Apple's Enterprise Assault

While many investors focus on the smartphone and tablet consumer markets, one sometimes overlooked front in the mobile device war is in the enterprise, or corporate, segment. And it's in this important area that Apple  (NASDAQ: AAPL  ) is excelling above the competition. The tech titan noted in its most recent conference call that research firm Good Technologies found that among its corporate clients, the iPhone 5 was by far the most frequently activated device of any kind, and iPads represented 88% of all tablet activations.

In regard to the iPhone, Apple CFO Peter Oppenheimer had this to say during a recent conference call:

iPhone also continues to be the smartphone of choice for business. Given the security and stability of iOS, enterprise and government customers around the world continue to deploy iPhone on their networks in ways that go far beyond personal productivity. Companies have built tens of thousands of custom apps to improve every aspect of their business. Global companies, including American Airlines, Cisco, General Electric, Roche, and SAP, have deployed more than 25,000 iPhones each across their organizations. U.S. government organizations, such as NASA's Jet Propulsion Lab, the National Oceanic Atmospheric Administration, the ATF, and the National Geospatial-Intelligence Agency, are supporting and managing thousands of iPhones on their networks, and continue to create both customer-facing and internal iOS apps. And just this past quarter, iOS 6 was granted FIPS 140-2 validation by the U.S. federal government and approval by the U.S. Department of Defense to connect to their networks. Combining sales to business, government, and education customers, iPhone holds a 62.5% share of the U.S. commercial market, based on the latest quarterly data published by IDC.

In the enterprise smartphone segment, former leader BlackBerry (NASDAQ: BBRY  ) has seen its market share plummet. BlackBerry dominated the corporate market for years thanks to a reputation built on security and the reliability of its network. But in recent years the bring-your-own-device trend has led many corporations to support multiple devices and operating systems, which has benefited Apple and Google  (NASDAQ: GOOGL  ) as the popular iPhone and Android-powered devices quickly stole share from the less consumer-focused BlackBerry. But while Android currently holds the top spot in overall smartphone OS market share, Apple's reputation for security has led to more wins among corporate buyers. With BlackBerry's global smartphone market share now estimated at a minuscule 3%, it appears that this will be a race between Apple and Google -- a disturbing thought for BlackBerry investors and one that has led to a devastating loss in value for the once high-flying company:

Microsoft  (NASDAQ: MSFT  ) has risen to the No. 3 spot ahead of BlackBerry, but with its small share of the overall market, Microsoft probably won't benefit from the BYOD trend to the same extent as Apple and Google. Still, Microsoft is a competitor not to be taken lightly, and it could present a threat to Apple and Google should Windows 8 help to accelerate the adoption of Microsoft-powered smartphones.

Another area where Microsoft poses a threat is in the enterprise tablet space. Its Surface Pro device runs full versions of Windows and Office applications, which are dominant among corporate workers. But if the sales of the struggling Surface RT tablet are any indication, Microsoft may also have a tough road ahead in the tablet market. Microsoft recently took a $900 million charge related to slashing the price of the Surface RT – a less expensive tablet that doesn't run many MS applications – that led to fourth-quarter results that came in well below Wall Street's revenue and earnings projections.

"I want to be very clear," new Microsoft CFO Amy Hood said in the conference call. "We know we have to do better, particularly on mobile devices." Judging by the performance of Microsoft's stock since its earnings report, investors seem to agree.

The Foolish bottom line
Apple's ability to maintain its lead in the enterprise mobile device market will be a key determinant of the company's long-term success. But will Apple be able to fend off Google's Android assault? Will Microsoft rebound from its missteps and begin to take share in this vital market?

To help you decide the answers to these questions, check out "Who Will Win the War Between the 5 Biggest Tech Stocks?" The Motley Fool's latest free report details the knock-down, drag-out battle being waged among the five kings of tech. Click here to keep reading.

Editor's note: A previous version of this article incorrectly attributed the quote to CEO Tim Cook. The Fool regrets the error.


Read/Post Comments (8) | Recommend This Article (12)

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 July 28, 2013, at 10:38 PM, BR14 wrote:

    No doubt Apple is selling into corporations in the US. You could hardly expect otherwise given Apples marketing clout.

    But the TCO for iPhones is way in excess of BlackBerry, and security is underwhelming.

    There is still only one real secure choice for enterprise and that's BlackBerry.

    Good Technologies is not a "research company" but rather an MDM competitor for BlackBerry that is desperate that BlackBerry fail before the shortcomings of it's rather poor imitation of BES 10 are exposed.

  • Report this Comment On July 28, 2013, at 10:48 PM, i7up2001 wrote:

    Maybe some corporation and government will re-think their position on Apple security.As we saw on July 18th Apple own developer network was shut down,and still partly short down after hacker infiltrated the site and stole personal information.

  • Report this Comment On July 28, 2013, at 10:57 PM, i7up2001 wrote:

    Make you wonder, why this article forgets to mention that Apple was not even able to prevent being hack them self, And go on telling that enterprise should choose them ??? I wonder if government agency and large corporation would like to have their network shut down like Apple DEV for more than a week?

  • Report this Comment On July 28, 2013, at 11:23 PM, crashandburn45 wrote:

    @frankcout. No one is immune to hacking nowadays including Apple. We have seen vulnerabilities on Android as well. Apple shut down the site after a security researcher notified them of a vulnerability. It was not done with malicious intent.

  • Report this Comment On July 28, 2013, at 11:37 PM, kevins71 wrote:

    Bottom line is this. RIM or Blackberry is dead, nobody wants that antiquated relic any more. The OS is a joke now and the hardware laughable, kind of like how Android is.

    Android has "zero" security measure put in place, because of the amount of phones made by every manufacturer known to man, all running different versions of the same OS and no one is really up to date on the current Android OS except for 3% of the user base. No legitimate IT Department will support or issue these things corporate wide.

    Then you thrown in the fact Android has "zero" MS Exchange support built-in and "zero" management tools for the IT Department for issuing phones to employees, no remote wipe in case of lost or stolen phones and no "find my phone" feature that built-in.

    You would be a complete moron to use Android in ANY corporate setting due to it's fragmentation and hysterically laughable security.

  • Report this Comment On July 29, 2013, at 12:40 PM, CluckChicken wrote:

    Yes all of these systems can be hacked and have been. The question really isn't so much how secure the OS is it is how quickly will the hole is fixed by the vendor. Apple historically has been very slow at patching their holes, traditionally their first response is to blame the person that points out the hole.

  • Report this Comment On July 30, 2013, at 7:34 AM, CraigWPowell wrote:

    AAPL share price tells the Apple story.

    I sold AAPL@635 per this signal:

    //iknowfirst/Apple-stock-forecast-12-months-predictions

  • Report this Comment On July 30, 2013, at 7:35 AM, CraigWPowell wrote:

    AAPL share price tells the Apple story.

    I sold AAPL@635 per this signal:

    /Apple-stock-forecast-12-months-predictions

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