Apple’s Next Bite: The Enterprise Market

Apple’s (Nasdaq: AAPL  ) has been hitting it out of the park with sales of its iPhones, Macs, and now iPads, but the weight of the company’s presence is still heaviest in the consumer market.  Just look at your mall to see which store is packed, or ask your favorite teen or tween what they want for Christmas.  The answers to both are likely to be Apple.      

Meanwhile sales to the enterprise market continue to be dominated by the likes of Research In Motion (Nasdaq: RIMM  ) , Hewlett Packard (NYSE: HPQ  ) , and Microsoft (Nasdaq: MSFT  ) .  But that could be changing.   Will enterprise sales be Apple’s next multi-billion dollar opportunity instead of another new gadget?

Signs of enterprise interest
During Apple’s earnings conference call, executives reported that enterprise CIOs (Chief Information Officers) are increasingly adding iPhone and iPads to their approved device lists, which determine the products a company’s systems and IT staffs will support.  Fortune 100 companies are also piloting or deploying iPhone and iPad products at very high rates -- 85% and 67% respectively.  Also benefiting Apple, more businesses are allowing employees to make their own PC and smartphone choices.

Apple is hiring
Apple isn’t ignoring the enterprise opportunity either, indicating that it is expanding its enterprise sales teams and is working to ensure more enterprise features are built into each new version of its operating system.

A little help from old friends
Apple’s enterprise ambitions are also being helped by a competitor, Microsoft.  The latest version of the company’s Office productivity suite for Macs includes a full featured version of Outlook that does not require additional emulation software to run.  An email, calendar, and contacts application, Outlook is essential to survival in many companies.  During Apple’s earnings conference call, Steve Jobs had a lot to say about competitors, Google (Nasdaq: GOOG  ) and Research In Motion, but he forgot about Microsoft.  He should say "thank you" to that other Steve, Steve Ballmer.

If Apple is invading your company’s IT department, let us know about it in the comments.  And for more on technology stocks, click here to get The Motley Fool’s free report, The Only Stock You Need To Profit From the NEW Technology Revolution

Fool contributor, April Taylor, owns shares of Apple and Google.   Google and Microsoft are Motley Fool Inside Value picks. Google is a Motley Fool Rule Breakers choice. Apple is a Motley Fool Stock Advisor selection. Motley Fool Options has recommended a diagonal call position on Microsoft. The Fool owns shares of Apple, Google, and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


Read/Post Comments (7) | Recommend This Article (19)

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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On October 22, 2010, at 10:08 PM, asicsd wrote:

    Our company is getting ready to purchase close to 800 ipad's for our employees who are out in the field constantly. Great product..

  • Report this Comment On October 22, 2010, at 11:59 PM, techy46 wrote:

    MS, Oracle, SAP and 3rd party ERPs own the enterprise application, desktop and server worlds. Apple has coexisted in desktop publishing esp. graphical designers, etc. Casual desktop and road warriors embrace lighter duty netbooks, smartphones, tablets, etc. Apple has exploited MS mistakes in entertainment/mobile platforms but but watch out given W7 and WP7 successes - they have unlimited resources to now refocus on extending servers to mobile users.

  • Report this Comment On October 23, 2010, at 10:33 AM, Henry3Dogg wrote:

    @techy46

    MS do indeed have vast resources, as do Apple.

    But MS have a vast body of senile code to maintain, which is why the achieve so little with those vast resources.

    Until Microsoft stop thinking about themselves, and start thinking about their users, then Apple have nothing to worry about.

    The most common computer O.S. is Windows XP. But there is no more support for the XP user to migrate to Windows 7, than there is for her to migrate to MacOS.

    Think about that.

    Is it that those unlimited resources couldn't provide a migration mechanism. Or is it because they think that they own the users, that they have nowhere else to go, and that they will pay extra to migrate via Vista.

    Looks to me like Apple will be benefitting from MS's mistakes for years to come.

  • Report this Comment On October 23, 2010, at 8:42 PM, hemhog wrote:

    Apple will not create the large and costly support mechanisms required to support Mac desktops in the enterprise.

    The enterprise will have to reach the point where it is convinced that it is worthwhile to make the extra effort to deploy Macs.

    That may or may not ever happen, despite the lower total cost of ownership of Macs.

  • Report this Comment On October 24, 2010, at 11:33 AM, deemery wrote:

    I, for one, do not find MS Office to be "essential" on the Mac. The MS Office formats have become, unfortunately, de-facto standards and other applications can read/write these formats. Microsoft support for the ISO standards that they muscled/bought has been weak at best. The problem I have with email is mis-configured Exchange servers that send me Microsoft proprietary attachments, and that's something that users can change (but MS doesn't make it easy.) The only reason I went to Office '08 is that I got a good deal on it, I see no compelling reason to move to Office '11. As far as interoperability goes, I've had OpenOffice/NeoOffice and Keynote open Office Windows documents that crashed Office Mac.

    The real reason MS products are "essential" is that IT departments refuse to consider the alternatives. They forget theirs is a 'service' operation, and believe that the rest of us should suffer to make their jobs easier.

  • Report this Comment On October 25, 2010, at 2:17 AM, techy46 wrote:

    @Henry3Dogg - I believe MS has shipped >275 million copies of W7 so somebody must like their products. They're mostly capitalists not socialists and don't expect a free lunch. MS owns 95% of the desktop and server markets. MS will spend over $9billion this year on R&D for business (Azure, Office 10, etc.) and personal productivity markets (WP7). MS stockholders are upset that MS spends that much on R&D. Apple has benefited from MS mistakes (WM5) and MS will benefit from Apple innovations (iToys). That's how capitalism works. MS is a better investment for me at $25/s than APPL is for $300/s. Fortunately you can buy whatever you want.

  • Report this Comment On December 21, 2010, at 5:21 PM, skipper09 wrote:

    Henry3Dogg stated "MS has shipped >275 copies of W7 so somebody must like their products."

    Not so if they are like me; I bought Windows 7 only because my Windows Vista was pure junk.

    10 years ago I never dreamed I'd own AAPL, let alone that it would constitute 50% of my taxable account. I like it so much I am under diversified. I just can't get myself to sell it.

    Spoken by a former Windows programmer.

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