Apple's iPhone Makes Corporate Push

Updated from Thursday, Mar. 6, 4:28 p.m. EST

Apple (AAPL Quote) presented its software roadmap Thursday for the development of third-party applications for the iPhone and iPod Touch, including the highly anticipated announcement of allowing its devices to work with Microsoft's (MSFT Quote) Exchange email.

Apple said that the iPhone will soon utilize Microsoft's ActiveSync, which will let the smartphone connect directly with Exchange servers, something corporate clients have been seeking.

The addition of Exchange support will enable the iPhone with push email, push calendar and contacts, enforced security policies and Cisco's (CSCO Quote) IPsec VPN. All of these features will be worked directly into the applications already in place on the iPhone and will be made available in June.

"That's a long list of important features enterprise customers want," Apple senior vice president Phil Schiller said during the presentation, according to Engadget.com. "I'm excited to be the one to tell you today, we're doing all these things in the next release of the iPhone software."

Following the announcement, shares of the Blackberry maker Research In Motion dropped almost 3% to $98.74. Analysts expect that Exchange support on the iPhone will allow Apple to cut into RIM's market share in the smartphone arena. Shares of Apple were lately down $1.86, or 1.5%, to $122.62.

According to Apple, employees at Nike (NKE Quote) and Disney (DIS Quote) have been previewing the corporate features of ActiveSync on the iPhone.

"We believe that the iPhone is a great phone for all parts of the market, including enterprise," Peter Oppenheimer, Apple's CFO, said Wednesday during a Morgan Stanley conference. "Our objective is to drive scale and take market share. We will enter Asia, and we are very confident we will reach our target of 10 million [iPhone sales] by the end of 2008."

Apple also unveiled its software development kit, or SDK, for introducing new third-party applications on the iPhone. Electronic Arts (ERTS Quote), Salesforce.com (CRM Quote) and Sega all showed off early incarnations of applications that may find their way to the iPhone. Also, Time Warner's (TWX Quote) America Online unit gave a sneak peak at a mobile instant messaging client for the iPhone.

Third-party software developers, whether individual programmers or large companies such as EA, will need approval of their applications from Apple as an extra measure of security for iPhone owners. Users will be able to download games and programs to their phone using a new mobile iTunes application store. Apple said it will keep 30% of all revenue generated from sales of applications and games.

"If you look closely at Apple's behavior, they're just as focused on locking customers into their own proprietary platform and who they let into that community," says Charles King, principal analyst with Pund-IT, an information technology industry analysis firm. "While they have product superiority, they can play any game they want to with the iPhone."

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