Sunday, June 14, 2009

Is Apple Making its Biggest Push for Enterprises Ever?

Is Apple getting ready to finally change gears and look beyond the consumer market? That is what appears on the surface given some of the recent moves coming out of 1, Infinite Loop.

In the rapidly evolving smartphone space, Apple's version 3.0 of its iPhone software marks Apple's biggest move to challenge RIM's domination in the enterprise space. With support for push email, Exchange, voice memos, and (finally!) copy/paste support, the iPhone now appears an option that enterprises can consider. Add to that, support for remote data wipe, hardware encryption, and tethering, and you now have a compelling smartphone, that can finally do all that has been done by a lot of other phones, but in a much more smarter and user-friendly manner. 

The App store that Apple has built also brings a key differentiating point to the table in its favor. While RIM and Microsoft are now making moves into the app store arena, Apple's app store already offers a straight-forward and tightly integrated solution for downloading apps. While enterprises will continue to have security issues around making available their internal apps on a public list, however, it is quite possible that Apple can create customized app stores that allow enteprises the security and privacy that they so desire in creating and pushing applications to their employees. 

Sure, there are a host of challenges that Apple still needs to surmount if its devices/software can even be considered for an enterprise-deployment scenario. However, Apple has its best shot at gaining a foothold in enterprises with its iPhone. With mobile workers requiring increasingly 'smart' devices, and the growing appreciation of vertically integrated solutions, such as the iTunes-iPhone combo, it is only but natural that enterprises consider the iPhone as a compelling alternate to the Blackberrys. It also helps that the iPhone has been seeing what can probably be described as the best growth ever for any smartphone. Apple, though, will have to ensure that it does away with its current adhoc approach and bring more transparency, and a sense of stability to its software release process if it hopes to convince enterprises to sign up.

Tuesday, June 2, 2009

Bharti+MTN: One Hurdle Too Many?

Bharti's renewed attempt at creating an Indo-African telecoms giant appears poised to face several roadblocks, some due to the inherent differences, and some due to the externalities surrounding such large deals. While Bharti has seen strong, in fact tremendous growth, in India, the company is limited in its geographic presence across the globe. MTN, on the other hand, has seen growth outside its home market of South Africa. However, there exist significant differences between the kind of markets that Bharti and MTN serve. India is a low ARPU, high usage market while markets where MTN operates typically are low ARPU, low usage. Competitive dynamics are yet to kick in pricing of services which continues to remain high in multiple African markets. While prices are expected to fall down in the coming years, however, increasing reach to the low-income rural communities will be a significant strain on their balance sheet. 

The contours of the how the deal will likely be structured, although this could change, also point at significant complexity. Bharti is looking at raising close to $4 bn in debt. Given the fact that 3G spectrum auctions in India are round the corner, and Bharti's necessity to participate heavily in them, Bharti could end up facing an uphill task in raising funds. 

And lastly, a key point in the whole proposed merger, and which was largely responsible for the breakdown of talks last year, is the nationalist feelings that are stoked through such large cross-border deals. Opposition could arise from labor unrest. Regulation in many emerging markets in Africa as well appears to be dictated by nationalist feelings, particularly in matters involving international operators. France Telecom's problems in Egypt, and, Vodafone's troubles with the local regulator in South Africa suggest caution.

In a nutshell, the path to a combined MTN-Bharti is riddled with potholes, however, the prospect of a combined entity having over 200 Mn subscribers appears too enticing for not overcoming these challenges.