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iPhone Apps In The Works

Date: 1/29/2008 3:03:52 AM

Macworld may be over, but for a group of developers the most important Apple news has yet to be unveiled: the muchanticipated iPhone software development kit (SDK).

Developers say they cant wait to get their hands on the SDK, which is expected to be released in late February and will allow thirdparty developers to create native applications for Apples (nasdaq: AAPL news people ) iPhone. But developers are also anxious about how Apple may monitor and distribute applications. So far, Apple has been characteristically mum about its SDKrelated plans.

That hasnt completely stopped developers from trying to get apps onto the iPhone. Currently, the only Appleapproved way to get a program onto the iPhone is through a Web application that works on the phones builtin Internet browser. Hundreds of eager developers have designed such iPhone Web apps featuring games, news, even the weatheralthough there are firewall restrictions and other limitations that come with browserbased programs.

That’s left developers including John Atkinson, chief executive of Cincinnatibased startup PimpMyNews, keen to get Apples homegrown tools. Atkinsons team already offers an application that pulls news stories off the Internet and reads them aloud in a computerized voice. Build the same application with Apples tools, Atkinson figures, and not only will his program run fasterit might be able to communicate with other parts of the phone, such as the address book, and, say, enable forwarding an audio clip to friends.

Jonathan Zweig, who runs Los Angelesbased mobile entertainment firm Jirbo, agrees. Jirbos Web apps are megahits on the iPhone. JirboMatch, which jazzes up the familiar game of "Memory" with images of cartoon farm animals, is the most popular of more than 730 iPhone applications listed on Apples Web site. Five other Jirbo apps, including games that resemble "Tetris" and "Mahjong," also consistently rank in Apples top 10. Zweig says nearly a million people are playing Jirbo games around the world.

Despite his success with Webbased apps, Zweig plans to release SDK versions of Jirbos games. He says the ability to run the games on the phone will make them "richer and faster," with features like 3D animation. Currently, some users experience lags in gameplay depending on their network connection, he says.

Zweig will also continue offering Web apps. "It remains to be seen whether SDK apps will take off," he says.

But thats not his only question. Developers also fret about just how openand profitableapps developed with Apples SDK will be. The tension: Developers want broad distribution for their programs. Apple Chief Executive Steve Jobs worries about viruses. Protecting iPhone users from viruses, malware and privacy attacks, Jobs has said, is as important as providing an open platform to developers.

"We definitely want the SDK," says Christopher Allen, an entrepreneur who runs online developer community iPhoneWebDev. "But the real questions are, How is it going to integrate with iTunes? Are we going to be able to get paid? If so, how much? "

So far, iPhone Web apps have been offered for free and downloaded over the Internet. But developers believe Apple wants to monetize applications built with the SDK by pricing them at a few dollars, distributing them through iTunes and asking for a cut of revenue. Thats the way Apple handles other applications for its devices, such as games for the iPod.

A bogus version of Jobs Macworld keynote presentation that was leaked onto the Web in midJanuary has some developers convinced that Apple will take a 30% cut of revenues from SDK apps distributed through iTunes. Even though the speech was quickly revealed as fake, it did have some accurate detailswhich has improved its credibility among some developers.

Does that pit dollars against distribution?

Cabel Sasser, cofounder of independent Mac development firm Panic, calls iTunes "the holy grail of distribution." "It could open us up to an entirely new market and really change our business," he says. "Not everyone can locate, download and install software from the Internet," he points out.

But Raven Zachary, founder of developer conference iPhone Developers Camp, notes that shareware authors, for instance, prefer to give their software away. Zachary advocates keeping the Internet distribution model, in which users can download apps off the Apple site, developers sites or thirdparty sites, and adding iTunes as another option.

As the mobile app worlds gets more crowded, charging even a few dollars can sink even the most popular programs. About two months ago, Jirbo tried imposing a onetime $1.99 fee for its apps. Within hours, downloads slowed dramatically.

Four panicky days later, Jirbo junked the subscription model and turned to advertisingon the Jirbo site and embedded in gamesfor revenue. Zweig says the company is refunding people who paid. "Our philosophy is not to charge users," says Zweig. "If people cant get it free from us, they will get it from someone else."

Developers also wonder how Apple will approve and certify applications, and how deeply Apple will let them dive into the iPhone inner workings. Would, for instance, a VoIP or instantmessaging client be allowed, even though it could dent the profits of Apples telecom partner AT&T (nyse: T news people )? Would Apple ask developers to submit source code for verification? Would the approval process be lengthy and discourage amateur developers? Would developers have to repeat the process each time the iPhones software is updated?

Yet most developers agree on one point: Developing for the iPhone, which has sold 4 million units since its lateJune 2007 launch and quickly grabbed a leading share of mobile Internet traffic, is too great an opportunity to pass up.

"[The iPhone] opens up an unbelievable amount of opportunity for new ideas and gamechanging software," says Sasser. "Were chomping at the virtual bit … just counting down the days."

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