When Apple (NASDAQ:AAPL) CEO Tim Cook emphasized the importance of the enterprise market in the company's future in its third-quarter earnings call earlier this month, investors listened closely. After all, Apple had just landed a massive deal with IBM, which arguably has more inroads into the world's biggest businesses than any other company. When Ford earlier this week ditched BlackBerry smartphones for the iPhone, it was another stark reminder that Apple is a force to be reckoned with in the enterprise market.
Ford ditches Blackberry, adopts iPhones
You can bet BlackBerry wasn't happy to learn that Ford plans to transition its corporate employees from BlackBerry devices to iPhones. The company's revenue has been in decline for about five straight years, and Apple is largely to blame.
Ford spokeswoman Sara Tatchio said Ford intends to get iPhones for over 9,000 corporate employees in the next two years, Bloomberg reported More than one-third of these workers will get them by the end of 2014.
"We are going to get everyone on iPhones," Tatchio said. "It meets the overall needs of the employees because it is able to serve both our business needs in a secure way and the needs we have in our personal lives with a single device."
BlackBerry spokesman Adam Emery seemed to be venting when he told Bloomberg by email, "Enterprises should think twice about relying on any solution built on the foundation of a consumer technology that lacks the proven security benefits that BlackBerry has always delivered."
Is it possible that Emery didn't read Apple's press release that announced the details of the new Apple-IBM partnership? Security is one of several of the key elements emphasized in the new Apple and IBM partnership. And Ford, of course, is a major IBM client. Not to mention that Apple is introducing new security, productivity, and device management features catered to enterprise in iOS 8 this fall.
Apple wants to dominate enterprise
Apple's drive for dominance in enterprise was clearer than ever when the company said it would partner with IBM to "transform enterprise mobility." Through the new partnership, Apple will develop "a new class of more than 100 industry-specific enterprise solutions including native apps, developed exclusively from the ground up, for iPhone and iPad," according to Apple's press release announcing the partnership.
With the new partnership, IBM will even facilitate sales of the iPhone. Talk about a powerful distribution channel for sales of iOS devices. Perhaps Ford is the first of a handful of IBM clients that will soon transition to take advantage of the integrated duo.
Apple is no stranger to the enterprise market. Cook noted in the company's most recent earnings call that the iPad is the standard for teams across the airline industry. Qantas alone has over 15,000 iPads deployed to pilots and cabin employees. Apple's iPads have also been adopted for business in some form by 99% of the Fortune 500 companies and 93% of the Global 500.
Going forward, Cook called enterprise "a large market opportunity for Apple." The CEO said that penetration in business in the U.S. for iPads is just 20%, leaving plenty of room for more upside. And, thanks to the strength of Apple's ecosystem, iPad sales often lead to iPhone sales, and vice versa. The more Apple products a company adopts, the higher the switching costs to move away from that ecosystem.
With IBM and Apple now working together, the tech giant seems set on doing whatever it takes to capitalize on this growth opportunity in enterprise.
Daniel Sparks owns shares of Apple. The Motley Fool recommends Apple. 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.
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