Nick Jones

Yesterday morning here at APAC Symposium my colleague Robin Simpson and I debated whether Apple was (or could ever become) an enterprise vendor. This was a light hearted session where I took the position that Apple products are suitable only for price insensitive fashion victims and Robin claimed that Apple was a serious enterprise vendor.

Whether or not you consider Apple as an enterprise vendor depends on your definition of “enterprise”, but my personal view is that you have to have a pretty relaxed definition before Apple fits it. Apple does the bare minimum for enterprises, they aren’t deeply committed to security, management, roadmaps, low TCO and so on. And they don’t open up the architecture of iPhone enough for 3rd parties to fill the holes. And before I’m lynched I must stress that’s an observation not a criticism. There’s no reason for Apple to do much for enterprises because 90% of iPhones are owned by consumers and only about 1% of enterprise PCs are Macs. Why should Apple invest a lot in something which is such a small part of its business? Apple is basically a proprietary vendor that wants to lock you in to their private APIs, technology, services and platforms. That’s a great business decision for Apple, you only have to look at their stunning Q4 results to see just how profitable it is. But living in that closed world may not necessarily be a sensible business decision for an enterprise.

One of the points I made in the debate is that a good way to understand what drives a vendor is to listen to what they say. So take a look at Apple’s web site where they list the “business” applications for iPhone. What’s on the list? Things like Fedex and UPS shipment apps, a business card reader, job search applications and so on. Basically toys. No mention of SAP, Oracle, business process support or anything that’s important to a real enterprise. And while we’re on the topic of what Apple says, Steve Jobs is reputed to have commented “Why join the Navy if you can be a pirate”. Piracy may be more fun, but would you rather give your treasured corporate data to the Navy or a pirate?

To be serious for a moment, Gartner’s official position on iPhone is that it’s is suitable for enterprises for what we term “appliance” mode applications but not for what we term “platform” mode applications. I.e. if what you want is a device for mobile email and web browsing iPhone is excellent. However we wouldn’t recommend enterprises to use it as a native application delivery platform. If you want more details of how we recommend enterprises use both iPhone and Macs there’s a lot of detailed advice on the Gartner web site (sorry, but we charge for it).

We conducted a quick audience poll both before and after the debate and in the end the audience split about 50:50. I.e. half of the people there believed in Apple as an enterprise vendor and half didn’t. I feel I did well because at the start the crowd were about 55:45 against me. But I guess the real message is that the opinions on both sides of this debate are pretty entrenched.

Is someone about to buy Palm? I don’t have any inside information on the topic, but I certainly do have some opinions. One of the rumours flying around is that Nokia might be a suitor. Would this be a good thing? I don’t think so; maybe a year ago it would have been sensible, but now Nokia is part way down a road to fix its smartphone problems by enhancing Symbian and introducing new high end devices based on Maemo. If Nokia were to buy Palm now I’d guess it could take a year or so to integrate that sort of acquisition, which would further delay revitalising its smartphone platform and portfolio. Additional delay is absolutely the last thing Nokia needs at this time with Apple and Android biting at its heels. So if they did buy Palm I’d likely be lukewarm about the whole idea.

Who else might be a sensible suitor? Microsoft could afford Palm and desperately needs to transform its platform, something based on WebOS might well fix Microsoft’s problems faster than developing a risky new Windows Mobile 7 next year. But Microsoft doesn’t have a great track record with mobile acquisitions, for example Danger doesn’t seem to have achieved its full potential. Also a platform which is strongly oriented towards open web standards like HTML5 might not be a good cultural fit with Microsoft.

RIM has also been suggested as a potential buyer and in my personal view this would make a lot of sense. RIM’s user experience is looking a bit dated, I think RIM needs a more fashionable consumer-oriented platform, RIM isn’t worried by open standards, and they’d benefit from an influx of enthusiastic developers.

There are lots of outside possibilities as well, such as Samsung, although I suspect they don’t want to absorb another mobile OS just after they announced Bada. But however we speculate about potential purchasers one things stands out. Someone should buy Palm, because I don’t believe they’ll be able to reclaim their former glory alone.

I’m now in Sydney and almost unbelievably staying in a hotel that doesn’t have internet access in all its rooms. Worse still, the rooms which do have internet have wired internet; yes, honestly, wires. For younger readers who may have grown up with WiFi and embedded 3G a word of explanation may be in order. Wires are long snaky things you plug into the back of a PC; bits are transmitted down them; imagine something like power cables but for data. This is like stepping a decade back in time. Will someone, somewhere, please explain the 21st century to the Four Points Sheraton in Darling Harbour?

