Gartner: iPhone 3G's business-readiness still in question

The next-gen iPhone may not have adequate security to meet corporate needs

It's been eight days since Apple officials publicly described new features and functions related to a July 11 release of its new iPhone 3G. However, prominent industry analysts are saying that some of the basic information needed to judge its readiness for use in large companies, including details on security, is still unknown.

Gartner analyst Ken Dulaney yesterday issued a near-glowing eight-page report on iPhone 3G as it relates to consumers. However, he said IT groups in large companies need to wait until second-generation software is available July 11 before they make a final decision on whether to support the iPhone.

Analyst Jack Gold, of J. Gold Associates, issued a report citing security and support concerns of the iPhone 3G, concluding that it is "still coming up short for the enterprise." Gold said he was particularly concerned about the lack of native encryption to protect data on the device in the event it is stolen. Encryption of data on a device is available on the BlackBerry from Research in Motion and the latest version of Windows Mobile as well as some other operating systems, he said today.

Dulaney said the new iPhone 3g has neither a firewall nor native encryption, "so banks and federal officials are not going to use it." He said Nokia has introduced native encryption on E series devices and that iPhone 3G could eventually have something comparable, but not so far.

Dulaney and other analysts have not been allowed to test the product or examine details behind it, hindering their ability to make recommendations in advance of a release. Meanwhile, Apple has signed up many large businesses to test software and a related Software Development Kit, but none are willing to talk publicly about their experiences because they are bound by nondisclosure agreements.

At the Apple's Worldwide Developers Conference last week, top Apple officials asserted that many large businesses, include large banks, are enthusiastic supporters of iPhone 3G, but IT managers said they would not consent to be interviewed by Computerworld, citing the NDAs, which are widely used in the computing and communications industries.

The analysts said they couldn't blame the beta testers for keeping silent, but said Apple's policies are almost counter-productive. It's also possible that Apple is trying to tease the market to keep up interest, they and several Apple observers on blogs noted.

Apple could not be reached to comment.

Dulaney wrote that because Gartner has been unable to test the iPhone's new features, it is "difficult to say to our end-user base that what Apple promised to deliver to businesses is really there." He said for a business to commit to the iPhone 3G would be a "calculated" risk, but one that is lower than average because the device will have Exchange ActiveSync support.

Dulaney described the BlackBerry as the "gold standard" for security in handheld devices and called comments from market analysts who believe the iPhone will compete with the BlackBerry "premature." He also said the iPhone remains behind devices using Windows Mobile, especially with regard to security.

Having iTunes as a means of delivering business applications is also undesirable because it is not a "mission critical" application, Dulaney added. He also questioned what Apple plans to do regarding hardware and software support, especially in countries outside the US.

While Gold and Dulaney questioned the business readinesss of iPhone 3g, Dulaney predicted that the US$199 price for the lowest model iPhone 3G plus the variety of new compepling applications will mean the iPhone "will enter the enterprise en masse" whether endorsed by IT managers or not. As such, IT organizations should become familiar with the product when it ships.

"The iPhone will prove extremely popular in the market," Dulaney said. "....[T]he iPhone is a phenomenon in the computing industry and should be recognized as such."

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