March 7, 2008

Apple Targets Corporate Users with New iPhone Software

Cupertino-based Apple Inc. announced Thursday the availability of new software for its iPhone that will support corporate e-mail. The move marks the company's initiative to court business customers and challenge the market dominance of key rival Research in Motion's Blackberry product. 

The company also said it will make tools available for third-party developers who want to build iPhone applications.   A beta version of the new software became available Thursday, and the full version will be available in June.

In conjunction with the announcement came news that renowned venture capital firm Kleiner Perkins Caulfield Byers will establish a $100 million "iFund" to support start-up companies working on iPhone software applications.

"This takes the iPhone from being not really in the running in the enterprise to being very much in the running and gives RIM a serious challenge," said Van Baker, an analyst with market research firm Gartner, in an interview with Reuters.

The company said its new iPhone capabilities would be compatible with Microsoft's Exchange software for managing business e-mails, contacts and calendars and "pushing" that information to handheld devices.

"Apple answered the majority of objections that most IT professionals had to the iPhone as an enterprise device," Baker said.

"We are doing all of these things with the next release of iPhone software," Phil Schiller, vice president of global marketing for Apple, said at the company's headquarters, according to a Reuters report.

"I think enterprise customers are going to be pretty excited," he added.

Apple hopes its move will help the company achieve its goal of selling 10 million iPhones this year, an aggressive target that some analysts have questioned in light of the current economic environment and declining consumer spending.

The new developer tools are also being positioned as a way to build more interest in the iPhone, which until now has only ran 3rd party programs through a Web browser. The new tool kit will let software makers write applications that can tap more of the iPhone's capabilities.

"Starting today, we are opening up the same native (interfaces) and tools that we use internally to build all our iPhone applications," said Scott Forstall, vice president of iPhone software, in a Reuters report.

Programs will be available exclusively through a new "apps store" on the iPhone and from the company's iTunes software that sells music and videos. Developers will receive up to 70 percent of revenue, with Apple keeping the rest.  

Steve Jobs, Apple's Chief Executive, rejected concerns the company was too controlling of iPhone software distribution.

"As a developer, your dream is to get your app in front of every iPhone user and hopefully they love it and buy it. That's not possible today. Even big developers would have trouble getting in front of every iPhone user," Jobs said.

"Are there going to be limitations? Of course. There are some apps we're not going to distribute. Porn, malicious apps," he explained.

Kleiner Perkins' John Doerr, one of Silicon Valley's most well known venture capitalists and a partner at the firm, said the firm established the $100 million iFund under the premise that the iPhone would prove to be a long-standing platform.

"We believe the mobile Internet is a platform and that the iPhone is the best instance of that," said Matt Murphy, a Kleiner Perkins partner who will manage the iFund.

After Apple's announcement, shares of Research in Motion, whose Blackberry products are ubiquitous in corporations, fell 3.8 percent to $98.72, while shares of Apple fell 2.9 percent to $120.93.


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