The great invasion
Hoping to capitalize on the craze created by the Apple iPad, mobile-device makers and computer manufacturers are descending on the market in 2011 with tablet devices of their own. And the most coveted market is the enterprise market, where the iPad continues to make significant inroads and is poised to replace the laptop for some business functions.
To wit: Apple announced during its fiscal 2011 first-quarter earnings call that more than 80% of Fortune 100 companies already are deploying or piloting the iPad. Sales of the device reached 7.3 million last quarter, generating $4.6 billion in revenue for Apple. Enterprise mobile software vendor Good Technology, which tracks device activations in the enterprise, said that the fourth quarter saw a 64% increase in the iPad’s share of all device activations among the roughly 2,000 companies with which it has relationships.
Last October, Apple CEO Steve Jobs, which recently stepped down because of health problems, said the iPad was “being grabbed out of our hands,” despite the fact that the company had yet to push the iPad “real hard in business.”
“We’ve got a tiger by the tail here, and this is a new model of computing which we’ve already got tens of millions of people trained on with the iPhone, and that lends itself to lots of different aspects of life, both personal and business,” he said.
What is the draw of tablets for both employees and businesses? The cross between a smartphone and laptop, the iPad — as well as other forthcoming tablets such as Research In Motion’s PlayBook and the Cisco Cius — features a large touch screen, long battery life, instant boot time and a plethora of applications that can be downloaded onto the device. In addition, these highly mobile devices are being priced under $1,000.
“Apple’s growth in this area is not coming from consumers but from businesses,” noted Don Mayer, CEO of Small Dog Electronics, the third-largest Apple retailer in the nation. “Businesses are deploying it themselves as a supplement device that integrates seamlessly with the laptop and the iPhone.”
Mayer himself relies heavily on the iPad, which he believes can do 95% of what can be done on traditional computers, especially when he’s on business trips. But while traditional computers still win out on a regular, in-office basis, he and industry analysts expect that tablets will replace the laptop in certain segments of the enterprise where heavy computing isn’t necessary.
“There are very strange places where these are showing up,” Mayer said. “I was in Las Vegas and the menu was on an iPad with pictures of the food. You can hook up a credit-card scanner and use it to check customers out in a retail environment. People can do drawings, create a display of photographs, sit down next to a client and use their fingers to zoom in and zoom out.”
Raffi Tchakmakjian, vice president of product management with mobile device management company Trellia, also sees tablets replacing laptops in the enterprise in certain segments, but what those segments are has to be determined by the enterprise itself.
“At the end of the day, you know your own end users, Tchakmakjian said. “Enterprises have to determine which form factor and device works best with the applications their employees work with, and pick those.”
As such, tablets are catching on in sectors such as financial, insurance and healthcare, where activities are well-defined with specific flow processes. Tchakmakjian said that adoption in the government sector caught his company off guard.
“They are usually the last ones to adopt new technology,” Tchakmakjian said. But government chief information officers are realizing that not only do they have to work with tighter budgets but also retain top talent that is clamoring for the latest technology.
Mayer’s company recently outfitted about 150 lobbyists and lawmakers in the Vermont state legislature with iPads so that they can peruse and search in hundreds of pages of legislative digests rather than printing the digests out on a daily basis.
“Instead of printing these documents every day, the CTO decided to test pushing this out to an iPad,” Mayer said. “The payback is less than a year, and they have a searchable document on their iPad every morning.”
Last June, Cisco announced the Android platform-based Cius, a business-focused tablet that weighs 1.15 pounds and is designed to extend Cisco’s collaboration applications to a secure mobile platform. It will offer HD video streaming, real-time video, multi-party conferencing, e-mail, messaging, browsing and the ability to produce, edit and share content stored locally or in the cloud.
Cisco is touting the device as one that mobile workers can use instead of desktops because the Cius will feature virtual desktop integration and flexible computing options with cloud-based services. Cisco said that the tablets will provide dramatically lower capital costs and cost per user for desktop maintenance.
The company has yet to announce pricing for the Wi-Fi-only device that is scheduled to ship at the end of March, but has indicated it will be below $1,000. The company will come out with an LTE version of the Cius in conjunction with Verizon Wireless by this summer, and it plans to announce other mobile broadband connectivity deals with operators.
Tom Purorro, director of product management for the Cius, said that the company already is experiencing a backlog of orders. He plans to replace his own laptop with the Cius.
“Everyone is doing the taste test,” Purorro said. “Enterprises have been ordering consumer-based tablets to see what they could do with them. We have the unique advantage in delivering on enterprise features and functionalities for a long time. We have a longer path and trust, and we’re getting more than five or six orders per customer.”
Purorro already is seeing numerous vertical-use cases for the Cius. For example, an oil company is writing an application pertaining to oil wells that includes a video catalog and digital signage. A bottling company plans to use the Cius for barcode scanning to make product movement in the warehouse more efficient.
Purorro believes the tablet proposition will become even more powerful as these devices become more mature, processing power increases and the intense competition pushes the pricing down even further in the coming years.