Are Apple and RIM morphing into each other?

The iPhone is increasingly seen as a business tool

The battle lines between Apple and Research In Motion (RIM) were always neatly delineated. Apple's iPhone was a purely a consumer venture, while the BlackBerry took the lion's share of business and enterprise accounts.

However, the goalposts have moved in the past three years, and both companies are cannibalising each other's market space. RIM is slowly moving into the consumer smart device space, and Apple's iPhone and iPad have surprisingly been heralded as genuine business tools.

Analyst firm Gartner can be held at least partly accountable for corporate hesitance towards iPhone deployment among employees. Back in 2007, analyst Ken Dulaney issued a withering statement about the iPhone's chances in the business space.

"We're telling IT executives not to support it because Apple has no intention of supporting iPhone use in the enterprise. This is basically a cellular iPod with some other capabilities, and it's important that it be recognised as such, " he said.

While the iPhone was locked exclusively into O2 in the UK, the BlackBerry was available on a host of carriers, including T-Mobile, Vodafone, O2, Orange and Virgin. This helped to give RIM a saturated market, and left Apple virtually missing out in smartphone market share.

However, Apple was working on something for 2008 that would change the way users and corporates thought about iPhones.

On 6 March 2008, Apple announced plans to release the software developer kit (SDK) for the iPhone, and teased that it would have "some exciting new enterprise features".

The features turned out to be Apple's licensing Microsoft Exchange ActiveSync for the iPhone. This gave the iPhone wireless push mail and the ability to connect directly to enterprise mail servers. Apple was making all the right noises to entice businesses, with buzz words like 'reliability' and 'security' ringing out loud and clear.

The iPhone now had hardware encryption and secure access to corporate VPN servers and Wi-Fi networks. It was an impressive first stab at corporate credibility for Apple.

The release of the SDK also turned out to have an even bigger impact than Apple had imagined. It opened up the floodgates for third-party developers to create business applications for the iPhone.

Under Apple's tightly controlled apps licensing process, third-party developers started creating an array of business apps for enterprises. Security and reliability were key concerns for Apple, and the company's philosophy harmonised with corporate necessities.

Apple's move started to pay off. Figures from Canalys showed that the global smartphone market grew by 67 per cent in 2009, with RIM making strong gains.

However, Apple's share climbed from 11 per cent a year ago to 16 per cent in the first quarter of this year. This was partly due to breaking free from the shackles of O2, and partly its move to a much wider slice of buyer.

At the same time that Apple was moving steadily towards corporate users, RIM started moving in the opposite direction. In 2009 RIM did the unspeakable and released two consumer smartphones: the touch-screen BlackBerry Storm 2 and the Bold 9700. Unfortunately for RIM, the words 'iPhone killer' were already on the lips of the waiting world.

The Storm 2 was a good smartphone, but it lost its way in such a fierce market. Traditional BlackBerry users didn't like the touch screen, soft keyboard, built-in webcam and music player. At the same time, there were too many excellent consumer alternatives from Apple, HTC, Sony, Nokia and Samsung.

Despite set-backs for Apple and RIM, both companies' products began to merge in 2010. Apple built the iPad consumer tablet with corporate features, bundling support for Microsoft Exchange and secure access to corporate data. The device has since been laden with apps from enterprise vendors including Citrix, Wyse a nd Cisco, making it a viable working tool.

Antenna issues aside, the iPhone 4 also positioned Apple's smartphone as a business tool. Email and attached documents are now secured using key-generated encryption, and in-house applications can be provisioned from a web server.

In return, RIM is using 'monkey see monkey do' tactics to consolidate its position in the consumer smartphone market, and is reportedly developing another touch-screen smartphone and a tablet device.

According to a reports, the smartphone will have a slide out keyboard and run on RIM's updated BlackBerry OS. RIM declined to offer more information on the tablet, but an educated guess would place it as a would-be iPad killer.

If both companies keep operating in different end user markets there is a chance they will alienate their traditional user base. That said, while both companies were busy morphing into each other, a greater threat in the guise of Google's Android appeared on the horizon.

Google's own smartphones are no longer a threat since it has announced plans to stop selling the Nexus One, but its open-source Android operating system has been widely deployed over consumer and business devices simultaneously. Android is ubiquitous on handsets from HTC's consumer Wildfire smartphone to Cisco's recently announced Cius business tablet.

Apple might have initiated the consumerisation of corporate IT, but companies like Cisco are keen to exploit that trend. This could make Android the perfect tool to expand in both directions, outfoxing RIM and Apple.

RIM still has the biggest slice of the corporate pie, but its market share is slipping in North America and it's not Apple's fault. Recent reports on the US smartphone market by research house comScore saw RIM and Apple lose share.

The research was performed over a three-month period ending in May 2010. RIM had a 41.7 per cent share, while Apple had 25.4 per cent and, in that short period of time, both companies lost share to Google. Android moved up to 13 per cent, nearly displacing Microsoft from fourth place.

RIM still has the heart of IT managers in corporations but, in trying to mimic Apple, the firm has taken its eye off the ball. RIM doesn't have Apple's technological savvy, and lacks the depth of penetration from third-party vendors to support its hardware at work.

The company is also running separate business and consumer portfolios, when the rest of the world is moving to consumerised enterprise IT. RIM has excellent hardware and needs to exploit the same trend as Apple and Google if it wants to come out fighting in the 2020s.