Apple's "Stealth" Approach to Enterprise Adoption is Working

The " iPhone is changing the way companies across the globe use mobile devices for work," says Peter Oppenheimer, Apple Chief Financial Officer and Senior Vice President. That perhaps unremarkable comment nevertheless is interesting because Apple never has gone much out of its way to sell to enterprise and other business users, preferring to sell directly to end users, and simply relying on those users to do missionary work inside their organizations.


"In addition to accessing e-mail, calendar and contacts, many of these companies are developing and deploying mission-critical iPhone apps to help improve productivity and give employees secure and immediate access to information anywhere," said Oppenheimer. 


"Some new examples include Royal Dutch Shell, Credit Suisse, Kimberly-Clark, St. Jude Medical, Providian, Teradata, Nike, [indiscernible] and Facebook," Oppenheimer said.


The same pattern can be seen for iPad adoption by businesses of all sizes. 


"Nearly all of the top companies within major Fortune 500 markets including pharma, manufacturing, hospitality, consumer products, financial services, healthcare and retail are actively using iPad to improve workflows, business processes and customer engagements," said Oppenheimer.


"Real estate agents at Coldwell Banker and Sotheby's access sales presentations and use custom iPad apps in the field," he noted. "Retail chains such as Bed Bath & Beyond use iPads to deliver key business metrics on the sales floor."


"Wineries are using iPads in their vineyards to call up weather data and soil profiles, record quality assessments and make decisions on the spot about whether to harvest their grapes," Oppenheimer added. "And in this past quarter, Chinese airline, EVA, has also deployed iPads to pilots and crew for flight manuals, documentation and training."


The Denver Broncos have stopped using paper playbooks and now use iPads instead. 

AT&T Wireless Revenue Exceeds 50% for First Time

AT&T mobile services revenue has been building for some time, and in the first quarter of 2012 broke above the 50 percent level for the first time, reaching 51 percent of total revenue. Landline voice revenue fell to 18 percent of total. 


Looking only at fixed network revenue, 27 percent was contributed by services to business customers as well as data services. Wireless data alone accounts for 42 percent of total revenue. 

Mobile data will be the largest contributor to U.S. telecom service provider growth over the next five years, says Pyramid Research. That not-unexpected assessment is simple recognition of the fact that growth must be driven by services that have obvious demand drivers, fit network and other organizational capabilities are not already fairly saturated and highly competitive. Right now, in the U.S. market, mobile broadband to support smart phones and tablet devices is the only clear service that fits all the parameters.

Voice services are expected to dwindle, on both the fixed and mobile networks. There will be growth in the video entertainment, VoIP and high-speed access segments, but at modest rates. 

The U.S. telecom market generated $367 billion in service revenue in 2010, an increase of 3.1 percent over 2009.

"We expect the market to grow at a 3.1 percent compound annual growth rate over 2011 to 2016, reaching $443 billion in 2016, Pyramid Research forecasts. 

While it was the fourth-largest service segment in 2010 (after mobile voice, fixed voice and pay-TV), Pyramid Research projects mobile broadband will have a 12.7 percent CAGR over the 2011 to 2016 period.

That means that mobile broadband services will overtake mobile voice, fixed voice and entertainment video  to become the single largest revenue stream in the U.S. telecom industry by 2016.

As demand for fixed circuit-switched voice decreases, fixed VoIP will increase, growing at a 12.2 percent CAGR from 2011 to 2016. But VoIP still will be the smallest of all revenue streams over the forecast period. There might continue to be some small dial-up Internet access revenue, but it will be negligible. 

Apple Profits Most from "Consumerization of IT"

Though some will disagree, you can argue that Apple now leads the consumer electronics business, not only the computing business, while Microsoft has become more of an enterprise technology supplier. 


Five years ago, in 2007, Microsoft reported quarterly revenue of $14.398 billion and  profit of $6.589 billion. In 2012, Microsoft’s revenue was $17.4 billion, while profit was $6.374 billion. The company is still growing, but not fast, and is less profitable. 


The bigger story, though, is likely Apple.


Five years ago, in its first quarter of 2007, Apple revenue was $7.1 billion and profit was $1 billion,  the first quarter with a billion dollar profit in company history. In 2012, for the same quarter, Apple had $47 billion in revenue and $13 billion in profit.


The shift into different customer segments is not, in some ways, a surprise. Apple never has chased the enterprise market, preferring to sell directly to end users, and then watch enterprise sales grow as those users demanded the right to use their devices at work. You can say Apple has been the biggest beneficiary of "bring your own device" or "consumerization of IT" trends. 


Workers now report using an average of four consumer devices and multiple third-party applications, such as social networking sites, in the course of their day, according to a study sponsored by Unisys. 


Also, workers in the survey reported that they are using their own smartphones, laptops and mobile phones in the workplace at nearly twice the rate reported by employers.

