iPhone launch “won’t threaten” BlackBerry in Canada

Rogers Communications Inc. whet the appetites of Canadians coveting the iPhone with the company’s recent announcement that it is poised to release Apple’s ultimate handheld eye candy into the local market.

But it’s highly unlikely that Canadian companies will rush to dump their BlackBerries for the sleek and sexy import, industry observers say.

BlackBerry’s lock on the corporate smart phone market is assured until security issues and data transmission rates are sorted out, say local technology experts.

Rogers’ short announcement earlier this week about its “deal with Apple Inc. to bring the iPhone to Canada later this year,” raised more questions than it answered.

The company, however, refused to comment further but just told people to “stay tuned.”

The company was widely viewed as the most likely provider to offer the iPhone in Canada ever since the device was developed. This is largely because Rogers is currently the only carrier in the country with a GSM-friendly network.

But despite the hype surrounding the device, analysts say the pace of adoption by Canadian businesses and consumers will depend a lot on two factors: cost and security,

Canadian iPhone users are likely to fork out $80 to $100 a month for voice and data packages, said Michelle Warren, senior research analyst for Info-Tech Research Group, based in London, Ont.

That, she noted, is significantly higher than the $72.39 a month that Rogers’ customers pay, on average, under their existing cell phone plans.

But the costs can be considerably more when the “per kilobit” charges are added once the user starts downloading data or surfing the Internet, cautioned Lawrence Surtees, vice-president and principal analyst, communications research for IDC Canada.

“Current data packages are becoming a major expense item for many companies,” he said.

Surtees said a friend who recently used a GPS-enabled 8038 BlackBerry to navigate a trip from Toronto to Aurora using Google maps was surprised to get a bill for $350 the next month from Rogers.

“The monthly fee for GPS access apparently did not include charges for kilobits of data that the map views ate up.”

Organizations mulling adoption of the device could run the risk of compromising their corporate network as well, said Adam Cole, director of specialty technology for McKesson Canada, a healthcare product and service provider.

“BlackBerry has some serious enterprise security features that iPhone cannot match at the moment. ”

For example, he said, all data traffic on the BlackBerry is encrypted to protect information from being stolen by hackers.

To access the Internet, corporate BlackBerry devices have to go through the enterprise server. “This provides IT administrators with greater control on what goes in and out and prevents malicious code from entering the network.”

By contrast, as the iPhone can bypass corporate servers, a fleet of such devices would be an IT security administrator’s nightmare, he said.

Yet the allure of the iPhone is difficult to resist, according to Cameron McKay, systems administrator for McKesson. “People are attracted to the iPhone for the same reasons they like Mac computers.”

The phone has a sleek distinctive design, unique and very usable touch screen interface and a portfolio of features that turns it into a single gadget for accessing photos, video, and music.

“In a word – it’s neat,” says McKay, who also fancies the iPhone.

But he too emphasizes that large organizations such as McKesson are unlikely to dump its BlackBerry devices anytime soon. They have invested heavily in adapting their network to the now ubiquitous BlackBerry.

“I don’t see us moving to the iPhone until we have a sense of RIM’s upcoming developments.”

But according to Surtees of IDC, there is a huge pent up demand for data transmission among cell phone users. At the moment it is being held back by existing price packages that are too steep.

It is likely that Apple will compel Rogers to adopt a pricing structure employed by AT&T, the exclusive iPhone carrier in the U.S., he said. AT&T has a $99 per month data package.

“Without a similar flat fee [for an] all you can eat data package, offering the iPhone in Canada would be useless,” Surtees said.

He said such a pricing package is essential for the iPhone because “it’s not a phone made for talking but a phone made for surfing.”

Despite these issues, many managers and executives, who want to have the latest gadgets, are expected to inquire or even demand that their iPhones be allowed into the corporate network, said Info-Tech’s Warren.

“If their company won’t get them one, they’ll purchase it themselves and ask the IT department to connect it to the network.”

A senior director of technology infrastructure for a large Toronto bank said he has had numerous such requests since last year.

“But we have had problems getting the iPhone to work with our security arrangements,” said the official, who wished to remain anonymous.

He said he contacted Apple about the issue but was essentially told “it’s not their problem they never designed the iPhone for the enterprise anyway.”

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Jim Love, Chief Content Officer, IT World Canada

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