Interest in the iPhone 3G continues to rise among corporate customers, which should bode well for Apple’s prospects for selling more Macs to businesses.

The latest survey of IT purchasing plans from Rockville,Md.-based ChangeWave Research shows Apple gaining ground at the expense of both Research in Motion (BlackBerry) and the ever-sinking Palm.

When asked which smart phone they expected to buy in the next quarter, 17 percent of the companies said they’d purchase iPhones, up from 14 percent in May. The most recent survey, conducted Aug. 11-21, queried 1,947 respondents.

The BlackBerry, while remaining far ahead of the iPhone with 79 percent, fell three percentage points from the May survey. Palm slipped from 8 percent to 6 percent.

ChangeWave’s Paul Carton noted in his report that RIM’s new BlackBerry model, the Bold, is not yet available in the United States. Customer anticipation of new RIM models could have influenced the results, though that won’t be clear until the next survey (probably in November).

Nevertheless, Carton views the August results as positive news for Apple.

“While recent ChangeWave consumer surveys have shown the 3G iPhone having a huge impact on consumer demand, the current results show the iPhone is beginning to gain real traction in the corporate market as well,” Carton said.

In a related question, 19 percent if the respondents said the iPhone 3G made their company “more likely” to buy Apple products in the future, with only 1 percent saying “less likely.”

“Thus the 3G iPhone release appears to be having a positive ‘halo’ effect in terms of improved overall corporate purchasing intentions for Apple products in general,” Carton said.

Just the other day I wrote about how Apple’s overtures to businesses with the iPhone 3G could be contributing to an upsurge in Mac sales in the enterprise. The ChangeWave survey provides some real-world evidence that this indeed is happening.

Posted by David Zeiler at 8:39 AM | Permalink | Comments (3)
                       

When a fellow worker in Chinese iPhone factory casually snapped her picture, neither could have imagined the Internet buzz they would generate.

It started when a visitor to MacRumors posted three pictures of the winsome young lady (her name has not been released) in an iPhone forum on the site Aug. 20.

“Not sure if this is or is not the 'norm' but I just received my brand new iPhone here in the UK and once it had been activated on iTunes I found that the home screen (the screen you can personalise with a photo) already had a photo set against it!!!!” wrote Markm49uk of Kingston Upon Hull. “It would appear that someone on the production line was having a bit of fun - has anyone else found this?”

The photos attracted enough attention that news organizations both in the U.K. and China soon took an interest. This morning the South China Morning Post tracked down someone at Foxconn Technology Group, the Taiwan-based contractor that builds the iPhone for Apple, who confirmed the girl works in a factory in the city of Shenzhen.

The spokeswoman explained that the workers may have taken the photos to test the device but neglected to delete them. Another Foxconn official told China’s, Southern Metropolitan Daily that the mystery girl had not been fired, as several of those commenting on the MacRumors forum had predicted.

Apple as usual had no comment when contacted by the Associated Press, but I think it could be missing a big opportunity here.

Apple could encourage factory workers in Asia to put their photos -- or even their names -- on the iPhones, iPods and Macs they build as a fun gimmick so customers could see the person who built their device. Apple could even supply a template for the workers: “Designed by Apple in California. Built by [insert name here] in Shenzhen, China.”

Not every device would have a photo of course, so getting one would be like winning a raffle. It could be one more thing that would set Apple apart from the competition and make its products even more personal.

Why not?

Posted by David Zeiler at 3:40 PM in iPhone | Permalink | Comments (15)
                       

Apple’s success with consumers has begun to spill over into the enterprise market, with Mac adoption among enterprise customers increasing four-fold in less than two years.

Mac use in businesses rose from 1.1 percent in October 2006 to 4.5 percent in June of this year, according to a report by analyst Benjamin Gray of Forrester Research released Friday and made public by eWeek’s Joe Wilcox.

While 4.5 percent of the enterprise market may appear puny next to the nearly 95 percent held by Microsoft’s Windows, it is nevertheless startling that the Mac has made any headway at all in a market in which it had languished for years.

An array of stubborn perceptions made the Mac a pariah platform in the enterprise. Windows PCs were cheaper. IT departments didn’t want to support a second platform or deal with Mac-Windows network integration issues. Many disliked the Mac because only one vendor manufactured it, meaning no competitive bids and no replacement vendor if Apple went under.