In fact, 95 percent of respondents reported that they use at least one self-purchased device for work. Another big change is that where enterprise IT staffs used to assume they were responsible for training and supporting users on enterprise technology, these days many users simply will go ahead and train themselves to use tools they prefer. That also is a big change.

That 'consumerization' of technology is quite a big shift. Decades ago, the pattern of technology diffusion was fairly straightforward. The latest new technology was purchased by large enterprises and large government entities. Over time medium-sized businesses and organizations started to buy the same technology. Later, small businesses and organizations adopted the tools. Finally, some consumers 'brought the technology home' and used it as well.

All of that has changed over the last two decades. These days, many enterprise tools actually were brought into the enterprise by consumers who already had adopted the technology for home use.

U.S. Mobile Ad Spend Will Double in 2012

Mobile ad spending worldwide will grow 85 percent in 2012 from $6.3 billion to $11.6 billion, according to Strategy Analytics. 


In the United States market, ad spend for mobile advertising will grow much faster, at about a 128 percent rate, to about $4.2 billion, Strategy Analytics estimates. 


The total U.S. mobile mediamarket is expected to outperform the global growth rate as well, increasing by 22.1 percent to nearly $38 billion by the end of  2012. 

U.S. consumers are expected to spend $6.7 billion on mobile apps in 2012, a 24.6 percent increase over 2011, and accounting for 20 percent of all U.S. consumer mobile spend. 

Tablets Will Win Because Pain of Resisting is Higher than Pain of Adopting

Tablets aren’t the most powerful computing gadgets, but are convenient, "cool," and work because many of the core "computing" requirements people have today are related to content consumption and some light communications, rather than heavy content creation. 


They’re portable, easy to use and suitable for content sharing and working in groups. Screens are large enough to display content, and the disadvantages of computing power if balanced by better battery life. 


Tablets will gain wider user because much of our "computing requirements" now consist of content consumption, not content creation. 


Some of us would also argue that something else is at work. When looking at adoption of any new technology, a good rule of thumb is that the "pain of changing" has to be less than the "pain of not changing." 


But part of the "pain of not changing" has nothing to do with technology, as such. "Pain" can be social. The pain of not buying a tablet occurs when all your friends have one, and you don't. Don't  discount that sort of "pain." It happens with all important consumer technologies. There simply is a point where a person feels they must have something "most other people have," so long as the innovation is useful.

Microsoft Smart Phone Market Share Keeps Falling

Apple is the clear winner in the smart phone business so far, though Samsung has made important strides. And though nobody should count them out, Microsoft, Research in Motion and Nokia are struggling. 


But it is in the area of smart phone profits that Apple is unusual. 


Profitability, more than anything else, now is shaping the global smart phone business, one might argue after considering an estimate by Strategy Analytics of market share in the global handset business.

Globally, Apple and Samsung have, over the last 12 months or so, surged to the top of the charts in terms of smart phone sales volume. In the past, the “smart phone” category has not been significant, as all devices were feature phones or basic phones.

As the market begins to shift to a smart phone buyer pattern, differences in firm strategy and execution have lead to a rapid change in market leadership.

Global smart phone shipments grew 54 percent annually to reach a record 155 million units in the fourth quarter of  2011, according to Alex Spektor, Strategy Analytics associate director. That apparently has proven to be a decisive change.

In the past, Nokia has been the global share leader, but Nokia has not been able to translate that prior success into smart phone success, where Apple has changed the game and Samsung apparently has been able to keep pace.

Apple overtook Samsung to become the world’s largest smartphone vendor by volume with 24 percent market share. Apple’s global smartphone shipments surged 128 percent annually to 37.0 million units, as distribution of the iPhone family expanded across numerous countries, dozens of operators and multiple price points.”

Apple took the top spot for share on a quarterly basis, but Samsung became the market leader in annual terms for the first time with 20 percent global share during 2011. With global smartphone shipments nearing half a billion units in 2011, Samsung is now well positioned alongside Apple in a two-horse race at the forefront of one of the world’s largest and most valuable consumer electronics markets, Strategy Analytics says.

In contrast, Nokia’s smart phone market share was cut in half from 2011 to 2011, dropping from 33 percent in 2010 to 16 percent in 2011.

That is one reason there has been so much focus on the Nokia partnership with Microsoft, as many would argue the Windows Mobile operating system represents the best shot Nokia will have to avoid collapse.

The other observation of note would be that profitability might now be emerging as the key differentiator, even though design and consumer demand clearly are driving the market overall.

Samsung’s most-recent quarterly earnings also set records. Samsung Electronics Co declared $4.7 billion in quarterly operating profit. jumping 76 percent year over year.

Between them, Apple and Samsung earned fully 81 percent of all profits in the mobile handset business.

Work Keeps You From Being "Creative," Adobe Study Suggests

Our biggest barrier to creativity might be at work, a new study by Adobe suggests. In the survey, 75 percent of respondents said they have been experiencing more and more pressure from superiors to be productive rather than creative in the workplace, even though their jobs require at least some measure of creativity, the study suggests.