IT departments are finally starting to buy Apple's smartphone, says a Deutsche Bank report

Click to enlarge. Source: Deutsche Bank

"There is growing evidence that the iPhone is making inroads into the Enterprise," writes Deutsche Bank research analyst Chris Whitmore in a report to clients Monday.

According to his estimates, Apple (AAPL) by the end of the year will have shipped about 2 million iPhones into corporate accounts through various routes, including internal IT department purchases and formal reimbursement policies.

That would give Apple about a 7% share of the enterprise smartphone market this year, up from 2% in 2008.

IT departments were famously resistant to the iPhone when it was launched two years ago. That resistance has begun to melt, writes Whitmore, for several reasons:

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Both companies beat expectations last week, but only one of them was growing

Click to enlarge. Source: Company reports, Oct. 2009.

A year ago we ran a bar graph similar to the one at right. It showed that Apple (AAPL), despite the Mac's tiny market share compared with Microsoft (MSFT) Windows, was gaining on the software giant. The main reason: revenue pouring in from the iPhone but hidden as deferred earnings in Apple's balance sheet. (That chart is posted below the fold.)

Last week Apple and Microsoft once again reported quarterly earnings — and enjoyed nice pops on the stock market. But their growth rates turn out to be very different.

This quarter, deferred iPhone revenue isn't as big a deal for Apple as it was last year (non-GAAP earnings actually grew more slowly than GAAP; see here for why). Ironically, it was Microsoft that had to use deferred revenue from Windows 7 to show any growth at all. Otherwise, Microsoft's revenue for the third quarter was down 14% year over year and its earnings down 17%.

Apple's revenue, meanwhile, grew 25% and its income 46.6%.

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Company wants to make its Flash technology available everywhere — and that means penetrating mobile devices.

Flash is coming to most mobile phones - except the one that starts with "i." Image: Adobe

Flash is finally coming to your smartphone—and so is Adobe (ADBE). With today's launch of the newest version its software, Adobe Flash Player 10.1, the San Jose-based company is making an aggressive push to get its product onto any gadget that allows for web browsing–Blackberry devices, netbooks, increasingly even TVs.

Crucially, Adobe has signed on a number of key launch partners for the product including Google (GOOG) and Research in Motion (RIMM). By the first half of next year, consumers can expect Flash on nearly every smartphone operating system including Google’s Android, Nokia’s (NOK) Symbian, Palm’s (PALM) webOS and Microsoft’s (MSFT) Windows Mobile.

This is great for developers, who have long had to use different software to make their applications work on different devices. And it’s even better for consumers, for whom web browsing will get faster and more consistent regardless of the device. More

Source: Gartner August 2009

Sales of Nokia's (NOK) Symbian smartphones are drifting. Apple's (AAPL) iPhone is gaining on RIM's (RIMM) BlackBerry. Microsoft's (MSFT) Windows Mobile is still sinking. And the launch of the Palm (PALM) Pre barely made a ripple in the gobal smartphone market.

Those were the headlines from the smartphone portion of Gartner's 2009 Q2 mobile phone report, which saw smartphone sales grow 27% even as overall mobile phone sales, feeling recessionary pressure, fell 6%.

In this context, Apple was the clear winner. Its iPhone sales, as Gartner counts them, grew more than 500% year to year, and its market share, as we figure it, grew 375%. (See chart below the fold.)

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Healthcare professionals would seem a natural market for smartphones, especially if the Obama administration makes good its campaign promise to computerize U.S. health care records.

But which smartphone will doctors and nurses be using?

Software Advice, an Austin-based resource for software buyers, tried to answer that question last week. In what it admits was not a "super-scientific" survey, it e-mailed a questionnaire to 700 healthcare professionals and processed 71 replies. The results, released on Tuesday, show an interesting mix of preferences that vary according to job description.

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Owners of Apple (AAPL) iPhones who hold down jobs — as opposed, presumably, to those who go to school, are between jobs or live off the proceeds of their trust funds — are more than twice as likely to access the Internet from their phone as working Americans who own Research in Motion (RIMM) BlackBerries, Palm (PALM), or Microsoft (MSFT) Windows Mobile devices, according to a report issued Friday by Forrester Research.

Based on a mail survey of 61,033 Americans fielded in February and March 2008 — back when iPhones started at $499 (not $99) and had only been available for six months — the study found "a quantitative difference in what working iPhone owners do."

