The iPhone Doesn't Ring With Business

SAN FRANCISCO -- Consumers may salivate for the new 3G iPhone from Apple(AAPL) but the phone remains a tough sell in the corporate world.

Despite Apple's attempts to tout the 3G iPhone's business friendly credentials at its Worldwide Developer Conference, the phone lags behind its rivals such as BlackBerry maker Research In Motion(RIMM) and Microsoft's(MSFT) Windows Mobile platform in features that are critical to businesses, some industry experts say.

They say RIM's BlackBerry and Windows Mobile offer better security and device management capabilities, making it a better fit for businesses that need to contend with compliance related issues.

"The iPhone still has a way to go," says Julie Palen, chief executive officer of InterNoded, which helps companies manage their mobile devices. "It totally has the cool factor but the iPhone is really blind to the IT organization so it is difficult to manage and offers little control from the security aspect."

Apple CEO Steve Jobs is trying hard to ratchet up the iPhone's appeal to enterprises. During his keynote at the conference Monday, Jobs spent a fair chunk of time talking up the iPhone's suitability for business users. About 35% of the companies on the Fortune 500 list have tested the beta release of upcoming iPhone 2.0 software, he said.

The iPhone 2.0 software update will offer complete support not just for Apple's iWork office software package but also Microsoft Office, he said. The update will also add support for Microsoft Exchange, a market leader among businesses for email and Cisco(CSCO) Secure VPN connection security.