Apple In Business: Riding The iPhone Wave

Apple's iPod made its way into business environments as employees realized that, in addition to all those MP3 files, they had 60 Gbytes of portable storage to take into the office. Then came the iPhone and its growing array of browser-based business applications. Is Apple's grassroots popularity translating into more business sales?

Apple officials won't answer that question directly, but the anecdotal evidence suggests that Apple is riding the "prosumer" wave for all it's worth. "We're seeing a lot of growth in business use," Apple's COO Tim Cook said at a press event in August. "Mac is growing, and a lot of that is business."

At Apple's Worldwide Developers Conference in June, CEO Steve Jobs noted that Apple has more than 950,000 registered developers, up from 750,000 last year. With the new, fast Intel(INTC)-based processors, Apple's innovative design, the stability and security of the Mac OS X operating system, and software like iChat videoconferencing and the latest iWork productivity suite, businesses have many reasons to switch to the Mac, says an Apple spokesman. Apple's roster of customers includes Google(GOOG) and several other large business users.

Apple doesn't distinguish between sales to consumers and businesses, but Gartner reports that $897 million of Apple's revenue in the United States in the second quarter of this year came from the professional market, compared to $610 million from consumers. The revenue is for destop and notebook computers only, and excludes software and consumer electronics devices such as the iPod. Within the professional segment, 50% to 70% of Apple's revenue comes from the education sector, 20% to 30% from small and midsize businesses, 5% to 10% from the government, and 5% to 9% from enterprise customers, according to Gartner's estimates for the past four quarters.

Microsoft(MSFT)'s doing its part to help. Microsoft on Sept. 25 said it will ship a Macintosh version of its new Office productivity suite in January. Office 2008 for Mac will come with Word 2008, Excel 2008, PowerPoint 2008, and Entourage 2008, a contact and scheduling application.

Entourage 2008 will make it easier to adjust out-of-office settings, which previously had to be accessed through Apple's Safari Web browser in Outlook Web Access. Office 2008 will be the first to use the Aqua toolkit, making it a native Mac OS X application rather than a port of an older technology. That means the user interface will be more conformant to Mac standards. Users of Mac Office 2004 will be able to upgrade to Office 2008 for $239.95. The full retail version is priced at $399.95.

Several vendors also rolled out storage products for Macs at the Apple Expo 2007 in Paris. Iomega(IOM) introduced the UltraMax Pro Desktop Hard Drive for Apple's professional line of computers. The $600 drive comes with 1.5 Tbytes of storage. LaCie unveiled a two-disk RAID (redundant array of independent disks) system, a collection of drives that comes in 1, 1.5, and 2 Tbyte capacities. Western Digital introduced My Book Studio Edition external hard drives, with capacities from 320 Gbyte to 1 Tbyte.

Apple last year switched to using Intel chips in Macs, promising a complete transition to Intel by the end of this year. Previously, Apple used IBM's PowerPC processors. The switch gives Macs higher performance, according to Apple. It has also "instilled confidence" among IT managers in Apple, says Michael Fey, a software developer at PAR Government Systems, a provider of system design and IT services to the U.S. government. "Intel is the market leader for processors," he says. "Now Apple users can take advantage of their proven performance."