In particular, the authors found that:

• Working iPhone owners are more than twice as likely to use the mobile Internet. While only 9% of mobile phone owners and 38% of all working smartphone owners access the Internet from their phone at least weekly, a massive 78% of working iPhone owners do so.
• Mobile email and texting are much more common among working iPhone owners. Whereas one in two working smartphone owners sends mobile email at least weekly, more than three in four working iPhone owners do so. And 80% of working iPhone owners text weekly in contrast with 60% of working smartphone owners and 36% of  working mobile phone owners.
• Households that own iPhones spend more on mobile bills than the average mobile household. Working iPhone owners as a group spend $87 on their household mobile phone bills monthly, while all working smartphone households spend $76 and working mobile phone households spend $66 per month.
• Working iPhone owners are twice as likely as all mobile users to go online in public. In addition to home and work, the two most common places to go online, more than a third of working iPhone owners go online outside or in another public place. This is twice as many as all working mobile phone owners (17%) and nine percentage points higher than all working smartphone owners (26%).
• Fifty percent are more likely to read a blog weekly. Twenty-three percent of working iPhone owners read a blog at least weekly, whereas only 16% of working smartphone owners and 11% of working mobile owner owners do so. This blogging difference extends to maintaining a blog as well, where working iPhone owners are almost twice as likely to do so.
• A third are more likely to maintain a social networking profile weekly. Twenty-six percent of working iPhone owners maintain profiles on social networks, while only 19% of working smartphone owners and 14% of working mobile phone owners do.
• Twenty percent are more likely to use instant messaging weekly. Forty-four percent of working iPhone owners uses instant messaging at least weekly versus 37% of working smartphone owners and 24% of all working mobile phone owners.
• More working iPhone owners telecommute and access the network from home. Twenty-eight percent of working iPhone owners telecommute regularly, and 42% regularly access an employer’s network from a computer while at home. This is a greater percentage than is found among working smartphone owners, where only 20% telecommute regularly and 34% access an employer’s network regularly from home.
• Although more connected to work, fewer iPhone owners bring laptops home. Despite this greater tendency to telecommute and access an employer’s network from home, working iPhone owners are less likely to bring a work laptop home (36%) compared with all working smartphone owners (42%).

The full report is available here as a downloadable PDF for $749 — with a three-week money-back guarantee.

Below the fold: A sample graphic showing that iPhone owners are younger and richer than the general smartphone population.

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Apple (AAPL) and Research in Motion (RIMM) were the big winners in the first quarter of 2009, according to a report on the mobile phone industry issued by Gartner, Inc. on Wednesday.

Against a backdrop of weakening sales, smartphones — and in particular, touchscreen smartphones — were the exception.

According to Gartner, worldwide mobile phone sales totalled 269.1 million units in 2009 Q1, down 9.4% from 2008. But smartphone sales exceeded 36.4 million units, up 12.7% from the same period last year.

"Much of the smartphone growth during the first quarter of 2009 was driven by touchscreen products, both in midtier and high-end devices," said Roberta Cozza, principal analyst at Gartner. "'Touch for the sake of touch' was enough of a driver in the midtier space, but tighter integration with applications and services around music, mobile e-mail, and Internet browsing made the difference at the high end of the market."

Nokia (NOK) and "Others" — which apparently included Microsoft (MSFT) Windows Mobile — were the big losers in the smartphone market. RIM, however, grew its market share nearly 50% year over year, while Apple's share increased 109%.

See chart below.

Curiously, Gartner reports that Apple shipped 3.938 million iPhones in the first quarter of 2009, while Apple reported selling 3.79 million in the same period. The difference, according to an Apple spokesperson, is that Apple reports the number of iPhones it "shipped in" to its customers, while Gartner estimates "ship through," and includes the number of units it believes are sitting in inventory.

There were several $10,000 prizes at stake — as well as some free mobile phones — but at the end of the three-day Pwn2Own smartphone hacking contest at the big CamSecWest conference in Vancouver, British Columbia, which closed on Friday, none of the devices had been cracked.

The contest, sponsored by 3Com’s (COMS) TippingPoint computer security division, pitted some of the world's sharpest hackers and computer security experts against five smartphones: an Apple (AAPL) iPhone, a Research in Motion (RIMM) BlackBerry and phones running on Google’s (GOOG) Android, Microsoft’s (MSFT) Windows Mobile and Nokia’s (NOK) Symbian operating systems.

Although the rules were relaxed each day to make hacking easier, the phones managed to withstand the few attempts that were made to "pwn" them — Internet-gamer slang meaning to conquer or gain ownership.

The Web browsers were not so lucky. In a separate contest, now in its third year, the security barriers of Apple's Safari, Mozilla's Firefox and Microsoft's Internet Explorer were breached in the first day — Safari's in less than 10 seconds using an exploit prepared before the contest. The latest version of Microsoft's Web browser — IE8 — fell even before the browser's official release. Only Google's Chrome survived day one. See here.

It's not clear why the smartphones did so well and the browsers so badly. It may be that the devices are too new to have been studied closely. "There's a lot we don't know yet about them," Charlie Miller, the man who cracked Safari so quickly, told CNet's Elinor Mills (link). In fact, there were very few attempts made. Tipping Point's twitter feed mentioned only two: one against a BlackBerry and another against a Nokia phone running Symbian.

