When Steve Jobs announced the original iPad, he emphasized its role as a consumption device. In fact, he purposely stayed away from even suggesting it could be used for productivity. However, he hedged his bet when he asked Apple’s Senior Vice President of Worldwide Marketing, Phil Schiller, to come out and briefly show off Pages, Keynote and Numbers for the iPad. The only other thing mentioned at the launch event relating to enterprise was Apple would provide some way for business users to obtain apps outside of the app store for use in dedicated business software distribution if needed. But after Schiller spoke, Jobs went right back to showing how the iPad was ideal for consuming content — showing off two games and one health related app created specifically for the event.
Jobs knew the iPad would be a big hit in the enterprise but understood that to focus on its role as a productivity tool instead of a content consumption device would have opened the iPad to serious criticism at the time. When the iPad was launched in 2010, tablets for the enterprise had been used in some vertical markets for at least ten years yet the industry had sold only one million tablets worldwide the year the iPad launched. But enterprise watchers were surprised when companies like SAP and Salesforce.com bought over 10,000 iPads each in its first six months on the market. We estimate in the first 12 months the iPad was shipping well over 1 million units that were tapped specifically for use in serious mainstream enterprise programs.
In its second year on the market, airlines, car makers, manufacturers and hundreds of companies we would classify as enterprise started buying iPads in large numbers and implementing them in their IT programs. Apple’s development tools were rich enough for most to be able to create their own apps for the iPad. At the same time, the iOS development community went into high gear and started creating all types of complimentary business apps that clearly took the iPad far beyond its role as a content consumption device.
However, there was one enterprise app almost all IT users wanted — Microsoft’s Office. While enterprise companies created their own apps, Apple’s own suite of productivity tools just did not meet the needs of many. Unfortunately, most enterprise users cut their productivity teeth on Office and could never get the hang of Pages, Numbers and Keynote. For a lot of IT users, the iPad was a great business tool but its lack of Office made it a wounded product for them. That is actually odd since Apple’s productivity tools are powerful but apparently you can’t teach old dogs new tricks. For many, Office spelled productivity regardless of what alternatives were available.
Now that Office is available on the iPad, it is clear the iPad has the missing link it needed to get even broader attention in the enterprise market. Ironically, the iPad is the #1 tablet in enterprise already. 98% of the Fortune 500 are using iPads and 91% of enterprise activations in IT are on the iPad. But I believe Microsoft’s stamp of approval of the iPad with Office kicks it up a notch for many IT users. Now it has the apps necessary for them to consider the iPad even more seriously as an IT tool.
While this is an important development, it is not the reason why Apple will make even stronger gains in the enterprise. I think it will be three distinct reasons that complement the Office availability on Apple’s iOS tablet platform.
The first is it is still the most secure OS tablet on the market. Android has a long way to go to fix its security problems. Until it does, its ability to gain ground in enterprise is questionable. While Win 8 tablets are pretty secure, it still has more security attacks than Apple has on iOS and that is a factor for a lot of IT buyers.
The second issue has to do with form factors. Apple’s iPad Air is still the thinnest and lightest on the market and to date I have not seen any Win 8 tablet that come even close to the iPad Air’s design. But lightness and thinness is not Apple’s only draw. The overall app and services Apple offers for all users is still superior to what is available on Android and Windows 8. In the Windows case, the lack of apps hobbles its acceptance in a lot of markets.
Finally, the real reason I believe Apple will own the enterprise is Apple has to respond to a growing trend for demand in hybrids and convertibles in the enterprise. The versatility of these designs speaks for themselves. While Microsoft’s Surface has not been a big seller in IT so far, companies like HP, Dell and especially Lenovo are making serious inroads into IT via the hybrids and convertibles they offer their customers. Apple can’t sit back and just let the competition gain ground in enterprise without doing something competitive and to tilt this trend towards the iPad as much as possible.
In the past, Tim Cook has said Apple is not interested in hybrids. The problem is his customers are. I saw some research recently that said the attach rate of keyboards to iPads in enterprise is almost 30%. I’ve been one of those users from the beginning. Although I have gone through a few Bluetooth keyboards over time, I now use the Zagg Folio Keyboard with backlit keys. It pops into a shell and fits the iPad so well it looks like a small clamshell laptop. In fact, I have been in many meetings where people asked me what laptop I was using. The iPad with a keyboard has been a powerful productivity tool for me from its early days and Apple has clearly tracked this trend with interest.
So how would Apple respond to this challenge? At the very least they could take a strong stand about the iPad in enterprise and start showing it off in IT settings with third party keyboards doing heavy lifting tasks in various enterprise settings. To date, Apple has had no ads for the iPad taking direct aim at its use in business. However, I think Apple has an opportunity to innovate and create something unique. If you look at Apple’s history, you know they did not invent the portable music player. They re-invented it. They did not invent the smartphone. They re-invented it. And they did not invent the tablet. They just reinvented it with the iPad.
I think they are going to re-invent the enterprise computing device with some type of sleek, thin combination that puts what is already on the market to shame and brand this as the ultimate business productivity tool. I’m not sure if it would be a MacBook Air class of device or an iPad/keyboard combo but Apple has the design skills, software and ecosystem to do something really new at these technology levels. Personally, I would like a thinner Macbook Air with detachable keyboard that can dock to a large monitor that runs iOS and Mac OS X but that may be asking too much. I believe if Apple innovates around something like this, it could cement Apple’s role in business productivity and insure their devices dominate this market even with Microsoft and Android nipping at their heels.