodes and integrating with servers that could wipe out or lock an iPhone if it’s lost.

Growing Movement

More companies are set to follow suit, according to an August survey done by Sanford Bernstein.

Of 200 companies polled in the U.S. and U.K., 74 percent now let their employees use devices other than BlackBerrys, the research showed. For the U.S. alone, the figure was 83 percent.

Cost savings and employee preference were the two biggest factors cited by companies for the shift in the Sanford Bernstein survey. Employees would rather own an iPhone and are increasingly willing to buy the device themselves, which helps cuts costs as companies look to rein in spending, said Sanford Bernstein’s Ferragu.

Other research suggests BlackBerry loyalty may be fading among the bankers, lawyers and government workers who drove RIM’s initial success. About 42 percent of BlackBerry users say they want to stick with the brand when they buy a new phone, according to an August survey by Nielsen Co. The rate is 89 percent for iPhone owners and 71 percent for Android devices.

To contact the reporters on this story: Hugo Miller in Toronto at hugomiller@bloomberg.net; Elena Logutenkova in Zurich at elogutenkova@bloomberg.net; Adam Satariano in San Francisco at asatariano1@bloomberg.net

To contact the editor responsible for this story: Peter Elstrom at pelstrom@bloomberg.net

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