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2008 in review – revisiting annual predictions July 31, 2008

Posted by chetan in : 3G,AORTA,ARPU,Carriers,Intellectual Property,Mobile Advertising,Mobile Applications,Mobile Content,Mobile Ecosystem,Mobile Entertainment,Mobile Gaming,Mobile Search,Mobile TV,Mobile Usability,MVNO,Unified Messaging,US Wireless Market,Wireless Value Chain,Worldwide Wireless Market , add a comment

At the turn of the year, we asked a number of industry insiders to opine on upcoming trends for 2008. Below is the summary of survey. Full results here.



Perhaps, it is time to revisit. Updated comments in italics.

1. Will Google introduce a Google Branded Phone in 2008?

Will it? Won’t it? 44.5% gave it a 75% or higher chance of happening while 40% thought it ain’t happening. GPhone is a temptation Google will find hard to resist though a lot will depend on how various initiatives and partnerships shape-up on the ground. In any case, expect another major announcement in the next 2-3 months.

Opinions were mixed. Given the problems with the ecosystem, delay in launch, and unclear business models, while the probability of GPhone launch has gone up, chances for a 2008 launch remain low. Google would want the ecosystem to give it a shot before deciding to compete with them.

2. Will Google play to win in the 700MHz Spectrum Auction?

Google has played the spectrum chess game effectively. Almost 50% respondents gave it a 75% or higher chance of Google winning the bid. Though expectations are high, Google is unlikely to play to win. Services business is not their cup of tea, they could still fund the Clearwire-Sprint deal but that investment can be spent differently to get better end-results, i.e. mobile ad revenue.

We didn’t believe that Google is playing the game to win, only wanted to be an irritant to his fellow brethren. As expected, they funded the Clearwire-Sprint deal.

3. Will Microsoft launch its own mobile phone?

Unless Google comes out with GPhone, Microsoft will stay content with its operator distribution strategy. 63% of respondents gave it less than a 25% chance of Microsoft releasing their own phone. If GPhone comes out and gets some traction, expect Microsoft to get its “fast follower” strategy into high gear.

I think Microsoft is taking a “wait and see” approach on this one and is likely to come out with something once GPhone is out. Remember Zune.

4. Will Mobile Payments get traction in North America and Western Europe?

Only 9% thought it is a sure bet for 2008. True mobile commerce hasn’t really started in the western world. While there are significant movements, 2008 will just be a “lay the groundwork” year for mobile payments.

Even from “laying the ground work” point of view, we seem to be behind. Number of trials and activity though, expect to see some noticeable launches in first half of 2009.

5. Will WiMAX regroup from its setbacks?

Only 35% gave it a 75% or higher chance (of WiMAX resurrecting itself esp. in the US in 2008). A lot depends on how Mr. Hesse deals with Sprint’s WiMAX business. Indications are there will be a deal with Clearwire to off-load the risks via some external investment (Google?).

Well, Mr. Hesse dealt his hand and now all eyes are on Mr. McCaw – can he deliver?

6. Will Helio survive 2008?

Almost 70% respondents thought Helio won’t make it. Given the flameout of some of the prominent new-generation MVNOs, it is hard to see how Helio will see 2009. It will all come down to how persistent is SK Telecom. Earthlink doesn’t have the bank balance to keep funding this initiative.

Well, majority thought, Helio won’t be around and SKT realized it too and sold the unit to Virgin Mobile. At least, it didn’t have to file chapter 11.

7. Will Verizon truly open-up its garden for third-party visitations?

Only 5% thought it is a sure bet for 2008. Verizon’s open posturing was more to ward off any regulators and to improve its image. There is unlikely to be any meaningful progress on this front this year.

Hardly anyone thought that VZ is serious and not much has happened on that front just yet.

8. Will 2008 be the inflection year for Mobile Advertising?

42% gave Mobile Advertising a 75% or higher chance for rapid growth. Market will mature, more consolidation, some privacy gaffes but overall things are looking up for mobile advertising.

