Less than a year after the iPhone first launched, all of the key issues I had with the device have been addressed. First and foremost, there is now an SDK which allows the development of native applications. And while Exchange integration would eventually have arrived from a third party, Apple decided to bite the bullet and deliver it out of the box. Along with that comes a variety of device management and security features which demonstrate that Apple is aggressively targeting the iPhone for the enterprise.

new features and capabilities In addition to providing a relatively robust SDK to develop rich, smart-client applications, Apple licensed Exchange ActiveSync from Microsoft to be able to provide the following features:

1. Push e-mail
2. Push contacts
3. Push calendar
4. Global Address List
5. Certificates and Identities
6. WPA2/802.1x
7. Enforced security policies
8. More VPN protocols
9. Device configuration
10. Remote wipe

it’s response
Enterprise IT organizations are always looking to leverage existing investments, and one of the greatest benefits of Windows Mobile has been out-of-the-box integration with Exchange Service. This has been one of the reasons that Windows Mobile has been gaining ground against BlackBerry, and now Apple has decided to leverage Microsoft’s momentum and license Exchange ActiveSync for the iPhone. This will allow the iPhone to offer some of the key benefits also provided by Windows Mobile using Exchange ActiveSync, not to mention the fact that iPhones will now integrate seamlessly into any organization that provides Exchange support for Windows Mobile. There will still be the many organizations with significant BlackBerry investments who will continue down that path because of the investments already made (including the firms running Lotus Notes who are not able to provide Windows Mobile support without a third-party product anyway), but if anything this will only accelerate the adoption of Exchange ActiveSync as the industry standard for mobile synchronization.

microsoft’s perspective
As someone who has spent the last decade focused entirely on building applications for Microsoft’s mobile platform (since Windows CE 1.0), I’m torn when I look under the hood and examine the pure economics of the situation. Microsoft’s profit (or loss) related to sales of Windows Mobile devices is minor compared to the enormous profits and incredible margins in the sales of server and client licenses for Windows and Exchange Servers. Given that, it is no surprise that the formal job description for those Microsoft employees who are out there selling
Windows Mobile specifically states to use “Windows Mobile devices to influence .NET Server sales related to mobility.” Given that context, it is absolutely no surprise that Microsoft chose to license Exchange ActiveSync to Apple for the iPhone. While it gives the iPhone significant competitive ammunition versus Windows Mobile, it actually accomplishes that by standardizing on back-end Microsoft server products, where Microsoft makes all of their money anyway. While I don’t believe for one second that Microsoft has given up on Windows Mobile, Apple has certainly raised the bar, and Microsoft will need to step up to the plate on a number of levels and execute a series of dramatic enhancements to their own platform.

the flipside
While the iPhone is a great device for the average consumer, it is not for everyone. For instance, the form-factor, touch-screen keyboard, and inability to swap batteries are serious downsides for some users. And while the SDK goes a long way in enhancing the platform, the iPhone development platform doesn’t come close to the richness of the ecosystem around Visual Studio and the .NET Compact Framework. Given the fact that Apple must approve all iPhone applications, and with all distribution going through iTunes, there are many software developers and enterprises alike that will not necessarily appreciate these requirements. Additionally, there still is no support for products like SQL Server Compact or System Center Mobile Device Manager, which are significant challenges primarily for enterprise organizations. Although security is dramatically improved, there still is not yet the flexibility provided by other platforms.

my views
While the iPhone still isn’t perfect, it has reached a level of maturity where IT organizations, small and large alike, need to place the iPhone on their radar if they haven’t already. This is good news for Apple and great news for Microsoft. As twisted as it seems, an alliance between
Apple and Microsoft on Exchange ActiveSync will only increase profits for both companies, as they are now perfectly positioned to steal market share from BlackBerry as the next enterprise deployment cycle rolls around.
My final thought is to make sure you don’t forget Windows Mobile. Unlike the iPhone, it’s not just a smartphone; it’s a robust platform for enterprise applications. In fact, it’s the mobile platform that Apple uses in their retail stores to process sales of iPhones, using Windows Mobile-powered Symbol/Motorola handhelds.
In the end, if iPhone sales go up, Microsoft makes money on the Exchange Server licenses. If they go down, Microsoft makes money on Windows Mobile.
Not a bad arrangement!

By : Nathan Clevenger @ smartphone & pocket pc magazine, Jun/Jul 08