Apple Sneaks into the Enterprise

By Stephanie Blanchard, Digital Editor & Lori Castle, Editor in Chief — February 19, 2013

The late Steve Jobs, Apple’s iconic CEO, never courted the enterprise. Yet in 2013, Apple can be found in 94% of the Fortune 500, in some form or another, whether it’s iPhones, iPads or iPad minis, but mostly thanks to the iPad. However, that’s all largely due to a combination of consumerization and BYOD.

Jobs most likely wouldn't have minded.

“What I love about the consumer market that I always hated about the enterprise market is that we come up with a product, we try to tell everybody about it, and every person votes for themselves,” Jobs said at the 2011 D8 Conference. “That's how it works. It's really simple. That's why in the enterprise market it's not so simple. The people that use the products don't decide for themselves. And the people that make those decisions sometimes are confused.”

The current CEO, Tim Cook, Apple’s former chief operating officer with extensive experience in supply chain management, is not Jobs. In contrast to his predecessor, Cook doesn’t seek the limelight, rarely making public appearances, although he did sit next to First Lady Michelle Obama during the president’s State of the Union. Jobs was known for his pithy comments, memorable keynote speeches and overall stage presence. Cook’s enthusiasm is more subdued.

Unlike Jobs, who detested investor meetings and preferred avoiding them, Cook embraces the corporate culture. He not only meets with investors, but engages with them, answering questions and offering undivided attention. To that end, he spoke at the Goldman Sachs Technology and Internet Conference on Feb. 12, 2013.

Behind the Scenes
This type of appearance is an indirect conversation with businesses, and aside from a direct comment he made during the iPad mini/iPad 4 launch saying — "We are taking the business market by storm; in the office, in the field — in places you would never dream of seeing a PC, iPad is showing up more and more, and doing more and more things”— it’s possible that Cook is courting the enterprise behind the scenes. Look at these recent developments:

American Airlines chose iPad for its “Electronic Flight Bag,” Home Depot deployed 10,000 iPhones, Barclays deployed 8,500 iPads and BMW has plans to deploy iPad minis to showroom staff.

Additionally, YouSendIt CEO Brad Garlinghouse gave every employee an iPad mini over the holidays, while Jeff Weiner, Linkedin’s CEO, recently gave iPad minis to all of his company’s employees, ostensibly as gifts.

When asked by Mobile Enterprise if Weiner personally purchased the devices, Linkedin’s Krista Canfield, Senior Manager, Corporate Communications, emailed: “We wanted to acknowledge the hard work and accomplishments of all of our employees in 2012.”

But are those iPad minis supported by the IT department? Were they bought in conjunction with Apple’s B2B sales?  “…we surprised our employees with iPad minis as a small gesture of the company’s gratitude for their contributions,” Canfield responded, simply.

Another back door to the enterprise is through the prosumers of tomorrow. During the Goldman Sachs session, Cook called out iPad’s proliferation in education. What better way to get the next gen of Apple products into business — have the next gen of worker use them from an early age.

Retail Scene
From the get-go, Apple always had its eye on the consumer, leaving business sales to its competitors. In late 2010, the company hired several enterprise sales employees from the company now known as BlackBerry. Still, business sales remained close to a non-issue.

Since corporate sales are not specifically mentioned as part of Apple’s earnings statements, it’s hard to tell what, if anything, the company is currently doing to secure businesses. Relying heavily on its retail stores to not just ring up orders, but to provide the “experience” to customers, Apple’s retail store appears to be a core part of its enterprise strategy.

“One thing that's not well understood, I don't think we would have been nearly as successful with iPad if it weren't for our stores,” Cook said at the Goldman Sachs conference. “If you look at the full year last year, there were more iPads sold than HP sold of its entire PC line-up. The projection is that this is going to triple in four years. When you think about that, the actual number is 375 million, that's more PCs than are being sold around the world.”

Cook is less able to nail down market share for the iPad, however. “I have no idea what market share is, we're the only company that really reports the units we sell," he said at Goldman Sachs.

What's Next
Over the last six months, Apple’s stock price declined 24%.  And, just in time for Valentine’s Day, the company lost the naming rights to the iPhone in Brazil, an emerging market. So, there are actually doom and gloomers who declare the company dead and cite Apple fatigue. Yet Apple is sitting on a huge stockpile in cash reserves: $137 billion. ($45 billion is likely to be given back to shareholders.)

During the Goldman Sachs conference, Cook noted that some of that cash will be used for acquisitions, including expanding the company’s retail presence around the world, along with supply chain investments and allocations for research and development.

It remains to be seen how big a bite into enterprise Apple will take, but there is already talk of the next iPhones — one of which is rumored to be a more affordable version and would, therefore, theoretically play well for BYOD.


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