There is definitely growth in the Mobile Advertising segment. Inflection point is in the eyes of the beholder. I say, we will make pretty good progress this year but mobile ad spend will still be < 1% of the overall mix. Still lots of foundation work need to be done by the industry. Almost every serious carrier, advertiser, agency, middleware, online player is involved in mobile advertising and it is just a matter of time before things get sorted out.

9. Will Femto-Cells gain any significant momentum in 2008?

It will be an introduction and experimentation year, so no significant traction is expected. Over 52% thought Femto-Cells will be just a buzz word in 2008.

Well, Sprint launched Femto-Cells but it will be a while before they become pervasive.

10. Will Nokia be able to extract iPhone-style rev-share from carriers in 2008?

Less than 20% thought Nokia will be able to do an Apple when it comes to rev-share arrangements. For OEMs, going direct to the consumers was considered treachery to the sacrosanct relationship with the operators. Until Apple showed up with iPhone. Now, Nokia is putting its services strategy in motion and is building a direct relationship with the consumers worldwide and it has a good shot at pulling it off though it will be a long haul.

Given that Apple prudently reversed its business model, the chances of any other OEM extracting iPhone 1.0 type rev-share are going to almost zero.

11. Will Palm survive 2008?

Only 8% gave it a 100% chance of surviving 08 as an independent entity. It will be difficult for Palm to stay in a status-quo mode. They desperately need a hit device that can give them some breathing room.  Given all the operational and strategic problems the company is having, a sale is likely.

Most thought (including yours truly) that Palm will have a difficult time surviving 08. However, with some of its recent launches have put some life back into the company and it might go on for a few more quarters. The problems and challenges are still quite stark.

12. Will iPhone truly open up?

Over 45% thought iPhone won’t open-up in any meaningful way. Apple has built-up one of the most profitable closed empires in the digital world. Are they about open things up? While the iPhone SDK is scheduled for early 08, don’t hold your breath on accessing the critical native APIs.

Apple’s Appstore is clearly an idea of the best open closed systems out there. If the closed garden is done well with open flowers can flourish. The system still closed but you can access a number of device APIs to make it worthwhile.

13. Will there be more unsubsidized devices introduced in the US market in 2008?

Almost 49% thought we are likely to see another unsubsidized device in the US market this year. Nokia is looking to go direct and some GSM handset manufacturers are likely to entertain the idea of testing the market with unsubsidized devices.

Given that Apple quickly reversed itself with iPhone 3G, we are unlikely to see unsubsidized devices for some time to come.

14. Will Mobile TV move the needle in 2008?

Almost 70% thought mobile TV won’t make much of a difference in 08.Though AT&T is slated to introduce MediaFLO to join Verizon in the Mobile TV services market, lack of devices and better pricing models will hinder wide adoption in 2008. However, downloadable video and VOD content will experience significant growth.

Mobile TV remains plagued with unreasonable business models and pricing plans. Until that is fixed, this will remain a niche hobby for most.

15. Will Android make a dent in handset shipments in 2008?

Only 15% gave it a more than 75% chance this year. It is going to take some time for Android plans to mature and materialize. Don’t see any material impact in 08.

We didn’t think Android will make progress in 08 beyond some minor launches. Even they seem uncertain and 08 is not their year.

We will do another survey towards the end of the year, look forward to your participation then. Thanks.

International Journal of Mobile Marketing is out

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Got my copy of the IJMM and I must say it is very well done.

Designed to provide information on the mobile channel and its use for marketing, it includes 10 articles from academics, industry experts, thought leaders and global contributors. The fifth installment focuses on the development of a better understanding of the who, how and why of mobile marketing.

Featured articles include:

IJMM is published twice a year so if you are interested in writing for the journal, let me know, Dec 08 issue is coming. More details here.

Verizon Q2 results July 29, 2008

Posted by chetan in : US Wireless Market , 2 comments


Verizon didn’t have the iPhone but that didn’t stop them for posting some terrific numbers – $2.6B in data revenues, 24.4% of the revenues coming from data, 1.5M net adds, 60%+ 3G subs – all pretty impressive.

