Apple reports iPhone progress in the enterprise, but long road lies ahead

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Aside from the 5.2 million Apple iPhone units that were sold in the third fiscal quarter, Apple had another interesting announcement: The iPhone is making inroads within the enterprise. The company reported that about about 20 percent of Fortune 100 companies placed orders of 10,000 units or more, while some governmental agencies ordered up to 25,000 units. The security and encryption features of iPhone OS 3.0 made an impact, the company said. (See more on Apple's results.)

While Apple has been making progress in catering to the enterprise, security has continued to be a concern. The 3.0 version, however adds an on-device encryption for data and a remote wipe feature for Exchange 2007 users. If users subscribe to Apple's MobileMe service, non-Exchange users can access remote wipe services too.

According to Rich Mogull at TidBits, the new Apple 3G S inherently offers better security too because the hardware includes an encryption chip that uses the industry-standard AES-256 protocol so that information on the device can be wiped nearly instantly by erasing the encryption key stored on the device. Mogull is right in saying that considering how much information we store directly on our devices, such a capability is a very important feature.

Apple has included some new enterprise features in 3.0 as well. It updated its iPhone Configuration Utility and published an 83-page enterprise deployment guide for the iPhone OS, which details how to configure, activate and deploy phones within the enterprise as well as, among other things, how to distribute apps that are developed in house. Other features include improved support for VPNs and additional management capabilities.

Moreover, enterprise security experts appear to be keen on delivering security products for the iPhone. RSA released this week its RSA SecurID Token for iPhone product that is available in the iPhone App Store. The solution delivers RSA's one-time password software token to the iPhone and two-factor authentication.

But do these enhancements want to make the enterprise want to rush out and adopt iPhones? If anything, they put them closer to being on par with enterprise stalwart Research In Motion. Apple still has a long way to go before it can offer the kind of enterprise control that RIM's Blackberry Enterprise Server does, especially around device management. At the same time, the enterprise is grappling with employees who are demanding iPhones. It is going to be a gradual change.

Apple COO Tim Cook said during Apple's conference call yesterday that, "the iPhone is particularly doing well with small businesses and larger organizations that allow (employees) to purchase phones for individual use, both in corporate and government settings." So it doesn't appear Apple is making a ton of headway in enterprises that have a tighter control on devices.  

Interestingly, I wrote a column in FierceWireless this week about my choice to opt for an iPod touch over the iPhone, simply because I didn't want to pay for a monthly plan, and I could still access apps via Wi-Fi. One reader pointed out that a fair number of people have a Blackberry and an iPod touch in the enterprise because Blackberry is the only device their employee pays for or supports. Everyone wins, he said, especially Apple because the company gets its hardware into the hands of Blackberry users, and it doesn't have to wait for companies to approve the device. In essence, the iPod touch is serving as the entry point for the iPhone in the enterprise. By the way, Apple reported that unit sales of the iPod touch grew 130 percent in the quarter compared with last year. - Lynnette

Editor's Note: I want to welcome Philippe Winthrop, director of business mobility solutions with Strategy Analytics, as a regular columnist for FierceMobileIT. Check out today's viewpoint, co-authored with Digital Trust's David Goldschlag. They make a compelling argument as to why the enterprise needs its own app store.