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

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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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