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IT Strategy: iWant iNeed

The iPhone frenzy proves that businesses would do well to adopt cutting-edge consumer technology

David Rae

In case you’ve just got back from Mars, Apple has launched a phone. And even
if you have just returned from Mars, I’d bet my mortgage that you’d soon work
out what it’s called.

The much-hyped iPhone went on sale at the end of June and during the first
two days half a million were sold at a whopping £300 each. There’s no doubt that
Steve Jobs, Apple’s CEO and founder, knows how to make a cool gadget – even less
doubt that he knows how to market one.

The iPhone-effect has been pretty staggering: so excited were American
consumers that queues began to form outside a New York retailer four days before
its 29 June launch date. And AT&T, the exclusive provider of the handset in
the US, sold out of the device at most of its 1,800 stores within 24 hours of
the thing going on sale.

It’s hardly surprising that the device caused such a stir – its sexy,
touch-sensitive screen with integrated 8GB iPod, web browser and email client is
everything the modern teenager needs (save perhaps for a bad haircut). In fact,
it’s the kind of aspirational toy that almost everyone would want to get their
hands on (which is reflected in Apple’s share price: since the iPhone was
announced in January it has risen almost 50%, adding about $34bn to the
company’s market cap).

Momentum is beginning to gather in the UK, too. O2 has reportedly won a
fierce battle with Vodafone to become the UK’s exclusive iPhone partner, and
negotiations are believed to be ongoing with retailers. This time, the
importance of the news was not lost on UK investors, and Vodafone’s share price
dropped a couple of percentage points following rumours of the O2 exclusivity

Of course, there’s no such thing as a free lunch. Although competition for
the iPhone contract was high, so was the cost. Apple is believed to have
insisted on a share of all revenues generated by each iPhone customer. If the
likes of Motorola or Nokia had attempted to strike such a deal, they would have
been laughed out of the boardroom.

Whichever network wins the deal, the device is expected to hit the UK high
street in the autumn, paving the way for what could turn out to be an extremely
expensive Christmas. After all, the iPhone is bound to feature on every kid’s
email to Santa…

But the device is also likely to have an impact on the corporate world.
Research carried out in the US by RDA Global the day after the iPhone was
launched revealed that 15% of mobile workers want to be equipped with the
gadget. “We expect Apple to capture sales from BlackBerry, Treo and other
high-end phone users,” insists Chris Seals, RDA Global’s vice president of
business development. “Almost half of this group [existing iPod owners] said
that they plan to buy an iPhone.”

This may not turn out to be entirely true. Many IT managers have expressed
concerns over the iPhone’s security, and some have point-blank refused to
support it on the corporate network. So it would probably be unwise to rob staff
of their precious BlackBerries just yet.

But companies would be well advised to keep up to speed with emerging
consumer technology trends such as Apple’s iPhone. The gap between consumer IT
and enterprise IT, at least in the mobile computing sphere, is barely noticeable
anymore. BlackBerries are now ubiquitous and used for both personal and
work-related tasks by the vast majority of users. Instant messaging, which was
once the sole reserve of internet geeks chatting to their cyberfriends, is now
being embraced by an increasing number of companies. Text messages are also
being adopted as a useful corporate communications tool (although a word of
advice here: don’t let your HR department anywhere near it).

Corporates have embraced the blogging world as well. General Motors and
L’Oréal both use the technology to reach out to their customers to gain valuable
feedback and insights. And Jeremy Newman, managing partner of top ten accounting
firm BDO Stoy Hayward, uses his blog to sound off about, well, just about

Of course, the downside to what analysts have termed ‘the consumerisation of
IT’ is that corporates will be faced with a network of technology of
headache-inducing complexity. Knowing what devices each employee has, and what
they are using it for, is already difficult enough without allowing gadgets such
as the iPhone into the enterprise. And with each new device comes a potential
new security threat, so the IT department will have to be on red alert.

But the reality is that the corporate world has a huge amount to gain from
adopting leading-edge consumer technology. People are comfortable using it and
are likely to be more productive if given the opportunity to do so in the

So, prepare yourself for the iPhone-effect – you’d best start queuing now.

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