Week 3 Keynote – Bellagio July 28, 2008

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Keynote Week 3 at Bellagio, Part I, Part II and III are also available on the site.

eHealth Connection in Bellagio, Italy

Posted by chetan in : 3G,ARPU,BRIC,Carriers,Intellectual Property,Mobile Ecosystem,Worldwide Wireless Market , 7 comments

Week 3 kicked off today in Bellagio, Italy as part of The Rockefeller Foundation’s month long conference on eHealth.

Some more info below:

mHealth and Mobile Telemedicine – an Overview

Background Papers: 

Sizing the Business Potential.pdf

Relationship among Economic Development.pdf

mHealth: A potential tool in India.pdf

mHealth: A Developing Country Perspective

Current Status of eHealth Initiatives in India

Mobile Services Evolution: 2008 – 2018

Related Links: 

mHealth and Mobile Telemedicine – Conference Wiki

Organized by the United Nations Foundation, Vodafone Group Foundation and Telemedicine Society of India
July 27-August 1, 2008

Mobile electronic health tools such as cell phones and telemedicine technologies are rapidly transforming the face and context of health care service delivery around the world. Currently, there are over 3.5 billion mobile phones in use across the globe; this figure is set to double in the next decade. At the same time, telemedicine’s role in clinical care, education, research, and training in the health sector continues to grow from continent to continent.

Mobile phone use in particular is exploding across the developing world, offering the opportunity to leapfrog other applications and services on both the health and technology fronts. As United Nations Foundation President Timothy E. Wirth emphasizes, the power of these technologies to improve health and the human condition cannot be underestimated: “Modern telecommunications, and the creative use of it, has the power to change lives and help…. solve some of the world’s biggest challenges.”

Telemedicine is the use of medical information exchanged from one site to another via electronic communications to improve patients’ health status or for educational purposes. It includes consultative, diagnostic, and treatment services. Mobile health information technology (mHealth) typically refers to portable devices with the capability to create, store, retrieve, and transmit data in real time between end users for the purpose of improving patient safety and quality of care. The flow of mobile health information is characterized by portable hardware coupled with software applications and patient data that flows across wireless networks. Mobile health enables clinical access to a variety of major software applications central to patient care and subsequently increases clinicians’ reach, mobility, and ease of information access, regardless of location. For example, a clinician might use a mobile device to access a patient’s electronic health record (EHR), write and transmit prescriptions to a pharmacy, interact with patient treatment plans, communicate public health data, order diagnostic tests, review labs, or access medical references. Data transmission is realized by technologies common in everyday life including blue tooth, cell phone, infra-red, wifi, and wired technologies, all of which operate as part of a network. Mobile devices can be helpful across the health care spectrum—transmitting vital information quickly during an acute public health crisis or being used for on-going needs such as education and training. When utilized for patient care, mobile devices are credited with improving patient safety by eliminating errors commonly associated with paper-based medical records and enhancing the continuity of care. In addition to improved patient outcomes, workflow and administrative efficiencies from the use of mobile devices can produce cost savings for the user or user organization.

Both telemedicine and mobile health are becoming more common around the globe and many countries, particularly in the developing world, are interested in the reality and potential of mobile technology and telemedicine convergence.

This conference week will build the case and define the roadmap for mHealth and mobile telemedicine in the Global South by

• Examining the current and future landscape of mHealth and mobile telemedicine

• Assessing the priority issues for mHealth and mobile telemedicine

• Documenting the impact of mHealth on development and health care delivery and reach

• Discussing mHealth and telemedicine markets and scaling, highlighting Global South opportunities and challenges

• Focusing on imperatives for national-level health data collection process through mobile devices

• Exploring critical success factors and incentives for local implementations

• Creating a collective declaration of action

• Seeding a multi-sector partnership dedicated to designing, funding, and advancing mobile service projects in the Global South

The United Nations Foundation (UN Foundation), the Vodafone Group Foundation, and the Telemedicine Society of India will co-convene the mHealth and Mobile Telemedicine conference. The UN Foundation acts to meet the most pressing health, humanitarian, socioeconomic, and environmental challenges of the 21st century through the support of the United Nations, new and innovative public-private partnerships, advocacy, and grantmaking.