(PS, I just discovered something even odder, they have WiFi in the restaurant but not the guest rooms. Some strange Australian definition of surf & turf I guess).

And now I’d like a bit of help from those people who don’t use Apple. I know you’re out there, it’s OK to speak up even if you get spammed by a million fanatical Apple evangelists, just remember you’re the silent majority. On Wednesday at Symposium I have a public debate with Robin Simpson (one of my Australian colleagues) about Apple. I have been cast as the bad guy here, I have to support the proposition that Apple is not an enterprise vendor, doesn’t understand enterprise needs, and doesn’t care about enterprises. Which is probably true, especially when talking about iPhone (excuse me a moment while I duck the storm of hate mail from Apple addicts). After all, this is the company who designed earlier models of iPhone to report to Exchange that they had encryption even when they didn’t. So if you have any great stories I can use to illustrate Apple’s deficiencies as an enterprise vendor, let me know. I have some interesting examples – but I’m going to keep quite about them until Wednesday, because Robin is probably reading this.

Finally, last week Dell finally officially announced they were going into the smartphone business. This is an odd decision because superficially the business case is dubious; how can a company with limited mobile device experience hope to make an impression on a handset market which is owned by a few megavendors each of whom ships tens to hundreds of millions of units a year. The conspiracy theorists however have an explanation. I’ve seen some suggest that this isn’t about Dell but about Intel. Intel needs line up some vendors to use the new Medfield and Moorestown chips in smartphones. They don’t have much leverage with big mobile vendors like Nokia and Samsung, but they do have a lot of leverage with PC vendors like Dell. So, the theory goes, maybe Dell gets a deal on PC chips in return for developing some Intel powered smartphones. As I said, at the moment it’s only a conspiracy theory…..

Our Q3 mobile handset market numbers have been released and there are few surprises. Smartphone sales are growing, over 12% up on the same period last year despite the recession, with Apple overtaking RIM in Western Europe. That’s impressive, but it will be more of a shock to RIM when Apple overtake them in the US – which will happen at some point. Nokia lost a little market share but are still the biggest manufacturer of handsets by far holding on to about 36% which isn’t too bad considering their high end smartphone portfolio is weak. Both Motorola and SonyEricsson had a horrible quarter, under 5% share in each case, Motorola’s Android handsets are still too new to have made any impact on their market share.

Looking at platforms, the losers were Symbian and Windows Mobile, although the former can better afford to lose a few points of share as it’s still a long way ahead of the pack. The winners were RIM, iPhone and Android, although the latter is starting from such a small market share that it still makes up only 3.5% of smartphones. So no big surprises, things still look on track for our prediction that Android will become the number 2 platform in 3 years. Although Symbian is strong, it’s mostly because of Nokia; the move to open source hasn’t yet attracted lots of new handset manufacturers. Symbian (i.e. Nokia) can’t afford to stand still, the foundation should nuke the current feeble Symbian user interface as soon as possible and re-invent it, but I don’t see that happening until 2010.

The smartphone platform wars are a numbers game. Ultimately it’s all about creating positive feedback loops. Developers will go where the most users are, users will want platforms which have the best developers and the largest range of applications and content. Of course not all users are alike, Apple has attracted more than its share of compulsive downloaders, so their developers can make a living from a smaller number of more active users. But in the long term it won’t be the early adopter app-addicts who define the market, it will be the mainstream subscribers. They may not suffer from the same level of download addiction, but there sure are a lot of them.

If you need more information about the handset market in Q3 and you’re a client you should talk to Carolina Milanesi or Roberta Cozza. I’ll get on a plane for Sydney tomorrow evening, so will be offline for a day, and jet lagged for a few days more. See you next week.

In retail matters I am a typical disorganised male. I have a low tolerance for shopping, I get despondent if I can’t find what I want in the store in five minutes, and I usually start my Christmas shopping two days before Christmas. So I really resent the fact that although we’re not yet half way through November the physical and virtual retailers are already overrun by snowflakes and pseudo-festive marketing. In a few days I’m off to Sydney for APAC Symposium where the enforced festivity has an extra surreal dimension; it’s weird to be wearing sunblock and sunglasses while looking at a shop window filled with reindeer and artificial snow.

