iPads for Bankers

We recently learned from two of the biggest distributors of technology devices that tablets are among the fastest-growing product lines both domestically and in Europe. Tech Data (Nasdaq: TECD  ) and Ingram-Micro (NYSE: IM  ) both pointed to strong demand throughout the entire technology space and the surprising strength of tablet sales, especially to corporations. Although Ingram-Micro CEO Greg Spierkel reported that much of the sales were to corporations with a large base of outside traveling salespeople, it looks as if the financial industry will also soon be a large source of customers.

News leaked this week that JPMorgan Chase (NYSE: JPM  ) will give all associates in its global investment-banking division Apple (Nasdaq: AAPL  ) iPads as part of a pilot program at the bank.  The program will allow JPMorgan Chase investment bankers to use applications made for the group. They'll also be used in client presentations, for e-mails, and for delivering other confidential information.

This news follows the recent release of the bank's iPad research application. The app is designed for JPMorgan Chase's institutional clients and will initially provide easy access to its research reports and analysis. The app will also provide updates on new reports and will allow clients to easily set up filters for the research they need on demand. As JPMorgan Chase continues to develop the app, it is expected to become a much more interactive tool with which analysts can chat with clients and provide additional real-time data.

Apple and the rest
When Tech Data and Ingram Micro reported that tablets made up one of the fastest-growing technology segments, they really meant the iPad. There really are only two viable tablets on the market, and Apple controls more than 90% of the space. The game of follow-the-leader in the tablet space will begin in earnest next year, as close to 50 tablets are expected to be released, including a new version of the iPad, as well as numerous tablets running on Google's Android operating system.

Although the proliferation of new tablet devices may cut into Apple's market share initially, I don't think the company is too concerned. However, I do believe the companies rushing to get these new devices to market are extremely worried, and the burgeoning fragmentation of the market beyond the iPad will only benefit Apple in the long run.

Hate to beat a dead horse, but …
The biggest loser of the growing enterprise use of the iPad is Research In Motion (Nasdaq: RIMM  ) . The company has long held a significant competitive advantage in the corporate-smartphone market because of its proprietary Enterprise Server that provides encryption and safety that other providers couldn't match. This type of data protection is especially important in the financial industry, and it's the reason Wall Street financial companies have been hesitant to cut ties with their BlackBerries.

However, as Apple's technology now provides a more viable alternative, the JPMorgan Chase experiment may just be the beginning of a much larger trend. Morgan Stanley and Credit Suisse have recently released iPhone and iPad applications for its clients, and more banks are expected to follow. As more and more financial services and other banking capabilities become intertwined with the iPad and iPhone through Apple applications, it only makes sense for these institutions to begin the transition.

In the end, RIM's inability to get its PlayBook tablet into users' hands until well after the iPad established itself could come back to haunt the company.

A changing business landscape
Companies with strong enterprise businesses such as Research In Motion, and even traditional PC makers such as Hewlett-Packard and Dell, for a long time weren't seriously threatened by Apple in this space. However, with the iPad, it looks as though Apple has found a way to quietly infiltrate the enterprise segment, which is something that probably won't bode real well for these companies.

The tablet is still just a small piece of the larger cloud-computing theme that's gaining rapid momentum in the corporate world, but for Apple it's a small piece that could lead to a much bigger chunk of the overall business. The news of JPMorgan Chase's iPad app and employee usage may seem small now, but it makes the future potential for Apple in the enterprise space much larger.

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Fool contributor Andrew Bond owns no shares in the companies listed. Apple is a Motley Fool Stock Advisor pick. Google is a recommendation of Motley Fool Inside Value and Motley Fool Rule Breakers. The Fool owns shares of Apple and Google. Follow Andrew on Twitter at @Bond0 or on his RSS feed. Try any of our Foolish newsletter services free for 30 days. The Fool has a disclosure policy.


Read/Post Comments (5) | Recommend This Article (6)

Comments from our Foolish Readers

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 December 05, 2010, at 6:20 PM, MrZ2357 wrote:

    Andrew,

    I fail to see anything original in this article.

    Its cut and paste from other sources all over the place.

    If you really want to make a stand out contribution, why not analyze the actual statistics post torch (or lack thereof) that support the notion that rimm is losing market share, rather than relying on hear say such as some companies are "looking" at i-pad etc.

    I think you will find that at this point there are no real statistics that support this assertion.

    That is the real story.

  • Report this Comment On December 05, 2010, at 10:19 PM, ConstableOdo wrote:

    Why would businesses want the RIM PlayBook when many companies are already getting rid of BlackBerries because they're so outdated? RIM will likely be bought out by Microsoft when WP7 fails to catch on as a mobile platform. Even the companies that try to use the PlayBook will probably dump it as soon as the iPad 2 is released. RIM is still building last year's smartphones, so they'll probably be building last year's tablet, too.

  • Report this Comment On December 06, 2010, at 1:17 AM, sdchargers wrote:

    If this is true I will be heading to Chase to close my accounts, I don't want to put my information in the hands of unsecured company.

  • Report this Comment On December 06, 2010, at 2:42 AM, dicklacara wrote:

    Those of you concerned about security should read:

    http://images.apple.com/ipad/business/docs/iPad_Security.pdf

    http://www.computerworld.com/s/article/9189321/RIM_s_PlayBoo...

    http://www.zdnet.com/blog/btl/forrester-apples-iphone-ipad-s...

    AFAICT, the PlayBook has none of the RIM security features -- relying instead on the security provided by a Blackberry phone when tethered with a PlayBook.

    What happens when the tether is broken (not closed normally) and confidential data is still on the PlayBook?

    How do you remote wipe a PlayBook if you can't tether with it) lost or stolen)"

    It seems rather silly that the PlayBook is only useful for secure data while actively tethered to a Blackberry -- the PlayBook functions as a large(r) screen accessory to a Blackberry phone and istotally unusable as a secure standalone device.

  • Report this Comment On December 06, 2010, at 10:32 PM, teebeecan wrote:

    I think you have hit on the beginning of a big cycl for the ipad. Just recently the Sask. Gov't has equipped all of its cabinet members with ipads. And I just found out that Nettwerk Productions in Vancouver (in the entertainment/management business) has purchased a bunch of ipads for its staff

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