CEO Guide to Technology

Hungry for iPhone Business Apps


David Lin is traveling lighter for business lately. Ever since the software marketing exec bought an iPod Touch, he's often able to leave his notebook computer behind. "My goal is to replace the laptop," says Lin, vice-president for marketing at Denali Software, makers of electronic design-automation software.

He uses the device for such general tasks as checking e-mail and surfing the Internet. But when it comes to software apps that help users carry out specific business-related jobs—say, joining Web conferences—Lin has downloaded only a handful. And he hasn't paid a penny for any of them. However, "I would absolutely pay for a business app that made sense," Lin says.

Trouble is, there still aren't that many, even as Apple's iPhone and iPod Touch gain wider acceptance in workplaces. And when business users choose from those that are available, like Lin, they gravitate toward free software.

Although iPhone and iPod Touch users have downloaded more than 1 billion apps through Apple's iTunes App Store, it's not clear if business apps will ever come close to the popularity of games or other categories. At a time when more consumers are bringing iPhones into the office, it doesn't appear they're bringing many business apps with them. In March, Web analytics firm Compete.com surveyed 800 smartphone owners, including 102 iPhone users. About 79% of the iPhone owners downloaded games; 25% downloaded business apps. Of the approximately 35,000 apps available through the iTunes App Store, only about 1,600 are aimed at businesses.

Citrix Systems (CTXS) is one of the more recent business software companies to design an iPhone app. On Mar. 25 the company released an app called Citrix Receiver Lite that gives users access to Microsoft (MSFT) Windows applications and documents via iPhones. A more complete version is expected this quarter. Last year, Citrix weighed whether to create an iPhone app at all. "We had an internal dilemma," says Chris Fleck, vice-president for solutions development at Citrix. "Do we put resources on this, considering it's a consumer device?" So, Citrix wrote a blog post on its Web site asking if customers wanted to run Windows applications on the iPhone. That single post drew 140,000-plus views and received more than 200 comments. "The feedback we got was loud and clear," Fleck says. It wasn't just from IT customers but also from business users talking about the ways they wanted to use their iPhones at work.

Package Tracking and Voice Recording

Of the business apps that are available, free ones do best. As of May 3, 18 of the 20 most popular business apps were free. On the list: FedEx (FDX) Mobile for tracking packages. Nine of the top 20 paid business applications were voice recorders. One of the most popular business apps, called Recorder by Retronyms, sold about 300,000 apps for 99¢ apiece between July 2008 and April 2009. "The iPhone didn't have a built-in voice recorder, and we knew other phones did, so it was a hole in the phone that we could fill," says Zach Saul, co-founder of Retronyms.

Other apps in the store are free to download to the iPhone but require licensing of software or services to be able to use them. Oracle (ORCL) offers six different iPhone apps that do everything from make sales forecasts to help companies better organize data. All six require licenses to various Oracle software packages. Salesforce Mobile, for example, is free but ultimately requires users to license salesforce.com (CRM) customer relationship-management software services.

Even if they're not going to get rich directly from iPhone business apps, developers have other incentives to build them. First, they see the growing popularity of the iPhone within corporations and want to capture those users. Some developers say they develop for the iPhone because its users download more applications than BlackBerry users. Retronyms' Saul says developing business apps is attractive because the market is still in the early stages and growing quickly. "Apple is doing a lot to support business apps in particular," he says. The next version of iPhone software, due in June, will give developers the ability to sell additional services within their applications.

Already, business apps are getting advertising help from Apple. The company has recently begun a print ad campaign featuring a dozen free and paid business apps with the tagline "Helping you run your small business one app at a time." Apple is also running a TV commercial targeting small businesses showing them how they can use iPhones to process credit-card orders, print shipping labels, and check on order deliveries. In the past, similar commercials have been effective at getting consumers to try new apps, says Danielle Nohe, director of telecom and media for Compete.com. Two apps consumers singled out by name in Compete.com's March survey were Shazam, an app for identifying music titles and artists; and LoseIt!, which tracks weight loss. Both apps had been featured in TV commercials. "Apple has done a good job of educating consumers on why they need apps and how they can enhance their lives," says Nohe. It remains to be seen what impact those ads might have on small business owners, however.

BlackBerry App World

Developers hoping to sell business apps for smartphones now have another outlet. On Apr. 1, Research In Motion (RIMM) opened BlackBerry App World, an application store for BlackBerry smartphones. Currently, BlackBerry is the leading smartphone used at U.S. companies. Previously, BlackBerry users went to Handango and other online sites to download apps. Yet it's not clear just how much BlackBerry users are clamoring for apps. As of March 2009, about 32% of BlackBerry owners had not downloaded any applications to their smartphones, while that was the case for only about 2% of the iPhone users surveyed by Compete.com. About 46% of BlackBerry owners had downloaded 1 to 5 applications, and only 21% had downloaded more than 5 applications. Among iPhone users, 82% had downloaded more than 5 applications.

David Reed switched from a BlackBerry to an iPhone in December and says he's more satisfied with his new device. "The BlackBerry apps were pretty anemic," says Reed, a senior sales executive at Enablus, a software design firm in Alpharetta, Ga.

For now, Denali Software's Lin is stuck carrying two devices. Aside from his iPod Touch, he also uses a T-Mobile Dash, a Windows Mobile smartphone paid for by his company that he mostly uses for calls. Lin says he's been bugging his IT department to support the iPhone for a while, but it has reservations about the security of the devices for connecting to corporate e-mail. "I'm ready to switch," he says, "I've got two devices that I would like to converge into one."

King is a writer for BusinessWeek.com in San Francisco.

Rachael_king
King is a writer for Bloomberg Businessweek in San Francisco.

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