AT&T to target iPhone to enterprise

AT&T plans to market the iPhone to business users in addition to consumers but analysts aren't recommending that enterprises supply workers with the phones.

Cingular, which was acquired by AT&T, recently decided that the iPhone will appeal to business users and the operator is now working hard to ensure that its backend enterprise billing and support systems will accommodate the device when it ships, said a source familiar with the company's plans, who spoke on condition of anonymity.

An AT&T spokesman said he couldn't comment on the iPhone beyond when it will become available and its price. The phone is expected to become available in June. It will cost $499 or $599 depending on the memory size. Initially, AT&T will be the exclusive provider of the iPhone, although other service providers are expected to eventually start selling it as well.

The idea of marketing the iPhone as an enterprise product baffles some analysts.

If AT&T announces that it will be marketing the phone to enterprise customers, "we'd be against it," said Ken Dulaney, an analyst with Gartner, who said he hasn't heard of such a plan from the operator. "We'd immediately tell our customers that'd be a very serious mistake."

No matter what kind of reputation a vendor has, if it's making its first phone, Dulaney would be unlikely to recommend it. "Building a phone is one of the most difficult things to do," he said.

Also, the iPhone is expected to have a number of shortcomings for business users, he said. For example, it doesn't have a removable battery. "You'd be crazy to buy without that," Dulaney said. The phone has multiple processors, which consumes more battery life than single processors, he said.

It also comes with a touch screen and no buttons, making it difficult for users to dial while driving, he noted.

He suspects that enterprises will likely decide against the iPhone for similar reasons that many decide not to standardize on Mac computers. Even if the iPhone is attractive, like the Mac, they'll choose BlackBerry or Windows Mobile devices because those have more software application options, he said.

That's one reason that Avi Greengart, principal analyst for mobile devices at Current Analysis, also thinks the iPhone won't be a good option for enterprise customers. Apple has said that the iPhone will run on an OS X-based operating system and told Greengart that enterprises won't be able to write applications for the phone, he said. "Companies like to extend corporate apps to the mobile space and in order to do that you need an open OS," he said. Mobile operating system developers like Windows, Symbian and BlackBerry enable third parties to write applications based on their software.

Since the iPhone isn't available yet, there's a chance that it could launch with applications that might appeal to business users, such as support for corporate e-mail, but Greengart said he'd be surprised if it did.

Without such corporate applications, enterprises would be buying their employees a device with plenty of storage for their digital music collections. "Could a company deploy this? They could but they'd be paying for storage and for something intended for use as a consumer device," Greengart said.

The IDG News Service is a Network World affiliate.