The iPad Boom: Good for Business?

By Michael Zoller, Esq.

According to a new national survey of owners and CEOs of small businesses conducted by the Business Journals, the use of the Apple iPad by businesses and their employees has nearly quadrupled in the past year.[1]  The results of the survey indicate that the usage rate of the iPad has risen from 9 percent in 2010 to 34 percent in 2011.  And to think, all of this increase occurred before Apple unveiled its “New iPad” on March 7th.  After only its first weekend of sales, Apple announced that the new iPad produced the strongest opening numbers of any iPad version, moving over 3 million units.[2]  Based on these initial sales of the new iPad and a discounted price for the older model iPad 2, it is only likely that this usage rate is going to increase going forward.

The survey cites owners’ and CEO’s desire for accessibility as the biggest reason for the iPad’s popularity.  Unfortunately, for any small business owner, this greater accessibility comes with greater responsibility.  While the iPad has many features and applications that can benefit a small business, it also raises many issues that any small business owner must be aware of in order to protect his or her business.

The first issue a small business owner faces when it comes to employees’ use of an iPad is ownership of the tablet.  If the business supplies the device for its employees, the business owner will have increased costs, but will also retain greater control over its use.  The alternative is for the business to allow its employees to supply their own iPad.  This approach will save the business the upfront acquisition costs, but might cost the business more in the long run if problems should arise.

With less control over an employee owned iPad, it will be harder for the business to protect any records or confidential information saved on the tablet.  If an employee was to leave the business, any information of this type could potentially leave with him or her instead of remaining with the business when the employee was forced to turn in a business owned iPad.

Of course not all issues a small business faces are related to who owns the iPad.  Regardless of ownership, the business could potentially face liability for its employees’ actions while using an iPad.  If the employee is using a business owned iPad or a personal iPad connected to the business’ wireless network, the business may be vicariously liable for any crime committed by the employee.[3]  The need to protect a business from liability then gives rise to other potential issues such as employee privacy concerns and what a business can have access to on an iPad that is potentially used for both business and personal purposes.  Additionally, if an iPad containing business records or confidential information is stolen, what will matter is not who owns the iPad, but what was done to protect the information.

With the iPad gaining more traction in the small business world, a business must be fully aware of all the potential issues the device presents and protect itself accordingly.  At a minimum, businesses should have an iPad user policy.  The policy can be similar to the Email and Internet policy the business already has and lay out in detail exactly what is and is not acceptable use of a business owned iPad or an employee owned iPad on the business’ network.  Additionally, there are special applications and software that can be installed to protect and/or wipe business or confidential information from the iPad in the case of theft or an employee leaving.

Based on current trends, the 34% usage rate is going to look like a low figure by 2012-13 alone, so it is best for any small business owner to get out in front of these issues now.  As long as the small business owner is aware of the potential risks and takes the appropriate steps to protect him/herself and their business, the iPad should be an effective tool for any small business.

[3] See Doe v. XYC Corp., 382 N.J. Super. 122 (App. Div. 2005)(court found employer can be liable for its employee’s involvement in child pornography via his work computer).

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