Why Enterprise Apps Are So Important to Apple's Strategy

Tim Cook called the enterprise one of Apple's key markets. Here's why.

Apr 26, 2014 at 12:30PM
Cook Laser

This story originally written by Ryan Faas at CITEworld. Sign up for our free newsletter here.

The first headline story from Apple's (NASDAQ:AAPL) quarterly earnings is the decline in iPad sales compared to a year ago, which CEO Tim Cook described as being related, at least in part, to changes in Apple's inventory channel. Cook also pointed out that the iPad's has grown faster than any other product in Apple's history and that the company has sold twice as many iPads since launch as it had iPhones and seven times as many iPods as it had at a comparable points following introduction. There is, however, a growing perception that iPad growth could continue to stall because iPad replacement cycles are more like those of PCs, which users typically replace after three or more years, than smartphones that tend to be replaced every two years.

The second major story is the better than expected iPhone sales numbers and gains in a variety of markets around the world including the so-called BRIC countries (Brazil, Russia, India, and China) and other emerging markets. Apple noted that this growth demonstrates the company's ability to compete at both the entry-level and high-end portions of the smartphone market.

While not broken out as a specific portion of the call, a third important story is Apple's growing commitment to -- and perhaps dependence on -- the enterprise market as a driver of both iPad and iPhone growth. I first noted this trend following Apple's last earnings call in January. At various points Cook referred to enterprise and education (where Apple has a commanding 95% of the U.S. classroom market) as two of the company's key markets (consumer sales being the third).

During the previous call, Apple specifically highlighted key enterprise data points like FIPS certification for government use, the ability to create a team-focused app development server, and the incredible adoption of iOS 7 and its enterprise-focused features.

Today's call didn't include so many specific call-outs, but it did include several key points. 98% of Fortune 500 companies have deployed iOS devices and more than 90% of tablet activations in enterprise environments are iPads. Apple highlighted several companies that have made major investments in iOS devices and, more significantly, highlighted their commitment to the platform in the form of enterprise apps that each company has created for its workers:

  • Deutsche Bank has nearly 20,000 iPhones on its network, and dozens of enterprise apps.
  • Siemens has 30,000 iPhones on its network and over a dozen enterprise apps.
  • The U.S. Department of Veterans Affairs is deploying iPads to 11,000 health care providers and is developing a series of apps designed to provide quick and secure access to patient health information.
  • Pharmaceutical giant Eli Lilly has deployed thousands of iPads and has created more than for dozen apps for its employees.
  • FedEx pilots and maintenance crews rely on iPads to decrease operation expanses and provide easy access to the company's massive logistical operations.

Asked about Office for iPad, Cook acknowledged it was significant, but also said that it would've been better if Microsoft had shipped the suite earlier than its introduction last month.

Apple's success in getting companies to develop key mobile apps for iOS is significant because it means those companies are going to be far more likely to continue using iOS devices. Much as Apple's ecosystem of apps and content encourages existing users to replace their iPads or iPhones with newer models rather than switching to Android, a focus on enterprise iOS apps within a company is likely to drive further purchases both to expand the use of the devices as well as to replace aging devices, which was likely part of the "stickiness" that Cook mentioned during January's call.

More advice from The Motley Fool

If you thought the iPod, the iPhone, and the iPad were amazing, just wait until you see this. One hundred of Apple's top engineers are busy building one in a secret lab. And an ABI Research report predicts 485 million of them could be sold over the next decade. But you can invest in it right now... for just a fraction of the price of AAPL stock. Click here to get the full story in this eye-opening new report.

The Motley Fool recommends Apple and FedEx. The Motley Fool owns shares of Apple. 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.

Money to your ears - A great FREE investing resource for you

The best way to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as “binge-worthy finance.”

Feb 1, 2016 at 5:03PM

Whether we're in the midst of earnings season or riding out the market's lulls, you want to know the best strategies for your money.

And you'll want to go beyond the hype of screaming TV personalities, fear-mongering ads, and "analysis" from people who might have your email address ... but no track record of success.

In short, you want a voice of reason you can count on.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich," rated The Motley Fool as the #1 place online to get smarter about investing.

And one of the easiest, most enjoyable, most valuable ways to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as "binge-worthy finance."

Whether you make it part of your daily commute or you save up and listen to a handful of episodes for your 50-mile bike rides or long soaks in a bubble bath (or both!), the podcasts make sense of your money.

And unlike so many who want to make the subjects of personal finance and investing complicated and scary, our podcasts are clear, insightful, and (yes, it's true) fun.

Our free suite of podcasts

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. The show is also heard weekly on dozens of radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable. Rule Breaker Investing and Answers are timeless, so it's worth going back to and listening from the very start; the other three are focused more on today's events, so listen to the most recent first.

All are available for free at www.fool.com/podcasts.

If you're looking for a friendly voice ... with great advice on how to make the most of your money ... from a business with a lengthy track record of success ... in clear, compelling language ... I encourage you to give a listen to our free podcasts.

Head to www.fool.com/podcasts, give them a spin, and you can subscribe there (at iTunes, Stitcher, or our other partners) if you want to receive them regularly.

It's money to your ears.

 


Compare Brokers