Meanwhile, Apple rarely bothered to court the enterprise, preferring to emphasize its identity as a consumer technology company. Given Apple’s exploding growth in recent years, it’s hard to argue with the strategy.

Somewhere along the way the efforts to win over consumers, particularly its emphasis on ease of use, began to sway opinions in the enterprise.

“Apple’s singular focus on user experience has resulted in some success in the enterprise – without even trying to break into the market,” Grey wrote in his report.

The Forrester report also cites virtualization (the ability to run a different operating system in addition to the one native to the computer) as a reason businesses have taken more interest in the Mac, but today’s Macs go beyond virtualization.

Thanks to their Intel-made CPUs, current Macs can run Windows XP or Vista not only in a virtual environment, but also natively via Apple’s free Bootcamp utility. That versatility removes much of the risk IT heads associated with buying Macs.

Wilcox predicted the iPhone’s popularity would create a “halo effect” akin to that the iPod had in attracting more consumers to the Mac. Apple in fact has made a play for business customers with the iPhone by adding support for Microsoft Exchange, which most businesses use to run their e-mail.

Many executives once loyal to Research in Motion’s BlackBerry now own iPhones and have started pushing their IT people to support it in-house. Since the iPhone runs Mac OS X, support for Macs isn’t much of a leap.

Finally, Gray offers this reason for Mac growth among businesses: “Tech populism drives younger, more tech-savvy workers to buy whatever they need to work smarter, faster, and cheaper.”

Today’s students are tomorrow’s young workers, and ever-higher numbers of them are Apple customers. In a report released earlier this month research firm IDC said Apple had regained the lead in notebook sales from Dell with 36.5 percent of the market. Dell sunk to 27.1 percent.

“What we’ve seen over the past couple of years is a significant increase in the number of students who own an Apple laptop or Apple desktop or plan to buy one,” Eric Weil of Student Monitor, a research company focused on college students, told Investor’s Business Daily.

It all adds up to another perfect storm for Apple, and another reason why it could enjoy year-over year Mac sales growth of 30 to 40 percent for quite a few quarters to come.

Imagine what would happen if Apple actually put some effort into selling Macs to the enterprise. Yep.

Posted by David Zeiler at 8:35 AM in Mac market share | Permalink | Comments (3)
                       

After the botched MobileMe/iPhone 3G launch, as well as more recent problems users have reported with iPhone 3G reception, you’d assume customers would punish Apple.

Add to that an assortment of other issues over the past year or so, from the bricking of unlocked iPhones last fall to a plethora of Mac OS X Leopard bugs to last week’s iPhone “kill switch” dustup, and you have a lot of reasons consumers might want to avoid Apple products.

But whatever the disappointments, you won’t see it reflected in the company’s third quarter sales numbers.

Apple is expected to report another record quarter in September, according to a note to clients by Royal Bank of Canada analyst Mike Abramsky. AppleInsider reported this morning that Abramsky said Apple should see year-over year growth of 44 percent, with Mac sales topping 3 million for the first time.

That would beat the previous record – 2.496 million Macs sold, just set in the July quarter – by an amazing 20 percent. Abramsky also predicts iPhone 3G sales for the quarter to reach 5.1 million, which would nearly double the previous record for iPhone sales (2.315 million in the December 2007 quarter).

Earlier this week Apple made news by scoring 10 points higher than its closest competitor (Dell) on the University of Michigan’s American Customer Satisfaction Index. Apple received its highest score ever, 85 on the ASCI’s 100-point scale. Last year it scored a 79.

"Apple is not without its quality problems," ACSI project head Claes Fornell told Computerworld. "People know there have been some service and product quality problems, but Apple has an almost Teflon-like quality. Its problems don't really seem to matter to consumers."

The ASCI survey was taken before the MobileMe launch and recent iPhone 3G problems, but it seems someone is always complaining about an Apple product or service, if not taking them to court.

How can Apple commit so many wrongs and yet continue to enjoy record customer satisfaction numbers and booming sales growth?

Apple’s hold on customers can’t be completely explained by the “fanboy effect”; that is, people so devoted to the company they forgive it for any transgression. Apple has added many new customers in the past few years that do not fall into that category, from casual iPod owners to disgruntled PC users switching from Windows.

Such customers have bought Apple products with high expectations they would “just work.” I can’t imagine they’d tolerate consistently poor quality and bad service when those factors most likely drove them into the Apple camp.