Unlike me, Google has started its Christmas buying early, having splashed out $750M on Admob this week. Google also just announced an upgrade to Latitude that supports location history tracking and location alerts (e.g. to notify you when friends are in the vicinity). These events are related. They’re moves in a massive emerging war to own mobile contextual information and applications which will include location-specific advertising and many other location-related business models. Apple are behind in this location game, but I expect MobileMe will get more sophisticated. Expect a future mega-vendor battleground between Google, Nokia, Apple, maybe Microsoft and a few others.

I expect a lot of very interesting location-aware business models will emerge. Back when my daughter was young there were several (failed) attempts to build a business around tracking children. Part of the problem was that most kids don’t want to be tracked, but I always felt that these businesses failed partly because they didn’t take a sophisticated enough view of the opportunity. It’s not about tracking kids, it’s about selling location. The real business opportunity is to get kids and their parents bidding against each other for access to each other’s location. When kids are young their parents can outbid them, but as they get older the kids can afford to hide from their mum or dad and have reasons to do so. Eventually, as the kids grow up and go to college the parents will pay to hide their location from their kids because the only reason for a 19 year old to look for a parent is to borrow money.

However, in my attempts to avoid artificial snow what I really want this week is a mapping application that can show me nearby shops that have festivity-free zones. I’d pay for that.

Edwin Land is reputed to have said “marketing is what you do when your product is no good”, and while I might not go that far, I certainly feel that marketing is something you do when your product is undifferentiated. This is an observation, not malice; I’m hardly guilt-free because I used to work for a marketing organisation once. Hey, we all make mistakes.

This musing on marketing has been triggered by some of the latest efforts of the mobile industry. I have a US T-Mobile Android handset in front of me, and it has a T-Mobile Logo, a Motorola logo, but no Android logo. The same is true for Verizon’s new “Droid” handset, it’s obviously a Verizon handset, and it’s made by Motorola, but where does it say “Android”? It doesn’t. Android and Google are mentioned in the small print on the Verizon web site, but you have to get out a magnifying glass to find them.

This looks like a desperate effort at misdirection by operators who’re trying to prevent their customer from discovering an important secret – all the cool stuff comes from Google and Android, not from the network. Most subscribers think voice and data arrives on a mobile by magic. They don’t know how wireless works and care even less. Most don’t care much about operators either, with number portability it’s a lot easier to change your mobile operator than your email or IM address. From a consumer perspective the big issue is that these are ANDROID handsets, not Motorola / Verizon / T-Mobile handsets. Ultimately Android will succeed or fail because of the quality of its app store and ecosystem. The nightmare scenario from the operator’s perspective is that the subscribers will discover that they can get the same cool Android apps by buying their next phone from another network. All this mobile marketing is about deferring the evil day when the customers discover you’re just a bit pipe.

Dubious mobile marketing isn’t restricted to the US; here in the UK Vodafone have a commercial based on social networking of redheads. My daughter is a redhead, and her comment was “just makes me feel really patronised, won’t be buying a phone from them any time soon”.

To be fair, I can see why mobile marketing execs are struggling. They’re selling the same handsets as everyone else, using the same app stores as everyone else, all the content innovation is happening on the internet and in some countries it’s impossible to differentiate the network because they already share it with their biggest competitors.

European Symposium finished yesterday and I have a few days free before heading out to Sydney for APAC Symposium. So this seems a good moment to reflect on  some of the mobile themes from Cannes.

I noticed a real difference in sentiment between Cannes and Orlando. In the USA there was a lot of buzz and activity around mobile. People had projects under way and a lot of discussion was about implementation as well as strategy. In Cannes the Europeans were less advanced than the Americans, more discussions were about strategy than implementation. Partly this reflects a fundamental difference in attitude between Europeans and Americans. Europeans tend towards interminable analysis before action, which can be frustrating if you’re a vendor trying to sell things to them. This isn’t altogether surprising, Europe includes nations such as France whose primary export for the past few hundred years has been philosophers, so we can hardly blame them for intellectualising. Americans lean towards action before analysis, sometimes followed by action in a different direction if the first action failed to deliver as expected. In the long term things probably even out, the Europeans make less mistakes, but the Americans get places faster. The Europeans in Cannes also seemed less positive and optimistic than the Americans in Orlando, but much of that could be explained by national attitudes; Europe after all includes traditionally miserable and undemonstrative nations such as we Brits. Overall, I think it could be 6 months or so before the Europeans catch up with American mobile optimism.

