iPhone Is Not Competing With Blackberry (Yet)

I presented at an internal conference for the interactive division of a major media company this week, and among all the conference attendees, I didn’t see a single iPhone. Not one. It was wall-to-wall Blackberries, including many Blackberry 8830s, which have only been out for a month, so it’s not that they aren’t buying the latest devices. And this wasn’t a group of old school execs — these were tech savvy digital media professionals. Yet nobody had run out to buy an iPhone.

It makes perfect sense, though. They are all on an enterprise Blackberry server, and the iPhone clearly didn’t provide enough incentive for them to go off the corporate grid.

But I don’t think this a failing on the part of Apple or iPhone. The first generation iPhone is not intended to compete with the Blackberry. It’s intended for early adopters, Apple fans, and independent creative and tech professionals, i.e. Apple’s core users. Apple has already show that this group is capable of buying A LOT of iPhones — and they are willing to pay A LOT. And as for the AT&T network, this group would have bought an iPhone even if it only worked by connecting with a piece of string.

By not focusing on business users, Apple was able to focus on developing iPhone’s core innovations, e.g. full touch screen, full web browser. But that doesn’t mean that Apple has no interest in the business market (or in the market of price sensitive consumers). I would guess that future generations of will be designed with more business appeal — the big challenge will be breaking the lock that Blackberry enterprise servers have on business users. The first step is probably to woo business Treo users.

A few notes on my favorite topic of iPhone’s network limitations. First, I realized on this trip what a deal breaker it is not being able to use the iPhone as a tethered modem. At the conference, the hotel’s WiFi was locked behind an overpriced pay wall, so I just used my Blackberry as a modem through Parallels — which was nice and zippy on Verizon’s EVDO network. At the Atlanta airport, I discovered that WiFi is only available through individual providers for $8 and up, so again I used my Blackberry.

The notion that iPhone can simply “hop” onto WiFi to escape the slow AT&T data network is tempered by the reality that doing so means taking out your credit card more often than not — a raw deal if you’re already paying for Internet access through your wireless carrier. (I’m writing this in Panera Bread rather than the Starbucks down the block because Panera has free WiFi.)

That concludes this week’s iPhone reality check.