While 3G may be the feature that defines the name of the second-generation iPhone, the new features that will have the biggest impact on the smartphone’s adoption rate are these five that turn it a business-class device.


Almost from the moment the original iPhone was launched, the anticipation began for when the second generation of the product would be released to deal with the phone’s most glaring shortcomings — the lack of 3G connectivity and the missing features for corporate workers.

Beyond the new 3G capability that has been added to the second generation of the iPhone, here is a list of the five upgrades that Apple has made to iPhone 2.0 in order to make it more usable for business workers and more acceptable to IT departments.

1. Exchange support

When most business users think of a smartphone they think of a device they can use to check their office e-mail. That typically means connecting to Microsoft Exchange, since Exchange has over 60% market share in corporate e-mail. Thus, for the iPhone to become a mass market device for business users it absolutely has to have support for push e-mail from Exchange.

That support was glaringly absent from iPhone 1.0, but it is one of the flagship features of the new iPhone 3G. Fortunately, Apple has also promised a software update that will allow the original iPhone to benefit from the same software innovations that are being launched with the iPhone 3G, including the Exchange ActiveSync functionality.

2.  Business-level security

In order to meet the security needs that IT departments demand for smartphones, Apple beefed up iPhone security with support for a variety of new features including remote wipe, inactivity time-out, password enforcement, strong password policies, VPN client software (L2TP, IPSec, PPTP, and Cisco VPN), WPA2 Enterprise (plus other WEP and WPA standards), and 802.11x authentication.

3. Custom applications

The original iPhone was a completely closed platform. The only applications allowed on the device were the ones put there by Apple. With iPhone 2.0, Apple has relaxed that restriction considerably with the launch of its iPhone software developer kit (SDK), but it’s not a completely open system either. Apple controls most of the applications through its App Store.

However, Apple has also opened the door for businesses to build and deploy their own custom applications using the iPhone Developer Program and the iPhone Configuration Utility (see next section). For IT departments, one of the major drawbacks of the original iPhone was that users had to have iTunes — not an enterprise-approved application — for desktop syncing and software updates. With the advent of the iPhone Configuration Utility, that’s no longer the case.

4. Configuration profiles

For IT departments that want to deploy iPhones across large groups of employees, Apple now offers configuration profiles for the iPhone. These XML files can be used to tell the iPhone how to connect to enterprise systems as well as preconfigure the settings for Exchange, wireless networks, VPN, password policies, certificates, application restrictions, and users’ electronic signatures. The iPhone Configuration Utility is the tool used to create the profiles. plus it can also be used to deploy applications.

5. Enterprise rate plans

AT&T remains the exclusive U.S. carrier for the iPhone (internationally, Apple has contracted with a variety of different carriers). The first generation iPhone had a unique, strange, and somewhat confusing activation process that was handled through iTunes. That’s history. The iPhone now follows AT&T’s standard activation process and offers standard AT&T voice and data plans. The good news for businesses is that also means the iPhone can now be a part of AT&T’s enterprise rate plans.

Sanity check

Although Apple deserves credit for bringing the iPhone up-to-speed on business features — a wise move since a large number of the iPhone’s most enthusiastic adopters are business people — we should simply think of these upgrades as bringing the iPhone up to the minimum requirements for business.

The iPhone still does not have the long-hardened security or the wide array of third-party business applications that you’ll find on RIM’s BlackBerry, the incumbent enterprise smartphone. As such, I don’t expect the iPhone to be embraced in high-security environments such as government, health care, or large financial institutions, but it will now be good enough for most other businesses.

Apple is still playing catch-up from an enterprise standpoint, but at least it’s in the game now.

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