Video: Apple previews iPhone software update

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msnbc.com
updated 3/7/2008 8:49:37 AM ET 2008-03-07T13:49:37
Analysis

For right now, the “i” in iPhone stands for “incremental” when it comes to change.

That’s because it will be three months before third-party programs are available to those who own the coolest phone in America.

Perhaps Thursday’s news from Apple was a letdown to iPhone aficionados who hoped to be running some of their favorite programs and games before late June.

Demonstrations of “Spore” and “Space Monkey” on the iPhone whetted many a gamer’s appetite. But among other games coming in late June is Apple’s stepped-up competition on the corporate smartphone playing field.

It enters with a definite disadvantage: Reseach In Motion, which makes the BlackBerry, dominates the arena. Still, that has never stopped Apple.

Part of the free iPhone 2.0 software upgrade will include Microsoft’s Exchange Active Sync software, which can synchronize with a PC for e-mail, calendar and contact info. (Msnbc.com is a joint venture of Microsoft and NBC Universal.)

Also in June will come software for a Virtual Private Network connection, allowing for encrypted access to workplace networks.

Some considered the announcement a little underwhelming, considering the fanfare the phone has received by consumers since last June, when it went on the market.

“If you stay up late and watch an infomercial, and they’re touting this new device that’s actually a pressure cooker, and they say how wonderful it prepares vegetables and meats, and it’s the same technology you’ve had around for a long time, but it’s in a new package — that’s kind of how I look at the iPhone,” said Bill Hughes, principal analyst for In-Stat, which does market research and analysis of advanced communications services.

“I really haven’t considered it a smartphone, and I don’t know that I still do,” he said. “A smartphone is a device that has an operating system that allows you to write native applications” for the phone.

“The other smartphone environments give (third-party software) developers much more capabilities” than those demonstrated by Apple on Thursday, he said, referring to RIM’s BlackBerry, Windows Mobile, Symbian and “even the not-too-distant future-Linux” platform.

‘Shakeout of the smartphone industry’
A recent survey by ChangeWave Research about corporate smartphone spending shows that Apple clearly has a place in IT — both capitalized and lower-case.

“What you’re witnessing is the shakeout of the smartphone industry,” said Paul Carton, director of research for Maryland-based ChangeWave Research.

“You’re seeing all those other companies — Motorola, Palm, Samsung — (losing) business in the corporate market, and you’re watching RIM suck up all of that vast market share.”

In a February survey of more than 500 companies’ smartphone spending in the second quarter of this year, ChangeWave found that Research In Motion’s BlackBerries will dominate, with about 77 percent.

Next in line: the iPhone, with about 11 percent, followed by Palm’s Treo (8 percent) and Motorola, including the Q (7 percent).

The answers contrast with another question: “Who is the manufacturer of the current smartphones your company provides?”

RIM has 73 percent; Palm, 18 percent; Motorola, 9 percent; Nokia, 7 percent; and Apple, 5 percent.

“Smartphones are the one area of the cell phone market that is moving,” Carton said. “They present opportunities, and Apple is very well-positioned to capitalize on these market changes.

“It’s a big enough pie that RIM can be the 800-pound gorilla, but Apple also has an opening to really increase its market share and gain a real foothold.”

Companies move to mobile
Carton sees the iPhone’s future appeal in businesses with 100 or fewer employees.


While the smartphone arena is a tough one, “it’s growing much faster than the overall (cell phone) market,” said Hughes of In-Stat.

“We project in 2010, the total wireless expenses for companies will be larger for than for wired lines. So, enterprise is clearly a great opportunity.”

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