But there's no question that smartphones are vulnerable to attack. SearchSecurity.com reports that during one conference presentation a team from Core Security Technologies, a Boston-based penetration testing company, demonstrated how to crack into the iPhone, Google Android and Windows Mobile devices using something called a simulated stack overflow vulnerability.

According to Alfredo Ortega, one of the Core researchers, the iPhone had the most security features, making it the most difficult to crack. Windows Mobile, he said, was the easiest to defeat. (link)

When it’s not running contests, TippingPoint operates its ZeroDay Initiative, in which it pays computer security specialists — also known as “white hat hackers” — a bounty for previously undiscovered vulnerabilities in return for a promise not to exploit them.

TippingPoint, in turn, notifies the vendor and simultaneously develops a patch that it offers to its security clients. Once the vendor has developed its own patch, TippingPoint and the vendor coordinate public disclosure. The researcher can either be given credit for the discovery or, if he or she prefers, remain anonymous.

See also: White hat hackers target the iPhone

Below the fold: the rules of the contest as posted on the CamSecWest website here.

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Apple's (AAPL) iPhone was the fastest-growing smartphone of 2008, despite end-of-year sales that failed to maintain the blistering pace set in July with the launch of the iPhone 3G, Gartner researchers reported Wednesday.

"Apple's initial sell-through dropped significantly as sales fell during the fourth quarter," Gartner said. "Nevertheless, Apple maintained its third position in the global rankings."

Nokia (NOK) still dominates the worldwide smartphone market with a 43.7% share, but overall it was not a good year for the world's No. 1 manufacturer of mobile phones. Its smartphone sales were flat compared with 2007 and actually fell 16.8% year to year in the third quarter.

Research in Motion (RIMM), HTC and Samsung all grew their smartphone market share last year, but none as fast as Apple, whose sales increased 245%. See Gartner's table 2 below:

New products offering "compelling device experiences and touch interfaces" drove smartphone sales in 2008, according to Gartner research director Roberta Cozza — especially in calendar Q4. With no new iPhone to show in the December quarter, Apple's sales to end users fell 13.6%, to 4.08 million in Q4 from 4.72 million in Q3, as Gartner counts them. (Apple reported sales of 4.36 million iPhones and 6.89 million, respectively, in those quarters, but roughly 2 million iPhones built in Q3 ended up in inventory, according to Gartner, and therefore didn't count as sales to end-users.) Still, Apple's fourth quarter iPhone sales were up more than 111% year to year.

With two new BlackBerry models introduced in Q4, RIM's sales were up both year to year (84.9%) and quarter to quarter (28.3%). Samsung had a particularly strong quarter with sales up 138% year to year,  thanks in large part to its new touchscreen Omnia. See Gartner's Q4 2008 table below.

Below the fold: Gartner's tables for smartphone operating systems for the year 2008 and for Q4 2008.

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There's good and slightly less good news for Apple (AAPL) in a report issued by iSuppli on Wednesday.

Against a backdrop of slowing sales growth in the overall mobile handset market, the El Segundo, Calif.-based research firm sees a bright spot in smartphones.

The report offers two scenarios for 2009 and beyond. Its best-case forecast calls for global smartphone unit shipments of 192.3 million units in 2009, up 11.1% from 173.6 million in 2008.

Its more pessimistic outlook calls for growth of only 6% this year, or 183.9 million units.

“For  the optimistic scenario to come to fruition, wireless network operators must cut fees for data services and offer aggressive subsidies to reduce consumer smart phone prices,” said Tina Teng, an iSuppli senior analyst. “Furthermore, wireless operators and handset brands have to sell consumers on the value of smart phones to encourage customers to upgrade."

For the pessimistic scenario to prevail, consumer confidence — and spending — just has to keep going the way it's headed.

iSuppli defines a smartphone by its high-level operating system, and includes phones that run Apple's iPhone OS, Microsoft's (MSFT) Windows Mobile, Nokia's (NOK) Symbian, Research in Motion's (RIMM) BlackBerry OS, Google's (GOOG) Android, Palm (PALM) OS and other Linux-based systems.

By this definition, iSuppli estimates that smartphone sales in 2009 will account for somewhere between 17.4% (optimistic scenario) and 16.6% (pessimistic) of the total handset market.

And what determines which brands do best?

"Applications are everything," according to iSuppli. “Beyond the friendliness of user interfaces, the availability of a variety of applications is the key factor attracting consumer interest to smart phone products,” writes Teng. “Thus, different players at various segments of the supply-chain are starting to build mini-ecosystems—including applications—in order to attract consumers and gain their loyalty."

Teng notes that Microsoft’s launch of MyPhone, Nokia’s Ovi and the Android Marketplace each represents a different approach to building these ecosystems.

What she doesn't mention is that Apple, with more than 20,000 apps and an installed base of better than 17 million iPhones, has a big head start.

See also:

• Now everybody has an App Store
• A taxonomy of iPhone competitors