Apple, BlackBerry, and the Department of Defense

The good news for BlackBerry (NASDAQ: BBRY  ) is it remains the smartphone of choice for security-conscious government and corporate employers. The not-so-good news for BlackBerry shareholders is its stranglehold on the commercial market is loosening. Along with the growing bring-your-own-device (BYOD) to work trend, Samsung has recently been given the ultimate smartphone security stamp of approval, and Apple (NASDAQ: AAPL  ) is close to earning the same.

The latest rumors
According to a recent New York Times report, the Department of Defense, or DoD, is close -- within a couple of weeks kind of close -- to giving the thumbs-up for its employees to use Apple iPhones in the Pentagon and other security-conscious government agencies. Initially, opening the doors to Apple and Samsung smartphones by the DoD shouldn't have a major impact on BlackBerry; it's entrenched, largely because of its strong, legacy OS security features.

It's the staunch security requirements of the U.S. government, especially intelligence and defense department agencies, where the real opportunity for Apple and Samsung exist. There are repercussions of gaining the blessing of the U.S. government that will ripple through the corporate world, as well, changing the market BlackBerry once dominated.

Apple will learn if its iOS 6 makes the DoD (along with other government departments) grade in "early May," according to the NY Times report. Apple is expected to have a relatively easy time passing muster because, unlike Samsung phones running the open source Google Android OS, iOS 6 is a proprietary system, meaning that it's easier to secure, similar to BlackBerry's legacy OS. As far as BlackBerry's new BB10 OS, not surprisingly, that has also gained DoD approval recently.

Why it matters
If there isn't a mass government employee exodus from BlackBerry devices to iPhones or Galaxy phones after gaining U.S. security approval, what's the big deal? BYOD is the big deal. Using personal smartphones to increase worker's productivity isn't new; big and small companies alike are exploring the concept. But here's where things really get interesting for Apple and BlackBerry -- according to a recent Gartner study, 50% of employers will require their employees to furnish their own smartphone devices. Not just ask ... but require them to. The possibilities for Apple (and Samsung) in the workplace suddenly grow exponentially.

Now, add in a stamp of approval from some of the most security-conscious folks in the world, and both Apple and Samsung immediately address the overriding concern of the corporate mobile device market -- keeping data secure. If iOS 6 gets the thumbs-up from the DoD, that'll certainly be good enough for the corporate world. BlackBerry is the ideal example of how powerful a government security endorsement can be; it's a large part of the reason BlackBerry is seen as the commercial smartphone.

Going forward
Don't expect an immediate pop for Apple's iPhone sales to government and corporate clients. Nor should you be concerned about the near-term impact of Apple and Samsung gaining government security clearance on BlackBerry Q10 and Z10 sales; it's not likely to change the game out of the gate. But, as the Gartner study suggests, the next two or three years could see a significant shift in the smartphone market, and that's great in the long term for Apple fans starving for some good news. For BlackBerry, the commercial marketplace it once called its own is going to become awfully crowded.

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Read/Post Comments (10) | Recommend This Article (0)

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 May 04, 2013, at 12:39 AM, cbglobal wrote:

    Forget what version. Basically Apple's IOS is a 6 year old operating system that has never gotten US Govt approval despite 6 years of trying. It is not anything new. But BB10 is brand new and got approval immediately.

    So do not say it is easy; or you make Apple look like an idiots for six years of failure

    Samsung is using a third party overlay for security.

  • Report this Comment On May 04, 2013, at 7:01 AM, Arthur1111 wrote:

    The bottom line is that Apple and Samsung are going after BlackBerry's enterprise. On the other hand, BlackBerry is going after Apple's and Samsung's public customers by launching the touch screen Z10 phone.

    BlackBerry has great advantage in this case for 2 reasons:

    1- BlackBerry had 0% of the touch screen market before they launched the Z10. They are already selling millions of these phones, which means that they will gain market share in this segment.

    2- The enterprise is a small segment, and given the advantage BlackBerry has with the security, it is difficult to crack.

    We should not ignore the market share BlackBerry is gaining in the touch screen phones. It is far more significant than the enterprise segment, even if Apple and Samsung got government approval.

  • Report this Comment On May 04, 2013, at 7:02 AM, Oril wrote:

    This article is so lame it can only have been written by a fool.

    BYOD will never be an issue in government and military agencies. Non compliant devices would not only be banned in the workplace they would not even be tolerated for use.

    That leaves apple out in the cold, we are not talking about a democracy here.

  • Report this Comment On May 04, 2013, at 8:58 AM, CZZZZZZ wrote:

    Chinese hackers and malware producers around the world are looking forward to the adoption of android phones in the DoD...

  • Report this Comment On May 04, 2013, at 12:23 PM, misledbyfools wrote:

    Apple's market share is going down as others nibble away at its current share and take more of the new users every day. Apple is not going away anytime soon, but I will not pay for its overpriced shares. Apple will have a tough time leading any industry going forward. Offshore cash doesn't equal future success.

  • Report this Comment On May 04, 2013, at 4:22 PM, magnaman1969 wrote:

    You missed one big point.

    These devices are all routed through the most secure MDM system on the planet.

    Unless iOS and DROID phones are running through a BES 10 service (BlackBerry BES 10) they are still the same old security risk they currently are.

  • Report this Comment On May 04, 2013, at 4:26 PM, magnaman1969 wrote:

    The money will be made by BlackBerry in its BES10 MDM solution for government and enterprise.

    It runs iOS and Android as well as BlackBerry essentially making all these devices BlackBerry subscribers.

    Looks like the real loser is Windows phones.

  • Report this Comment On May 05, 2013, at 4:29 PM, Chippy55 wrote:

    So, the author has no stock in any of the mentioned companies, still writes like a desperate Blackberry shorter and the Fool discloses that they own Apple and Google, but who didn't know that. Ten bucks says the Fools all voted for Obama too, a hundred bucks says twice. Nonetheless, where's the link for Samsung's stock price, it's selling for 3 times Apple at $1,350 and the total volume last Friday was a thin 162 shares, with the after daily volume of 48, you read that right, 48 shares. And the stock's open, intraday, and close were all $1,350. Flat some might say.

    Seems to me the Fool might want to short the stock like all the other Liberal low information voters who are lashing out and blaming Mr. Bush, sorry I mean Blackberry, illogically for Apple's stock price which is way below the $1,111.11 target some analyst picked out of the air last September. Liberals like to tear down their opponents while completely overlooking their own candidates faults, and there's no reason they would do anything different concerning the stock market.

    Can't wait to see the Fool's headlines in September, "Boy were we wrong" but then I won't hold my breath.

  • Report this Comment On May 05, 2013, at 10:14 PM, BlackberryIsKing wrote:

    iOS is DOA. And anyone allowing Android phones in their business would be a fool to allow it secure access. Only BBRY is secure. Doesn't matter what is approved, this is the simple fact. No worries about BBRY losing its lead. It won't happne.

    Blackberry is KING.

    Apple is dying.

    Android is dying.

    Long BBRY.

  • Report this Comment On May 06, 2013, at 9:52 AM, cbglobal wrote:

    Note also that the BB Playbook is approved by the DOD and not the iPad. I remember a few years back the Air Force tried to buy iPads and it was later cancelled. The Apple biased press made a big deal out of the Air Force purchase, but never reported later that it was killed.

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