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The Titan of Tablets: Apple or Cisco?

By Eric Bleeker - Updated Apr 6, 2017 at 12:33PM

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AT&T's conference call reveals interesting information on business users and the iPad.

Is the iPad a serious business tool? That's what AT&T (NYSE: T) is reporting. While the iPad has enjoyed phenomenal success, news of business adoption of the gadget could be its greatest coup yet.

Business love for iPhones, not surprising
On AT&T's conference call, CFO Rick Lindner had the following to say:

One thing that's been encouraging and a bit surprising so far is the level of interest from business customers. And when we first introduced the iPhone, the businesses -- and in particular CIOs at the -- of our business customers were reluctant, and they kind of pushed back on bringing the iPhone into their infrastructure. And over time that's -- as you know, has changed dramatically, and now we have businesses that are developing applications and putting their own applications and content down on the iPhone base within their companies.

AT&T boasting of iPhone acceptance shouldn't come as a surprise. In May, AT&T revealed that 40% of iPhone sales were to business users. While IT departments may have concern about security issues, the iPhone handles typical email functions well, and the gap between its functionality and a BlackBerry's isn't vast.

Business love for tablets, more surprising
Apple
's (Nasdaq: AAPL) encroachment into the tablet arena is a bit more surprising, however. The argument against the iPad as a tool for business users has always centered around its lack of a physical keyboard and support for more intensive productivity tools like Microsoft (Nasdaq: MSFT) Office.

However, AT&T indicates businesses have found unconventional ways to use the iPad. They're giving it to employees for specialized tasks where a lightweight device is optimal and developing custom applications.

Even with limitations, business users are finding ways to utilize tablets. In some ways, this validates Cisco's (Nasdaq: CSCO) recent foray into the field. The company could never reach the same level of easy usability as an iPad, but Cisco's Cius tablet has a much broader vision. Cisco's aim is to be much more than a business tablet -- it wants to replace your PC. Ultimately, the company wants to use virtualization software to make the Cius a "thin client," a window into the same PC environment business users ultimately demand. If AT&T's statements illustrate businesses opening up to the idea of tablets, Cisco could be the best positioned to strike at the market.

Winners and losers in the world of tablets
Microsoft shareholders would be deservedly misty-eyed if these tablet trends took. The company spent more than a decade developing tablet concepts, with little success to show for their efforts. In the end, pushing a full featured operating system at tablets has proven sub-optimal. Cisco's Cius could be successful because it uses Google's (Nasdaq: GOOG) Android as a base operating system, but could connect to remote PC's when users are at desks and can connect keyboards and mice for precision control.

On the winner side, desktop virtualization makers stand to gain. Both VMWare (NYSE: VMW) and Citrix (Nasdaq: CTXS) could see boosts from tablets acting as "thin clients."

AT&T citing an "encouraging" level of business interest for the iPad is hardly the information that strong investing decisions are made of. However, as more tablets roll out the door, pay close attention to whether Cisco's vision can gain traction. If tablet computing can make sense for business users, there are many companies other than Apple that stand to see huge gains.

Eric Bleeker owns shares of Cisco. Microsoft is a Motley Fool Inside Value selection. Google and Vmware are Motley Fool Rule Breakers recommendations. Apple is a Motley Fool Stock Advisor pick. Motley Fool Options has recommended a diagonal call position on Microsoft. The Fool owns shares of Google. Try any of our Foolish newsletters today, free for 30 days. The Motley Fool has a disclosure policy.

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Alphabet Inc.
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Apple Inc. Stock Quote
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AT&T Inc. Stock Quote
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Citrix Systems, Inc. Stock Quote
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VMware, Inc. Stock Quote
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