The iPhone Eyes BlackBerry's Turf

But Apple still has a ways to go to catch up with RIM in the lucrative corporate market

When he unveiled the next-generation iPhone on June 9 in San Francisco, CEO Steve Jobs made it clear that he's determined to turn Apple (AAPL) into a much bigger player in the mobile-phone market. Among other things, he slashed the price for the entry-level iPhone to $199, half that of the previous edition and right in line with what competitors' high-end phones cost. The move seems certain to attract new customers, especially consumers who had been turned off by the higher price. "Everyone wants an iPhone," Jobs said. "But we need to make it more affordable."

Jobs is serious about winning over corporate customers, too. Besides the lower price, Apple is boosting the speed at which the iPhone can pull in e-mail and other corporate data and making sure the device works with popular corporate e-mail programs, such as Microsoft's (MSFT) Exchange. The company has even opened up the iPhone so that outside software developers can create their own programs for the device. "We sort of checked the boxes on everything [that corporations] wanted," says Timothy D. Cook, Apple's chief operating officer.

The gold standard

But the company still has work to do to become a serious contender in the lucrative corporate market. Apple is going up against Research In Motion (RIM), the company behind the BlackBerry wireless devices so popular in executive suites today. RIM, which already has a huge lead in the market, offers corporate customers several capabilities that Apple can't yet match. "RIM is really the gold standard," says Ken Dulaney, an analyst at the market research firm Gartner (IT).

Particularly important to corporate users is RIM's reliability and flexibility. The Waterloo (Ont.) company runs its own wireless network so that it can make sure e-mails are delivered in a timely fashion. Apple will rely on partners, including AT&T (T) in the U.S., to handle such services. RIM also has spent years developing capabilities that corporate tech managers want. "Apple doesn't have all the tools that RIM has built up over the years," says Shiv Bakhshi, an analyst at market researcher IDC. For example, tech managers can remotely disable the camera or Bluetooth on a BlackBerry if they choose or delete everything on the device should it ever get lost. Apple says the iPhone can be wiped clean by tech managers, but it doesn't offer the more sophisticated features available from RIM.

RIM also has a head start in getting the critical software for corporate operations to run on its devices. Apple says that 250,000 programmers have downloaded the software developers' kit that can be used to create applications for the iPhone. But most of the software so far is for consumers, including the Super Monkey Ball game from Sega that Apple showed off at its San Francisco event. SAP and Oracle, both partners of RIM, haven't yet developed for the iPhone versions of their software for inventory management and other corporate operations, although SAP is planning do so.

Can Apple catch up? Ralph de la Vega, chief executive at AT&T's wireless unit, which sells both iPhones and BlackBerrys, says the iPhone will offer strong competition for RIM, Microsoft, and other rivals. "It's probably the best device we have to develop corporate [software] specific to [each] company," he says. "It's the wave of the future."

    Before it's here, it's on the Bloomberg Terminal.
    LEARN MORE