The iPhone Halo Effect

The surprising findings come in a report Forrester Research released today. The long-winded title: "Corporate Desktop Operating System Trends, Q4 2007 Through Q2 2008: Windows Vista Deployments Are Finally Ramping Up, While Mac Continues Its Slow March on the Enterprise." The analyst firm monthly surveyed more than 50,000 enterprise end users from 2,500 organizations to compile the operating system trends.

"Mac continues its slow gain among Forrester's clients, even without an enterprise strategy. Apple's singular focus on user experience has resulted in some success in the enterprise—without even trying to break into the market," writes report author Benjamin Gray. How much success? Mac usage jumped from 1.1 percent in October 2006 to 3.6 percent a year later and to 4.5 percent in June 2007.

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The install base continued its quick move from PowerPC to Intel-based Macs. PowerPC accounted for more than one-third of enterprise Macs in October. By June, about four-fifths were Intel-based Macs.

Apple's enterprise usage gains are impressive, considering that Mac adoption was until recently stagnant for years. Still, for all Mac's gains, Windows PCs hugely dominate the business market. Windows enterprise market share was 94.9 percent in June, with Vista showing slow gains, according to Forrester. Vista usage edged up from 5 percent in Oct. 2007 to only 8.8 percent in June.

As Benjamin observes, Mac's enterprise gains come without major marketing support from Apple. "The Mac has a small slice of the enterprise user market but is steadily building market share," he writes.

With no marketing cover, enterprises form their own opinions about Macs—or Windows resellers do it for them. The perceptions are mostly negative.

"Enterprises often see Macs as expensive solutions that add unwanted variety to an already complex IT management and support operation, while providing little in additional productivity," Benjamin writes. "Apple's control over the availability of systems, parts, upgrades and service also hinders larger enterprise uptake."

Apple's control manifests more for products still under Apple Care warranty. Replacement parts must be obtained through Apple's distribution channel and they must be returned to the company. So if a hard drive fails under warranty, Apple supplies a new disk and the other is returned.

Benjamin identifies three factors that will drive enterprise Mac adoption, with the iPhone being among them. He writes:

Desktop operations professionals now realize that:

1. Emerging client virtualization solutions shift the focus from standardized hardware to more secure and manageable PC architectures and operations.

2. The success of the iPhone is driving many to improve the end-to-end experience with Macs.

3. Tech Populism drives younger, more tech-savvy workers to buy whatever tools they need, to work smarter, faster, and cheaper.

Benjamin didn't further emphasize the iPhone's importance, but I will by connecting the elements of his report. First, a question: If Apple isn't doing much large business marketing and enterprises have negative cost and management perceptions about Macs, how then is adoption increasing?

Benjamin explains: "Strong iPod branding and sales have led to greater consumer sales of Apple PCs; in turn, this has lured enthusiasts and small workgroups with supple IT departments beyond the standard domain of design and media."

Whoa, the iPod's halo is so big it even touches enterprises. The iPhone's halo could be much larger. Enterprises would have practical reasons for deploying iPhones, and Apple's Exchange support removes one of the biggest logistical hurdles.

Forrester's next desktop operating system report should reveal whether or not there is some kind of iPhone halo effect. The most recent data was collected in June, or about a month before Apple shipped the iPhone. My prediction: The iPhone's halo effect is inevitable, but perhaps turned around. The iPod is viewed as having strong halo effect on consumer Mac sales. Conceptually, the iPhone's halo should be stronger for businesses, because of features like full Web browsing, Exchange sync and custom application development.

Regardless, Apple has sat too long on the enterprise sidelines. Apple has a story to tell enterprises. If not Apple, Microsoft will gladly tell the story through its upcoming Windows advertising campaign. Wouldn't it be ironic if Apple's "Get a Mac" commercials contributed to negative consumer perceptions about Windows Vista, only for Microsoft to countermarket to enterprises about Macs? Apple's anti-Vista marketing worked well in part because Microsoft kept silent. In the enterprise, Apple is the quiet one.

What's that saying? Silence is golden? It never is in marketing.

[Please send your tips or rumors to watchtips at live.com]

Posted by Joe Wilcox on August 22, 2008 2:00 PM