The Vodafone Group Foundation and its technology partnership with the UN Foundation, established in 2005, have created strategic technology programs to strengthen the UN’s humanitarian efforts worldwide.

The Telemedicine Society of India was created in 2006 with the objectives of promoting and encouraging development, advancement, and research in the science of telemedicine and the application of telemedicine technology in clinical care, education, and research in the health sector of India.

I will be presenting my paper on Mobile Services Evolution 2008-2018 tomorrow AM. If you are interested in the slides, let me know.


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so much for being cool. And they want to take on Google.

Cuil launches

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Google challenger launched by ex-googlers. Competition is good, the task too hard.

Market Edge with Larry Weber July 23, 2008

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Recorded a discussion with Larry Weber, chairman of the W2 Group and author of the bestseller “marketing to the Social Web: How Digital Customer Communities Build Your Business.”

The interview will be aired on Tuesday, August 5 at 12pm EST at http://www.webmasterradio.fm/Internet-Marketing/Market-Edge.

We discussed the Mobile Advertising market place and the emerging ecosystem dynamics. It was a pleasure. Thanks Larry.

Good data services results from ATT

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  • Wireless Data Services Up 52.0 Percent. Wireless data revenues grew 52.0 percent versus the year-earlier quarter to $2.5 billion, reflecting continued strong adoption of services such as Internet and data access, e-mail and messaging. Wireless Internet access revenues more than doubled versus results for the year-earlier second quarter, while revenues from e-mail, messaging and data access all delivered greater than 50 percent growth. Text messaging volumes tripled versus totals for the year-earlier quarter, and multimedia message volumes increased more than 170 percent. At the end of the second quarter, approximately 18 percent of AT&T’s postpaid wireless subscribers had an integrated device, up from 8 percent one year earlier. On average, these subscribers have ARPUs roughly double the company average. AT&T expects continued strong growth in wireless data services as more customers choose data plans and advanced wireless devices such as the new iPhone 3G, which was launched as an AT&T U.S. exclusive on July 11. In the first 12 days following launch, sales of the iPhone 3G were nearly double levels achieved in AT&T’s 2007 iPhone launch.
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    Economic woes hit the telecom sector July 22, 2008

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    So far the wireless sector has some how avoided the doldrums of the economic havoc that’s upon the financial and other sectors. Vodafone’s announcement might have changed that. The UK based operator cut its revenue forecast and had a bleak future outlook.

    From NYT

    PARIS — New evidence that the European economic slowdown was hitting consumers emerged Tuesday as the Vodafone Group, the British cellphone operator, warned that its results would suffer.

    “There’s a big macroenomic picture that’s playing through, and frankly, as a company, we’re not immune to it,” the chief executive, Arun Sarin, said in a conference call.

    He said Vodafone, the world’s largest cellphone operator, was cutting its revenue forecast for the year to around $79.6 billion, the lower end of its previous estimate.

    Mr. Sarin said business was weaker in Britain and throughout Europe, but that the picture was particularly bleak in Spain, which like Britain, Ireland and the United States, was undergoing a painful adjustment as a property bubble deflated.

    The decline in the Spanish housing industry has led many of its customers among the migrant work force there to go home. As a result, revenue growth in the Spanish market has stalled after years of 10 percent or more annual increases.

    “The business isn’t falling apart,” he said, “but within this business that’s a segment that’s having a hard time.”

    He noted that the company had not changed its forecast for full-year profit of £11 billion to £11.5 billion or $21.9 billion to $22.9 billion. Shares of Vodafone fell nearly 15 percent in London afternoon trading, giving them a loss of nearly 21 percent in the last 12 months. Telefónica, Vodafone’s main rival in Spain, fell 7.4 percent in Madrid.

    Mark James, an analyst at Collins Stewart, said telecommunications companies had displayed remarkable resistance to the economic slowdown, but that Vodafone had shown that they could not hold out indefinitely.

    “The Spanish and U.K. telecoms markets, resilient to the economic slowdown to date, finally look to have cracked,” he told Reuters.

