The introduction of the more functional iPhone 3G has raised the intriguing question of whether Apple now has a mobile device that will get them into the enterprise market in a big way. While the second coming of the iPhone has addressed some of the more glaring deficiencies of the original, it’s still fundamentally a consumer Web surfing gadget. However, the iPhone developer program launched last March will probably result in some important new capabilities including a voice over WLAN client, a fixed-mobile convergence function, and something in the way of mobile unified communications.

Along with a far more attractive $200 to $300 price point, the iPhone 2 does include a number of enterprise-focused features:

• 3G High Speed Packet Access (HSPA): One of the major complaints about the original iPhone was Apple’s incomprehensible decision to include a cellular data capability that was out of date the day the product was introduced. The 2.5G EDGE capability used on the original delivers downstream data rates in the 100 K to 125 Kbps range. The new version includes AT&T’s High Speed Uplink Packet Access (HSUPA), which the carrier claims will support downstream rates from 700 K to 1.7 Mbps and upstream rates from 500 K to 1.4 Mbps. That service is currently available in 275 US markets with 75 to be added this year.

• 802.11g Support: The new iPhone only supports the 2.4 GHz 802.11b and g radio links, not 802.11a. That is a major requirement in enterprises today given the number of available channels in the more capacious 5 GHz U-NII band. While there is no 802.11n support, no one who has been paying any attention to the power requirements is predicting n-support on small form factor devices anytime soon. Think about it: we can barely get n-capable access points to run on the 12.95W we get over PoE!

• Wi-Fi Protected Access 2 and 802.1x-based Authentication: These two options are mandatory for enterprise grade Wi-Fi security today.

• Cisco IPsec VPN Client: The new iPhone can also support a Cisco IPsec client for remote access to enterprise VPNs.

• Microsoft Support: The new iPhone can use ActiveSync with Microsoft Exchange email servers to deliver corporate push email, and it will also display Microsoft Office files including Word, Excel, and PowerPoint.

• GPS Capable: The new model also features an integrated GPS capability that can be linked to location applications.

Probably the biggest news is that Apple has dropped the price to $200 and $300 for the 8 G and 16 Gbyte models, a far cry from the $600 price the first iPhones commanded. AT&T, the sole “authorized” carrier for the iPhone in the US, who will be subsidizing the device, and consumer sales should skyrocket.

Enterprise View

For the enterprise, there are still lots of holes in Apple’s plan, and the result will be that the iPhone will remain a niche product for enterprise users. The fundamental problem is that there is no mobile device that is best at every task, and the iPhone is weak at the most important enterprise application, email. While the physical design is eye-popping and the Web capability is an order of magnitude ahead of everyone else (though that gap may be closing), enterprise users need email, and email needs buttons. If you have tried thumb typing on an iPhone or iTouch, you’ll find that it is almost impossible to type three words correctly in a row; women with long fingernails have an even rougher time. I think that if corporate IT departments begin offering iPhones, the return rate will be massive. Glitz is nice, but these people have a job to do, and that job isn’t to surf the Web or watch YouTube videos. The Blackberry and similar hard-key QWERTY devices will continue to dominate the enterprise market.

The security profile for the iPhone is also a big unknown. Apple’s “holier-than-thou” posture on security has made them a prime target for the hacker community. It was big news back in April when a pair of software engineers won a free MacBook and a $10,000 prize for finding and exploiting a security hole in the Safari Web browser at the CanSecWest computer security conference in Vancouver, B.C. While incorporating WPA2 and 802.1x for Wi-Fi security is a plus, the developer program means that more of the innards of the iPhone will become public knowledge. Apple notes that iPhone applications will have to be digitally signed by them before they will run on the device, but that still falls far short of the multi-layered, bullet-proof security the enterprise gets with a Blackberry.

There are also a number of issues with regard mobile device management capabilities. Apple plans to distribute software through the iTunes store, though smaller applications (10 Mbytes or less) can be downloaded over the air. Both RIM’s management systems and the new Microsoft System Center Mobile Device Manager for Windows Mobile 6.1 are miles ahead. The most glaring management deficiency is the fact that you can’t change the battery. Now the idea of a consumer doing without their wireless gadget for several days might make sense, but enterprise users who live on their mobile devices would go nuts!

Conclusion

With its lower price (partially offset by higher data service charges), the iPhone will be a major hit with consumers. In the enterprise (if the IT department can’t ban the iPhone outright), the market segment will be those who favor fashion over function- wait, I might be in that category! The iPhone 3G has added some enterprise “check-offs”, but it’s a consumer Web surfing device at heart. The applications they are describing are things like Ebay tracking and a buddy locator from Loopt.

I do anticipate that the developer network will produce a voice over Wi-Fi capability, and probably a fixed-mobile convergence solution as well. However, I expect those will be tied to consumer FMC services like Google’s Grand Central rather than to the enterprise FMC options. The enterprise FMC companies will focus on Blackberry support, which they currently lack.

As they already offer features like visual voicemail, we will probably see some manifestation of mobile unified communications, but presence federation with Microsoft OCS or IBM Sametime is a long shot. However, the Apple community is great at generating new ideas, so the UC population will be well advised to keep an eye on the iPhone to see what they can learn.