Here’s what I think Apple’s “Teflon” is made of:

Cool factor: Apple’s marketing machine has successfully sold the idea of Apple as the coolest consumer technology company, a notion reinforced by its acclaimed product designs. People who buy Apple products feel that the company’s hip image will reflect on them. It doesn’t fix the problems, but it makes it harder to turn away from Apple.

Worse alternatives: Even if you have had a bad experience with Apple, many know first-hand that living with a Dell or Hewlett-Packard PC running Windows could be worse. Apple’s seamless control of the entire user experience has no substitute in the consumer technology world.

Apple trying harder: Though historically poor at fixing problems, Apple has gotten better recently. Not only did it work hard to address MobileMe’s problems, it just this week gave MobileMe account holders 60 more free days in addition to the 30 days it awarded a month ago. The company apologized. Customers will forgive a company that makes an effort to make things right.

Apple also has made an effort to get software fixes out to customers more rapidly, although it could do a better job of explaining to affected customers what the heck is going on (e.g., this week’s iPhone 3G reception fix).

Not as bad as it looks: Apple benefits from the media’s obsession with it when it rolls out new products – no tech company gets comparable attention – but that backfires when Apple has trouble. Many of Apple’s problems that draw extensive coverage would be largely ignored if they befell another company.

Squeaky wheels: With the exception of some large-scale blunders, like the MobileMe/iPhone 3G launch, most of Apple’s problems affect a relatively small number of customers, many of whom are very vocal. Most Apple customers have minor, easily rectified problems, and have no serious beef with the company.

For Apple to lose massive numbers of customers, it’s going to have to commit sins far worse than any it has thus far and be utterly non-repentant.

Posted by David Zeiler at 4:37 PM | Permalink | Comments (9)
                       

To protect the iPhone from malicious software, Apple made a controversial choice.

Last Wednesday the iPhone Atlas Web site noted the discovery of code in the iPhone operating system that linked to a page on Apple’s Web site. Dubbed the “kill switch,” the code appears to be part of a system that would allow Apple to zap an iPhone app remotely.

Detected by Jonathan Zdziarski, an iPhone developer and author of two books on the iPhone, the page looked like the framework for a blacklist of iPhone apps, though it listed no programs.

For the terminally curious, the page generates this odd string of data:
{ "Date Generated" = "2008-08-12 19:11:39 Etc/GMT"; "BlackListedApps" = { "com.mal.icious" = { "Description" = "Being really bad!"; "App Name" = "Malicious"; "Date Revoked" = "2004-02-01 08:00:00 Etc/GMT"; }; }; }

Later posts by Zdziarski suggested the kill switch might be directed only at programs trying to access the global positioning software, which could transmit the location of the iPhone to a cybercriminal.

After several days of speculation in the blogosphere as to the legitimacy of Zdziarski’s claim, Monday’s Wall Street Journal obtained verification from Apple CEO Steve Jobs himself: “Hopefully we never have to pull that lever, but we would be irresponsible not to have a lever like that to pull.”

Since then the debate has focused on whether the kill switch oversteps the bounds of Apple’s authority. Many believe it’s a violation of privacy. Others worry Apple would wield the kill switch to nuke a legitimate app.

That Apple would zap legit apps customers have purchased strikes me as unlikely. After all, Apple has veto power over every piece of software in the App Store. Unless an app contained malicious code that escaped detection, Apple would have no reason to kill it.

Besides, Apple suffered enough of a PR black eye over the MobileMe/iPhone 3G launch fiasco. Why would it create another one by killing valid iPhone apps?

I think the kill switch is exactly what it appears to be: an emergency-use-only tool for Apple to prevent malware from getting a toehold on the fledgling iPhone platform.

Recall that when the iPhone debuted in June 2007, it was closed to developers precisely because of Apple’s malware fears. And though Apple announced in October it would make an SDK available, that SDK was not released until the following March, with security concerns cited as the cause of the delay.

From Steve Jobs’ October announcement: “There have been serious viruses on other mobile phones already, including some that silently spread from phone to phone over the cell network. As our phones become more powerful, these malicious programs will become more dangerous. And since the iPhone is the most advanced phone ever, it will be a highly visible target.”

So a kill switch fits the pattern of Apple’s previously demonstrated paranoia over iPhone vulnerability.

I also wonder how the iPhone community will react when a clever hacker sneaks some nasty code into an otherwise innocent-looking app and it slips by Apple’s screening process. It’s inevitable.

