Apple Opens iPhone to Business Users, Software Developers

Published on: 6th March 2008

CUPERTINO, Calif. -(Dow Jones)- Apple on Thursday took its first steps to selling business and consumer-focused software for its iPhone, a move that heightens Apple's competition with major cellphone powers Research In Motion and smartphone king Nokia.

At an event at its headquarters in Cupertino, Calif., Apple unveiled iPhone features meant for businesses and released a set of instructions to create iPhone software programs. The moves are seen helping the consumer electronics giant meet its goal of selling 10 million iPhones by 2009.

Apple said Thursday that it has 28% of the smartphone market. In January, the company said it had sold four million iPhones.

Businesses have shied away from the iPhone because it doesn't work well with their email systems. Thursday, Apple said iPhones will work with Microsoft's Exchange software, widely used by businesses to handle and secure email. Terms of the licensing agreement with Microsoft were not disclosed.

The consumer electronics giant also touted virtual private network capabilities, which allows a device to remotely access a company's internal network, as well as the ability to wipe data from lost or stolen phones.

"This is exactly what businesses have been waiting for," said Phil Schiller, Apple's senior vice president of worldwide product marketing. The company mentioned that employees at Nike and Genentech are using the iPhone.

Apple shares recently rose 56 cents to $125.03.

The introduction of enterprise capabilities is attractive to carriers such as AT&T because business customers often pay for more lucrative data and phone plans and commit to longer contracts. The phones are also sold to large groups of employees, rather than individuals.

"By more tightly integrating software into the iPhone, and into corporations, Apple may get another full percent of all phone's sold. That's another 100 million phones, that's huge upside for Apple," Burton Group analyst Paul Debeasi said.

Apple also released a set of instructions to create iPhone software programs and introduced a way to sell the downloadable software through its iTunes online store, with Apple taking a cut of the profits.

The company said it's releasing the same set of developer tools that its own engineers use. Before Thursday, some developers speculated that Apple would only release a more limited set of tools to diminish the risk of viruses and other tampering. With the release of the kit, Apple said, developers would be able to make programs for iPhone's address book and location feature.

The social network MySpace and Slingbox Media are among those said to already be developing iPhone add-ons. MySpace is owned by News Corp, which owns Dow Jones & Co., publisher of this newswire.

At the event, Apple said Time Warner's AOL has made an instant messenger application for the iPhone, called "AIM For iPhone." In addition, Salesforce.com has built a tool that allows the iPhone to access 63,000 features that Salesforce offers.

The release of the developers' kit jump starts a potentially $1 billion a year business for iPhone software add-ons like games or calendars, which could add 1 cent or so a share of potential profit. Apple thinks the potential library of thousands of downloadable iPhone programs could make the iPhone a more potent challenger to the Blackberry, the leading smartphone used by businesses, plus No. 1 consumer smartphone seller Nokia's lineup. The move also primes the iPhone for sales in competitive markets in Asia this year.

Since going on sale last June, Apple's iPhone has captured 28% share of market for smartphones, which are cellphones capable of tasks like posting a video blog or other tasks usually performed by computers. For now, smartphones represent less than a percent of all phones sold, with Nokia leading the category and Research In Motion No. 2, but they are the fastest growing category of phones, and sales are expected to double over the next two years, as prices drop.

Other potential iPhone sales catalysts include a version for faster wireless networks as well as a price cut, analysts say.

-By Ben Charny, Dow Jones Newswires; 415-765-8230; ben.charny@dowjones.com

(Roger Cheng contributed to this report.)

(END) Dow Jones Newswires

 

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