Apple claims that the latest updates fix some bugs in e-mail and browser operations; it's too soon to see if the update fixes the application crash, slowdown, and freeze issues I've experienced in Mail and Safari ever since the 2.0 software was released. The 2.1 update did not do the trick.
What the iPhone 2.2 update doesn't do is fix the shortcomings that are sure to give businesses a reason to keep the iPhone at arm's length. There's still no on-device data encryption. Passwords are limited to four-digit numeric PINs. You can't synchronize notes or set up calendar items with the same scheduling controls as in Exchange. You can't cut and paste data. To me, those are basic business capabilities that the iPhone simply should have. Never mind the other enhancements that I wish the iPhone had in order to make it the "no question about it" choice for business smartphone users.
The competitive landscape: Why the iPhone still has a good shot
Despite these flaws, the iPhone remains a great smartphone. And its new generation of competitors falls short in many ways as well.
The Research in Motion BlackBerry Storm (see our Test Center review of the Storm) is the most threatening contender, since enterprises already adore RIM's BlackBerry line, which is very secure and supports all three main e-mail systems: Microsoft Exchange, IBM Lotus Notes, and Novell GroupWise. The iPhone natively supports Exchange, IBM now has a Lotus Notes client for the iPhone, and Novell will add iPhone support to its GroupWise 8 product in early 2009. But the iPhone's security remains subpar, and that reason alone will keep the BlackBerry as the first choice for business. The new BlackBerry Storm offers both a real HTML browser -- no more of that DOS-like WAP technology -- and a touchscreen that are good enough to nullify Apple's advantages there. The one key issue with the Storm is its lack of Wi-Fi support, making it more expensive to use than the iPhone in many cases because of all the extra minutes and bandwidth it takes in places where Wi-Fi is or should be available, such as in businesses' meeting rooms and employees' homes.
The Google Android-based T-Mobile G1 is a disappointment, with no real enterprise capabilities. Gmail doesn't count as business-class e-mail, and the lack of syncing to the standard calendar and other information apps a business uses is shortsighted. It's clear that Google wants to create a walled garden to its own online services -- even control-oriented Apple isn't so craven. Maybe Android developers will fill these gaps, but that's a risky bet. Many early Android apps suffer from poor quality, and even Apple's vaunted App Store shows that most developer attention goes to personal apps, not business ones. Android may make headway for pure personal use, where its design succeeds, but that won't be of interest to businesses.
The Palm Treo Pro keeps both Palm and Windows Mobile in play for business adoption. The Treo Pro is a well-designed smartphone, and "Microsoft shops" that like everything to be Redmond vanilla will avoid the BlackBerry and iPhone so as not to upset their technology stomachs. Windows Mobile has some shocking incompatibilities with HTML -- such as not supporting iframes -- but these are supposedly going to be fixed in the next Windows Mobile update, expected in early 2009.
The iPhone 2.2 update could have propelled the iPhone to the undisputable lead in the growing universe of mobile 2.0 options. But it doesn't. It's only a minor fix. I would have called it iPhone OS 2.1.1.