And just as predictably angry iPhone owners will expect Apple to come to the rescue.

At that point millions of iPhone owners will be grateful for the kill switch, regardless of how they feel about it now (yes, I’m talking to you, Dan Gillmor).

While I understand why it makes people uneasy, putting a kill switch in a device otherwise defenseless against malware seems to me a wise precaution.

Opinions?

Posted by David Zeiler at 12:50 PM in iPhone | Permalink | Comments (14)
                       

In yet another signal of Apple’s determination to build market share for the iPhone, Best Buy will start selling the popular smart phone as of Sept. 7.

The Best Buy deal means customers will have nearly 1,000 more places to purchase an iPhone. Apple has 189 U.S. stores, while AT&T has more than 2,000.

More precisely, the iPhone will be sold through Best Buy Mobile, a joint venture with U.K.-based Carphone Warehouse Group PLC. Carphone Warehouse already sells the device in the United Kingdom.

Best Buy, of course, has an arrangement with Apple to sell Macs and iPods. Those existing relationships reportedly eased the deal.

The terms of sale will be identical to what you’d get buying from an Apple or AT&T store: the same prices ($199 for the 8 GB model, $299 for the 16 GB model) and the same requirement for a two-year service contract with AT&T.

Selling more iPhones obviously benefits AT&T and Apple, but what’s in it for Best Buy?

Since it will offer the iPhone at the same prices as Apple and AT&T, one wonders whether Best Buy will make much money, if any, from serving as an iPhone retailer.

Apparently Best Buy hopes the iPhone will bring in new customers while enhancing the chain’s tech hip factor.

“It solidifies us as the place to go for the cool stuff,” Best Buy Mobile president Shawn Score told Reuters, also noting that customers have been asking for the product.

One wonders if Apple might consider more deals with retailers to sell the iPhone. Though Apple told the Wall Street Journal that it has no plans for other U.S. deals, we all know how easy it is to find an iPod. Apple’s desire to make the iPhone ubiquitous could encourage more partnerships in the future.

For example, adding RadioShack’s 6,000 stores to the retailing mix -- it already sells other AT&T phones – would more than double the number of places where the iPhone is sold.

Posted by David Zeiler at 3:13 AM in iPhone | Permalink | Comments (2)
                       

A team at the Massachusetts Institute of Technology working on a project to build a computer affordable by Third World families is basing its design not on the Apple II, but on the Nintendo Entertainment System, which used the same processor chip.

Several Mac Web sites noted yesterday a Monday Boston Herald article describing the Educational Home Computing Initiative, part of this month’s MIT International Design Summit. The goal is to develop a rudimentary computer that will cost only $12.

Though one of the designers, 27-year-old graduate student Derek Lomas, said in the Herald story that he hoped to give Third World schools “Apple II computer labs like the ones I grew up with,” the machine he and his team are working on probably will not be able to run Apple II software without considerable effort.

“The machine we are using is not the same as the Apple II,” Lomas explained to me via e-mail. “It is actually based upon the Nintendo Famicom [known in North America as the Nintendo Entertainment System], which also used a 6502 [processor].”

Because it was much less expensive than other processors available at the time -- primarily the Motorola 6800 and the Intel 8080 -- the MOS 6502 chip was a popular choice for several early personal computers and video game systems of the late 1970s and early 1980s.

The NES, however, used a customized version of the 6502; hence the difficulty in adapting Apple II software to an eventual eHCI machine.

“We’d still love to use old Apple II games, because there were a lot of great ones,” Lomas said. “This would require some significant porting. We’d either try to acquire the [intellectual property] from the old game developers, or just adapt the games for different regions.”

For that matter, intellectual property questions could create problems for the eHCI project down the road.

Although most if not all of the NES hardware patents are past their 20-year expiration date, the project’s Web site notes that Nintendo still holds all the copyrights to the NES. It describes the legality of producing any kind of clone as an “open question.”

Lomas conceived the idea for the ultra-cheap PC during a recent stay in India, where he noticed people using inexpensive keyboard and console units hooked up to TV sets. He believed he could add a bit more functionality without increasing the price.

The project Web site lists two main goals: to add flash memory to the game cartridge and to find a way to provide Internet access, possibly via a cellphone using short-range Bluetooth wireless technology.

