Wireless broadband to drive iPhone sales

Apple Inc.’s announcement that it will release its 3G iPhone is likely a pre-emptive strike in anticipation of when Google’s Android hits the mobile market, said one analyst.

Apple is going head-to-head with mobile handset vendors Research In Motion and Nokia, who are each making moves in light of their concern over Google’s arrival in the market, said Jon Arnold, principal of Toronto-based consulting firm J Arnold & Associates.

“The more people get embedded with these kinds of phones and habits get developed and bonding happens with these vendors, people are less likely to move to a Web-based solution which is what the Google model is,” said Arnold.

Rogers Wireless has said it will offer the iPhone 3G on its network July 11.

A device like the 3G phone that offers a lot of memory, is affordable and supports third-party applications, he said, is an advantage to Apple. RIM recently announced the launch of its Bold device.

The fact that Apple is offering mobile developers a software developer kit and APIs upon which to build third-party applications is intended to drive adoption through these applications, he said. “To me, it happens to be a phone but that’s not really why you buy it, you’re really buying it to get broadband-enabled applications,” said Arnold, adding that a development platform is a great way to distinguish oneself as a handheld provider.

Arnold thinks Canadians will be interested in developing on the platform, and in particular, applications of interest to the enterprise will be those that enable collaboration and sharing given today’s mobile worker.

Developers are generally attracted to products for which they can create applications and that have presence in significant numbers, said Michael Rozender, principal with Oakville, Ont.-based Rozender Consultants International. Adoption of the previous-generation iPhone stands at more than 6 million, with an estimated 10 million by end of 2008 -- statistics that Rozender said makes “an attractive market for any developer to go after.”

However, Rozender noted that he’s yet to see a developer kit for the iPhone that’s in its final stage of rollout. And although the SDK has been “aggressively downloaded” by the development community, he said the third-party applications that currently exist may need some refinements as well as customization for the Canadian market.

Rogers has probably already eyed several third-party beta applications by developers and is considering bringing them to Canada, said Rozender. Rogers has thus far been silent on the device’s price point.

But despite having a distinguishing developer platform, Arnold thinks Apple will have a tough time displacing RIM among established enterprise customers because of the strong network that RIM is known for. “I don’t think anything that Apple does in terms of partnering with Rogers is going to be viewed in the market as comparable in terms of security and efficiency of the RIM network,” he said.

Instead, Arnold thinks the 3G iPhone will get its share of converts among smaller organizations where the lower price point is attractive, and for business applications where the network is less critical.

Amit Kaminer, a research analyst with Montréal-based Seaboard Group, expects the penetration of the 3G iPhone to be a “little bit slower” in the enterprise than the consumer market because of the inability to really test the device. Users of RIM’s BlackBerry have had ample opportunity to evaluate the device for stability and reliability, he said, and “people we will have to prove that [the 3G iPhone] can match the BlackBerry standards.”

As for the third-party applications that are built on the iPhone platform, Kaminer said businesses will adopt those applications as long as they comply with the security requirements of the IT environment. “If a business sees the environment is safe and it can drive more revenue or reduce costs, there’s a good business case for them to support those kinds of applications,” he said.