    Results from Ericsson, the Swedish maker of wireless networking gear, also hurt technology stocks. Ericsson’s shares fell 9.3 percent in Stockholm after it said second-quarter net profit fell 70 percent, to about $320 million from a year earlier. Revenue rose 2 percent.

    Twitter can’t scale with demand July 21, 2008

    Posted by chetan in : US Wireless Market , 1 comment so far

    This is what happens when you get behind demand. A good problem to have but only for a short time. in a fickle Internet attention-span, competitors are always waiting to see the number 1 player trip ..


    Yahoo makes peace with Icahn

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    Well, this hasn’t been a good year for Yahoo! but at least it is trying to tackle one obstacle at a time. Having thwarted Microsoft’s overtures, Yahoo made peace with Carl Icahn to give 3/11 board seats.

    This doesn’t mean troubles are over yet. A lot depends on how Google-Yahoo pact is treated by the regulators. It will be hard for them to ignore the threat of a monopoly staring them in their face but stranger things have happened.

    As for MS, it must be scratching its head figuring out its next move. Whatever the outcome, the MS-Yahoo saga is headed towards Business School case studies.

    iPhone Part II July 17, 2008

    Posted by chetan in : US Wireless Market , 2 comments

    Haven’t had time to jot down my thoughts on the second incarnation of the iPhone. As expected, iPhone II was a success despite all the glitches which was a surprise nevertheless. Given the number of launch countries, the sales numbers started to rise fairly quickly reaching over 1M in 2 days. When Apple announced iPhone 2.0 back in June, I estimated that the 10M goal for the device will be met by 3Q 07. This is looking more and more realistic now as there will be more countries and operators added to the mix. The broadband and appstore capabilities are quite attractive to consumers and it shows. VPN and direct access to Exchange will get many more users into the mix and IT folks less apprehensive.

    Appstore specifically has enabled so many developers and ecosystem players to make iPhone a central piece of their strategy to understand mobile consumption, mobile trends and future directions. 800 apps launched, 10M downloads in 2 days is quite phenomenal. I can’t recall any other single device having such a performance. iPhone is the standard against which all other devices will get compared.

    The clearcut business model of 30/70 split is also attractive, there is no separate negotiation, one stop shop, less biz dev expense. Literally, anyone can launch apps and services, doesn’t require companies to have a deep rolodex and the lifecycle to launch gets reduced.

    Disruption is in the air.

    Reviews of Mobile Evolution paper

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    We have been getting terrific reviews of our Mobile Evolution paper that we did for the UN Foundation. Always good to hear that. Tomi Ahonen, author of five best selling books on mobile including his ground-breaking “Communities Dominate Brands” wrote

    I received a nice link from our friend Chetan Sharma (whose book Mobile Advertising is brilliant). Chetan did a report for United Nations Foundation around mobile in e-health. The document is good on three levels. First, it is free, thanks to the UN’s grant. Secondly, it discusses the next 10 years of mobile in a very good way, regardless of whether you are interested in e-health. And thirdly, it does look very specifically at e-health issues as well, towards the end of the paper. A great document, worth reading, with lots of insights and good data from today, with very realistic projections and forecasts for the next 10 years.  Thanks Chetan!

    Thanks a lot, Tomi. It was an interesting and challenging exercise to look at far ahead and write something meaningful. I am looking forward to presenting the paper to the experts in a couple of weeks.

    COM #132 over

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    at Mippin.com. check out the entries from last week.

    New Paper: Mobile Services Evolution 2008-2018 July 11, 2008

    Posted by chetan in : 3G,AORTA,ARPU,BRIC,Carriers,CTIA,Intellectual Property,Japan Wireless Market,Mobile Advertising,Mobile Applications,Mobile Content,Mobile Ecosystem,MVNO,Smart Phones,Speaking Engagements,US Wireless Market,Wi-Fi,WiMax,Wireless Value Chain,Worldwide Wireless Market , 2 comments

    Mobile Services Evolution 2008-2018

    Bellagio, Italy. July 13 – Aug 1, 2008

    This project has been made possible by the generous funding from THE UNITED


    Download PDF




    This weekend in Bellagio, Italy begins a 4 week long dialogue on the subject of eHealth. The Conference – Making the eHealth Connection: Global Partnerships, Local solutions is being organized by the eminent Rockefeller Foundation. It will bring in experts and organizations from around the world to discuss, share, develop, agree on solutions going forward. Each week deals with a different nuance of the eHealth framework. This will allow for an in-depth study and discussion. Full conference info here.

