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The Hidden Opportunity of Corporate Smartphones

It’s easy to assume that everyone buys and brings their own smartphone to work, but that isn’t the case.


A version of this essay was originally published at Tech.pinions, a website dedicated to informed opinions, insight and perspective on the tech industry.

I’ve been doing a great deal of research on corporate purchase, usage and management of devices recently, and I’ve come across some interesting findings. Most importantly — the corporate smartphone is far from dead.

Though it’s easy to assume that BYOD (Bring Your Own Device) has taken over the world — especially in the U.S — and that everyone buys and brings their own smartphone to work, that isn’t the case. Particularly in more regulated industries like health care and financial services, there’s still a great deal of pushback for BYOD overall, and still very healthy purchases of smartphones by these companies.

In fact, according to research I’ve recently completed, companies in those industries are purchasing 59 percent of the smartphones in active use by their employees — only 41 percent of employees’ primary work smartphones are being purchased by individuals.

In another survey of U.S. health-care companies, I also found that 35 percent of them either strictly forbid or don’t have a BYOD program. Admittedly, the highly regulated health-care industry tends to be a bit more conservative than others, but not by that much (typically only a few percentage points difference at most). The fact is that there are large groups of people who can’t use their own smartphone for work-related purposes and, even in organizations that do allow BYOD, a majority of smartphones are likely still being purchased by the company.

Knowing this both explains some interesting market developments and provides an opportunity for products and services that are specifically targeted at this market. If you’ve ever wondered how BlackBerry has continued to hold on, this is clearly the reason. The vast majority of its business has always been and continues to be corporate-purchased smartphones. Of course, most organizations have opened up their purchases to other operating systems, which is a key factor in why BlackBerry’s unit shipments have continued to decline.

Many of the IT professionals who are making or strongly influencing these purchases also have a soft spot for Windows, and this preference clearly shows up in survey results. Though it’s well known that the percentage of consumers actively using Windows Phones is small, what isn’t well known is that a surprisingly large percentage of companies (more than 40 percent in several different surveys) have employees who use devices running Microsoft’s mobile OS. In fact, in a Technalysis Research survey of U.S. health-care companies, 17 percent of work smartphones in their organizations were running Windows Phone. This goes a long way toward explaining Microsoft’s recent comments about focusing its future smartphone development toward enterprise as a key target. They actually have a solid opportunity there.

Speaking of opportunities, there are also strong markets for tools designed to manage smartphones and the increasingly large data sets that reside on them. In addition, there are budding business opportunities for tools focused on building custom mobile applications for business.

I’ve covered this topic more thoroughly in the past, but suffice it to say that custom applications for PCs have been at the heart of most companies’ IT operations for decades. As these organizations transition their cadre of business apps to mobile, there is great business potential. This is one of the main reasons Apple took the unusual step of partnering with IBM nearly a year ago to help build and sell these custom mobile apps. With the rapid transition to large-screen smartphones, this becomes even more interesting because of how much functionality can be built into mobile apps.

The corporate angle is also the reason Samsung has invested a great deal of time and money in Knox, its device- and data-management tool. I expect to see Google increase their offerings in these areas, as well.

Tracking corporate device purchases may not be as exciting as tracking consumers, but as consumer smartphone sales start to flatten and even decline in more established markets, those interested in following the money will inevitably be drawn to these hidden opportunities in corporate smartphones.

Bob O’Donnell is the founder and chief analyst of Technalysis Research LLC, a technology consulting and market research firm that provides strategic consulting and market research services to the technology industry and professional financial community. Reach him @bobodtech.

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