The Titan of Tablets: Apple or Cisco?

Is the iPad a serious business tool? That's what AT&T (NYSE: T  ) is reporting. While the iPad has enjoyed phenomenal success, news of business adoption of the gadget could be its greatest coup yet.

Business love for iPhones, not surprising
On AT&T's conference call, CFO Rick Lindner had the following to say:

One thing that's been encouraging and a bit surprising so far is the level of interest from business customers. And when we first introduced the iPhone, the businesses -- and in particular CIOs at the -- of our business customers were reluctant, and they kind of pushed back on bringing the iPhone into their infrastructure. And over time that's -- as you know, has changed dramatically, and now we have businesses that are developing applications and putting their own applications and content down on the iPhone base within their companies.

AT&T boasting of iPhone acceptance shouldn't come as a surprise. In May, AT&T revealed that 40% of iPhone sales were to business users. While IT departments may have concern about security issues, the iPhone handles typical email functions well, and the gap between its functionality and a BlackBerry's isn't vast.

Business love for tablets, more surprising
Apple
's (Nasdaq: AAPL  ) encroachment into the tablet arena is a bit more surprising, however. The argument against the iPad as a tool for business users has always centered around its lack of a physical keyboard and support for more intensive productivity tools like Microsoft (Nasdaq: MSFT  ) Office.

However, AT&T indicates businesses have found unconventional ways to use the iPad. They're giving it to employees for specialized tasks where a lightweight device is optimal and developing custom applications.

Even with limitations, business users are finding ways to utilize tablets. In some ways, this validates Cisco's (Nasdaq: CSCO  ) recent foray into the field. The company could never reach the same level of easy usability as an iPad, but Cisco's Cius tablet has a much broader vision. Cisco's aim is to be much more than a business tablet -- it wants to replace your PC. Ultimately, the company wants to use virtualization software to make the Cius a "thin client," a window into the same PC environment business users ultimately demand. If AT&T's statements illustrate businesses opening up to the idea of tablets, Cisco could be the best positioned to strike at the market.

Winners and losers in the world of tablets
Microsoft shareholders would be deservedly misty-eyed if these tablet trends took. The company spent more than a decade developing tablet concepts, with little success to show for their efforts. In the end, pushing a full featured operating system at tablets has proven sub-optimal. Cisco's Cius could be successful because it uses Google's (Nasdaq: GOOG  ) Android as a base operating system, but could connect to remote PC's when users are at desks and can connect keyboards and mice for precision control.

On the winner side, desktop virtualization makers stand to gain. Both VMWare (NYSE: VMW  ) and Citrix (Nasdaq: CTXS  ) could see boosts from tablets acting as "thin clients."

AT&T citing an "encouraging" level of business interest for the iPad is hardly the information that strong investing decisions are made of. However, as more tablets roll out the door, pay close attention to whether Cisco's vision can gain traction. If tablet computing can make sense for business users, there are many companies other than Apple that stand to see huge gains.

Eric Bleeker owns shares of Cisco. Microsoft is a Motley Fool Inside Value selection. Google and Vmware are Motley Fool Rule Breakers recommendations. Apple is a Motley Fool Stock Advisor pick. Motley Fool Options has recommended a diagonal call position on Microsoft. The Fool owns shares of Google. Try any of our Foolish newsletters today, free for 30 days. The Motley Fool has a disclosure policy.


Read/Post Comments (7) | Recommend This Article (33)

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  • Report this Comment On July 24, 2010, at 3:51 PM, gimmeabreak2 wrote:

    Nice article. Made me think.

    Thin client vs. fat client depends on bandwidth and latency. For my money, the typical network specs I encounter, all over the world, aren't good enough. Fat clients will rule at least for awhile, until and unless the network catches up.

    However, I can understand Cisco's interest. :-)

  • Report this Comment On July 24, 2010, at 4:08 PM, TMFRhino wrote:

    Thanks gimmeabreak,

    I'd have to agree with you, in my experience with VPN, the latency is too great.

    Of course, it's kind of a double push for Cisco. Even if they didn't win a tablet battle, if their idea took hold and encouraged more network development, the company can gain that way too.

    Best,

    Eric

  • Report this Comment On July 24, 2010, at 4:44 PM, daveshouston wrote:

    I think the iPad is such a natural device for certain business uses. A medical doctor making his rounds can have access to a world of information in a form factor that's easy to use while moving from room to room.

    A salesman can have product catalogs and presentations at his fingertips (Apple's Keynote iPad app can run PowerPoint presentations in a perfect form factor for casual meetings with customers (such as over lunch). He can also hook up a shirt pocket size projector for a larger audience.

    PDF documents of all kinds can drag and drop into your iTunes iBooks library. They then show up on both your iPhone and iPad using the iBooks App where they can be viewed and searched.

    The iPad is very adaptable. Business will find many uses for it.

  • Report this Comment On July 24, 2010, at 10:02 PM, btblomberg67 wrote:

    Thin clients may be fine for offices but in the real world the bandwidth and latency is definitely an issue. I remember back in college in the 80's programming over a terminal on campus. That was a different age of computing, but it was slow and cumbersome. I remember all this talk about thin clients back 1998 when the iMac came out and the concept of Net-boot was talked about. I have not heard much of it since. The nice thing about iPads are they can do a lot of things offline given the right App, like the iPhone. That is a perfect model for mobile computing. If you have a device the relies on the network or the server you end up with things like T-Mobile's danger phones that all died when MS botched up the server. Then on top of that you have wi-fi and wireless coverage limitations being an issue and the whole thin client falls apart. Maybe when when services are everywhere and are up 100% all the time this could happen, but that is a long ways off.

  • Report this Comment On July 24, 2010, at 10:52 PM, Henry3Dogg wrote:

    "AT&T citing an "encouraging" level of business interest for the iPad is hardly the information that strong investing decisions are made of."

    Neither are they based on ignoring that which is selling like hotcakes, and assuming the unbridled success of that which is just vapour.

  • Report this Comment On July 25, 2010, at 3:28 PM, demodave wrote:

    I see the Cisco networking angle to like Cisco in this article, but I see no reason not to like Apple's iPad for the device side, so I think the article falls short in that way. I also think the future potential of Apple's data center should be considered. That may be vaporware today, but there is a very real building that we can point to. I wonder if Apple will populate it with Mac Server blades. :)

  • Report this Comment On July 25, 2010, at 7:01 PM, xandros wrote:

    The one thing that has confused me about mac/apples iphone and now ipad....

    Remember some time back when microsoft got in a lot of trouble for bundling aol into windows? They didn't even force you to use aol. You were free to choose another carrier, they just made it easy to choose aol. (By the way I am not a fan of aol) However they got in a lot of trouble and were forced to bundle/offer other options. Now apple has devices that they actually FORCE you to use At&t. Not make it easier. Not offer other options. If you use the apple products you have to use their chosen carrier.

    Where is all the rage that microsoft got when they just provided an option?

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