    Week 3 deals with mHealth and Mobile Telemedicine being organized by The UN Foundation, Vodafone Group Foundation, and the Telemedicine Society of India. As part of this conference The Rockefeller Foundation and its partners have released a series of white papers on various subjects. I was asked by The UN Foundation to look into the potential Mobile Services Evolution going forward and how a platform could be developed that will enable a number of applications focused on enterprise, health, public safety and associated sub-segments. While it is difficult to predict with any precision what might happen 10 years from now, one can try to understand the evolution of technologies, business models and their interrelated ecosystems and see the impact on various vertical segments where we use technology to solve some basic problems. Most of the time, technology itself doesn’t cut it, it requires partnerships, collapsing of the bureaucracy, innovative funding means, and just the burning desire to make a difference that matter the most. I strongly believe in Mobile’s central role in a number of social and public services. Mobile Services Evolution 2008-2018 is a small effort to forward that discussion.


    Over the last 10 years, the progress made in the global mobile industry has been truly stunning. Mobile device ownership has gone from being a luxury item to necessity as the feverish rate of adoption has spread mobile technologies into every corner of the world. As we look into the next 10 years, it is certain that the mobile phone will be used for much more than just voice communications. There is an opportunity for private institutions and public enterprises to build a vision of cohesive mobile services platform that enables and engages the masses to both fundamentally enhance the quality of their daily existence as well as lead to new opportunities globally. This paper takes a look at the potential evolution of mobile technology and services over the course of the next 10 years and discusses an M-Services framework for building and deploying diverse mobile services. The paper also looks into the challenges of such an endeavor and steps that will be needed to achieve the vision.

    Table of Content


    Abstract 3
    Introduction 4
    Mobile device: The Remote control of our lives 5
    Mobile Technology Evolution 2008-2018 7
    Deployment and adoption of mobile technologies in the developing countries 9
    Mobile Services Platform 10
    What does it take to make it happen? 15
    Conclusions and Recommendations 18


    Download Complete Paper – PDF

    Thanks to THE UNITED NATIONS FOUNDATION for making this work possible. I will be presenting the paper at the conference later this month.

    Your feedback is always welcome.


    Chetan Sharma

    iPhone 2.0 day

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    Well, the second incarnation of the device goes on sale today .. media circus is active though the mania of 1.0 triumphs anything we will see today. Apps give a new zing to the launch. Interesting stats – 75% of the apps are $9.99 or lower, over 500+ apps .. it will start to look like a nice business for Apple. A number of photo, video apps e.g.

    vSNAX from Rhythm New Media – One can watch the latest video clips including breaking news, celeb gossip, beautiful models, funny snippets, and more from brands you know like CBS, Spike, VH1, Style Network, AccuWeather.com, Ford Models, Ripe TV, G4 TV, Octane TV, and more.

    iPhone_vSNAX Videos Free App

    A new photosharing service – BigCanvas developed by Satoshi Nakajima of Windows and UI Evolution fame


    Of course, standard social networking, communications, games apps abound. The Appstore is probably the single biggest contribution to the mobile industry by this version of the iPhone. The battery life, the higher cost of data plans etc will gave way for time spent on the iPhone and advertising dollars to flow

    More iPhone fun July 10, 2008

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    Couple of more interviews came online today

    San Jose The Mercury News – IPhone 3G ready for global debut

    The News Journal – iPhone 3G expected to lure early birds

    iPhone mania II July 9, 2008

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    Well, we are on for another round of iPhone coverage. However, this time around, it will be a bit subdued.

    Did a few interviews this morning on iPhone and what it might mean, what can we expect etc.

    One of them was with Internet Retailer regarding the decision to not do online sales in the US. You can read the story here.

