Amway Parent Catches iPhone Fever

Attempting to bring its independent distributors the souped-up Web capabilities of the new 3G iPhone, direct-sales leader Alticor is launching a pilot program with the popular Apple handset, starting next year.

Ada, Michigan-based Alticor is the parent company of Amway, which for almost a half-century has sold household items and nutritional supplements to U.S. consumers through a contracted sales force.

Like many IT pros, Alticor CIO Jeffrey Peterson has been intrigued by the powerful touchscreen device since it arrived on the market in June 2007. Apple has sold several million iPhones and moved 1 million units of the new 3G iPhone, which includes enhanced enterprise-grade functionality like beefed-up security and management, in its first weekend in stores.

From the start the iPhone has been "certainly attractive," says Peterson. "But the initial release didn't provide the capabilities around remote management and the security of the information on the device" that the company required.

Last month Apple released the upgraded iPhone that runs over high-speed 3G networks, along with a software development kit for the device that will allow businesses to create or customize applications to run natively on it.

With the new version, Peterson recounts, "We said, 'All right, let's get our hands on it and see if it'll really do the trick now.'"

Alticor's IT team is building the applications for the pilot now. Beginning in January 2009, the program will be limited to a pre-selected group of 150 or so independent business owners (known in Amway-speak as "IBOs") out of the 500,000 distributors in North America. Amway (which is transitioning back to its original brand after an unhappy period under the "Quixtar" moniker) has about 3 million IBOs worldwide. Amway's North America division had revenues of $1 billion-plus the last five consecutive years (globally, Alticor made $7.2 billion in 2007).

Alticor already provides its IBOs with a few Web-based applications they can access via BlackBerrys or other smartphones with Internet connections. The iPhone trial is part of a larger effort to create a suite of Amway-specific mobile business applications and make them available to the sales force. The trial will look at how well the apps function over the iPhone and how they affect sales results.

"If this pans out, the iPhone could become our preferred device," says Peterson, who supports BlackBerry for Alticor's full-time employees. "We'll provide enhanced functionality [for the iPhone] as opposed to the normal functionality we'll provide via any mobile handset."

Alticor is among the largest companies to acknowledge publicly that it's launching an iPhone trial. While the vast majority of iPhone owners are consumers (many of whom presumably use their iPhones for business purposes as well), Apple has stated that it plans to capture a portion the business market now dominated by BlackBerry, in North America, and by Nokia devices running the Symbian operating system worldwide.

In a series of surveys prior to going forward with the iPhone trial, Alticor found that only 5-6% of its IBOs are currently using smartphones, including the iPhone. Most use basic cell phones for business purposes. But many of the distributors enthusiastically backed the idea of moving to the iPhone.

The response, says Peterson, was "overwhelmingly positive."