While I’m on the subject of undemonstrative Brits, Reuters reports a survey from T-Mobile showing the rise of the British metrotextual. Apparently 22 percent of British men are signing SMSs to male friends with a kiss (x). Some of my colleagues think this is positive indication that the Brits are getting in touch with their feminine side and maybe soon grown British men will actually embrace male friends in public as the French and Italians do. I think it’s a sign of serious degeneration of British moral fibre.

Symposium this year has moved up-market and we have a lot more CIOs attending than in the past. As I chat with them I’m seeing a number of different attitudes towards mobility and consumerisation. So here are a few (very slightly exaggerated) samples of CIO opinions from the US and Europe.

The only safe place for users is jail. This is the attitude of unreformed hard-line CIOs who want to be in charge. They love platforms like Blackberry because they can lock users down and control everything they do. They’re particularly keen on stopping those pesky users from downloading applications from dubious app stores.

Death to iPhone!  The most frequent cause of CIO mobile pain is iPhone; because the fashion-obsessed early adopters demanding it be supported are often on the board of directors and can’t be stopped by conventional stalling tactics like cost or security. These CIOs resent all the aggravation iPhone has caused and wish it had never been invented. They’re trembling at the thought that Apple might open up a second front by releasing a tablet.

It’s already too late; anarchy reigns. Some CIOs have lost control and can’t squeeze the mobile genie back into the bottle  Users are playing with unsanctioned devices in creative and probably dangerous ways. These CIOs – often through no fault of their own – have no effective sanctions against out-of-control users and about the best they can hope for is to avoid blame when something blows up.

I’ve got better things to do than manage mobile devices.  Some of the more forward-looking CIOs believe that providing, supporting and managing mobiles and laptops is a thankless low-value activity. Most of their users already have their own mobiles or netbooks which are more fashionable and functional than the approved corporate device. So they’re looking at approaches like “bring your own” IT funded by stipends or expenses.

Caring but concerned. Contrary to popular belief CIOs aren’t all power crazed dictators who think the main role of users is to disrupt the smooth running of IT services. Many believe it’s reasonable for employees to have a greater choice of devices, and that a lot of interesting innovation will emerge from consumerisation. But they are also responsible enough to worry about the security risks implied by a more laissez-faire attitude and are looking for ways to manage them.

If you were a CIO what sort of CIO would you be?

One of the themes emerging from attendees here in Cannes is the growing problem of employee-owned devices. An informal poll of the audience at yesterday’s mobile scenario presentation showed around 50 percent who expected they’d have to support more employee-owned mobiles accessing corporate systems in the future. User demand for consumer devices like iPhone is a problem, but at least if the enterprise owns the device it can maintain some delusions of control. (Even if its an iPhone which is intrinsically pretty unmanageable because Apple don’t really care about corporate management; and they haven’t yet opened up the platform enough to permit 3rd parties to fill the gaps). However, once the device is owned by an employee the challenges double. You can’t install management software on devices you don’t own, so any control has to be via policies or software in the cloud. Technologically there are some approaches such as Network Access Control (NAC) which work pretty well for PCs, but they struggle with non-Intel devices like smartphones and some netbooks.

However, employee-owned devices aren’t only a problem, they’re an opportunity too. Smartphones will become the default device in Europe; by 2013 we expect around 80 percent of handsets shipped here to be smartphones. So if someone already has a smartphone, why should the enterprise provide another one? Not only can you not prevent employees using their own devices, you may even want to encourage it as a cost-saving opportunity. So better start looking at technologies such as NAC today.

I’m back in Cannes for Euro Symposium, and in a few ways it’s just like last year. It’s pouring with rain again, and the hotel Martinez still can’t make a decent cup of tea for my wife. However, some things are very different. This year Symposium is operating a  much higher level with far more CxOs than ever before; and looking at my appointments for today I can already see a good selection of topics related to mobile projects which are already under way. So perhaps some of last week’s US optimism will be apparent here too. If you’re attending Cannes Symposium and want to meet up with me, today and Tuesday are pretty much booked up, but there are still some slots on Wednesday. I’ll report in detail on how the Europeans are feeling about mobility in a day or so when I’ve given some presentations and talked with more people.