    IPhone 3G has business appeal July 7, 2008

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    John Boudreau of San Jose Mercury News interviewed me for this piece.


    IPhone 3G has business appeal

    By John Boudreau
    Mercury News

    Article Launched: 07/07/2008 01:34:18 AM PDT

    A year after becoming the stylish pocket PC for consumers, the iPhone is ready to go to work.

    The latest version of the mobile device, which goes on sale Friday, will take advantage of a faster wireless network – dubbed 3G for third-generation – making it more attractive for business use by improving what many consider to be the current version’s key flaw – its slow Web access.

    Equally important to companies are new e-mail and security capabilities that will give the iPhone a foot in the office. And that has many employees pestering their information technology managers about getting their own corporate iPhone.

    Wells Fargo Bank Executive Vice President Steve Ellis is involved with a pilot iPhone project to test its functions and work on integrating it into the company’s vast infrastructure. He said he experiences “iPhone envy” from colleagues, and that hardly a day goes by when he’s not asked about when iPhones will be available to all employees.

    The 3G iPhone will be able to sync seamlessly with Microsoft Exchange servers and support Cisco VPN security settings so workers can access sensitive company information. It also will support other applications geared for the corporate world, such as “remote wipe,” the ability to instantly remove data on a device if it is lost or stolen.

    The new button-down iPhone will compete with the BlackBerry and Palm Treo as a tool for employees. In the past, Apple Chief Executive Steve Jobs has said his company

    would focus its efforts on the consumer market. But the iPhone’s wide appeal is giving it a place at the workplace without changing its core mission.

    “If they focus on the consumer side with just enough functionality to get into the enterprise market, they will sell a lot of units,” said Ken Dulaney, an analyst with Gartner, a research firm.

    Rather than stealing share from competitors, the iPhone will expand the market, says independent wireless industry analyst Chetan Sharma. The iPhone could increase the presence of smart-phones in new areas, such as the medical profession. Applications under development could enable doctors to easily access X-rays and other information while visiting with patients, Sharma said.

    “It’s going to grow the pie,” he said.

    Apple said 35 percent of Fortune 500 companies has participated in the iPhone’s corporate-friendly 2.0 beta software.

    Terry Stepien, an executive at Dublin-based Sybase, which makes back-end software that links mobile devices to corporate systems, said his company is getting numerous inquiries about the iPhone. In particular, he’s hearing from financial and manufacturing logistics companies.

    “There are people who love these devices who are bringing them in through the back door,” said Sean Ryan, an IDC mobile enterprise research analyst.

    “The iPhone works well for those who just need to find information,” he added. “It offers an incredible browsing experience. It’s the best out there.”

    But the iPhone’s DNA, Web surfing with a touch screen, does not always fit with the e-mail-heavy business world. Those accustomed to using a keyboard might have a hard time making a switch if they spend a lot of time typing.

    While the iPhone will be offered as an alternative at some companies, analysts don’t expect it to threaten the BlackBerry’s dominance among the cubicles. Research In Motion, the maker of BlackBerry devices, aggressively improves its service and relationships with corporate America.

    “It’s a gutsy call for IT people to switch,” said Piper Jaffray analyst Gene Munster. “RIM’s been good to them. Why rock the boat?”

    In the first quarter of the year, RIM’s BlackBerry took 44.5 percent of the smart-phone market in the United States, while Apple had 19.2 percent, according to research firm IDC’s vendor survey.

    The iPhone’s hip aura, while appealing to college students and “creative” professionals, may actually hinder its appeal among the gray suits, Munster said.

    “Culturally, it’s hard for some organizations to get their arms around that, giving their employees something they can have fun with,” he said.

    But Wells Fargo’s Ellis, who said the bank is building its own iPhone applications to provide services for customers, doesn’t see why technology shouldn’t be fun to work with.

    About two decades ago, he helped deploy early PCs at Wells Fargo, a chore that consumed much of his time because their applications came with a steep learning curve.

    “If you have a device that allows you to spend 5 percent of your time figuring out how it works and 95 percent of your time doing your work, that’s a good thing,” Ellis said.