Legal and technical challenges aside, I wish Lomas and his team all the best. Even a low-functioning computer could help teach large numbers of people in developing nations economically valuable skills.

As Lomas told the Herald, “If you just know how to type, that can be the difference between earning $1 an hour instead of $1 a day.”

Posted by David Zeiler at 8:33 AM | Permalink | Comments (4)
                       

In a rare admission of culpability, Apple CEO Steve Jobs sent out a memo to employees last night admitting that launching MobileMe at the same time as the iPhone 3G was a bad idea.

The memo, obtained by Web site Ars Technica, was sent to Apple employees Monday evening.

“It was a mistake to launch MobileMe at the same time as iPhone 3G, iPhone 2.0 software and the App Store. We all had more than enough to do, and MobileMe could have been delayed without consequence," Jobs wrote.

Since I came down pretty hard on Apple and Mr. Jobs in the aftermath of the chaotic MobileMe launch, during which customers had trouble accessing the service (particularly their e-mail) and activating their new 3G iPhones, I’d like to be among the first to applaud this admission Apple could have executed better.

Jobs goes on: “The MobileMe launch clearly demonstrates that we have more to learn about Internet services. And learn we will. The vision of MobileMe is both exciting and ambitious, and we will press on to make it a service we are all proud of by the end of this year."

Good for you, Steve. In the past Apple has struggled to admit mistakes, which inevitably has delayed correcting them. Perhaps Jobs has had an epiphany. (We can hope.)

I suspect the unusually negative publicity that accompanied the iPhone 3G/MobileMe launch and the ensuing MobileMe service glitches caught Jobs’ attention.

And not just Apple bloggers like yours truly, but major tech journalists such as David Pogue of The New York Times and Walt Mossberg of the Wall Street Journal. Those two nearly always swoon over everything Apple does, but both had harsh words for MobileMe. That must have bruised Jobs’ ego.

But hey, whatever works, right? Apple is committed to making MobileMe work as intended, and that’s all that matters now.

Posted by David Zeiler at 12:18 PM | Permalink | Comments (4)
                       

Even as Apple revels in the sales successes of the iPhone 3G, the reigning king of smart phone market share – Research in Motion – is preparing to launch as many as three new BlackBerry models.

According to Rockville, Md., -based ChangeWave Research, this scenario puts Apple and RIM “on a collision course in the consumer smart phone market.”

In a follow-up to its June survey, which showed RIM leading Apple among consumers with 42 percent of the market versus 11 percent, ChangeWave asked its members how likely they would be to buy one of the new BlackBerries.

Each of the models – the already announced “Bold” as well as two other expected variations, the “Thunder” and the “Kickstart” – showed “considerable potential among consumers.”

The most expensive of the new BlackBerries, the $299-$399 Bold, proved the most popular, with 17 percent saying they’d be very likely or somewhat likely to buy it. The middle model, Thunder ($199-$299), generated a bit less interest (15 percent) and Kickstart, with the cheapest price range ($149-$199), the least interest (13 percent).

One would expect the opposite, particularly given Apple’s findings that its customers wanted a cheaper iPhone (Apple CEO Steve Jobs said in his WWDC keynote that the number one reason people didn't buy iPhones is because they just can't afford it (56%)."

Then again, it could be that Apple and RIM may not be competing for as many of the same customers as one might think.

Another question sorted the data by which brand of phone the respondent already owned. Of current RIM customers, 47 percent were very likely or somewhat likely to go for the Bold, for example.

Only 9 percent of current iPhone owners said they’d be likely to buy a Bold. Even fewer (6 percent) would be likely buy the cheaper Kickstart. Only 2 percent expressed interest in the Thunder.

Most of the phone makers didn’t enjoy that kind of loyalty. Among Palm customers, 31 percent were willing to try the Bold. Other manufacturers had numbers ranging from 11 percent (LG) to 15 percent (Samsung). Only Nokia had customers nearly as loyal as Apple’s, with numbers in the 8 to 10 percent range.

ChangeWave predicts these “second-tier” players will suffer “as the two Goliaths battle for market place dominance.”

The new data indicate Palm will get hit the hardest, adding to the evidence from ChangeWave’s June survey: Palm’s market share dropped from 29 percent in April 2007 to 14 percent in June.

The next ChangeWave smart phone market share survey is due in the fall (usually the data is released in October). Stay tuned.

Posted by David Zeiler at 9:01 AM in iPhone | Permalink | Comments (1)