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    Default Apple Stops Short of Giving Developers iPhone Access (update 2)

    By Connie Guglielmo
    June 11 (Bloomberg) -- Apple Inc. Chief Executive Officer
    Steve Jobs stopped short of giving outside developers a way to
    incorporate applications into the company's iPhone handset.
    The shares fell as much as 3.5 percent after Jobs announced
    the decision not to give developers a kit that would allow them
    to write specialized programs for the iPhone. Instead he said
    they will be able to write Web-based programs that iPhone users
    can access through Apple's Safari browser.
    The move marks a compromise between Jobs, who wanted to
    keep control over the new device, and code writers who wanted to
    craft programs to run right on the phone and tap a booming
    business. Jobs expects to sell 10 million iPhones in 2008 to
    capture a 1 percent share of the mobile-phone market.
    ``Some developers will be disappointed that they won't be
    able to create specialized applications that run on the
    iPhone,'' said Gene Munster, a Piper Jaffray & Co. analyst.
    ``Instead these will have to be run through Safari.'' Jobs said the decision allows Cupertino, California-based
    Apple to maintain the security of the iPhone, the company's
    first mobile-phone, and yet still provides developers an
    opportunity to write new software for the device.
    ``We think we have a very sweet story for you,'' Jobs said
    today at Apple's global developers' conference in San Francisco.
    Apple shares fell $3.67 to $120.82 at 3:27 p.m. in Nasdaq
    Stock Market trading and dropped as low as $120.20. The iPhone
    helped propel Apple's market value above $100 billion last month
    for the first time in the company's 31-year history. The shares
    reached a record high of $127.61 last week.

    Look Alike

    Jobs, 52, at first said he wouldn't allow any access for
    developers and then hinted May 30 that he had changed his mind,
    saying at a conference he would ``find a way'' to let them add
    programs while keeping the iPhone secure.
    Apple today said developers will be able to create
    ``applications which look and behave just like the applications
    built into the iPhone.''
    Safari has 4.9 percent of the browser market, Jobs said
    today, behind Microsoft Corp.'s Internet Explorer and Firefox.
    To boost adoption, Jobs said the company will release a version
    for Microsoft's Vista and Windows operating systems.
    Apple says it has more than 750,000 developers, who have
    written more than 12,000 programs that use its Mac OS X
    personal-computer operating system. Sales of the PC have
    accelerated in the past two years, after Jobs delivered faster
    models with Intel Corp. chips and sleeker designs.

    Real Proof

    ``They're trying to make it easier for developers to create
    applications for the iPhone using basic Web development tools''
    instead of tools specifically created by Apple for the iPhone,
    Munster said. ``The concept is good, but the real proof will be
    in what kind of applications developers can create.''
    Apple will sell two models of the phone, a 4-gigabyte
    version for $499 and an 8-gigabyte model for $599, with help
    from AT&T Inc., the largest U.S. mobile phone service. The
    iPhone has a touch-screen display instead of a physical keyboard
    and lets users surf the Web and access e-mail from services
    including Yahoo! Inc. and Google Inc.
    The iPhone will compete with so-called smart phones such as
    Research In Motion Ltd.'s BlackBerry, which sells for as little
    as $200 with a two-year AT&T service contract. The BlackBerry
    offers Web access and can also link to corporate e-mail systems,
    a feature the iPhone lacks, said Rob Enderle, president of the
    Enderle Group research firm in San Jose, California.
    ``If you open it up to third-party developers, then it can
    go beyond just being a music and video phone and become a true
    smart phone,'' Enderle said of the iPhone.
    The company in April reported that second-quarter profit
    soared 88 percent and sales beat analysts' estimates after
    demand for Macs and iPods surpassed expectations.

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