Join the Mac|Life staff as we report live from Apple headquarters. The iPhone OS event should showcase what to expect in the next version of the iPhone OS.

The live blog IS LIVE right here or you can join us on Twitter for up to the minute updates. The photo server is having issues right now. We'll have photos up ASAP!

That's it folks. Thanks for jioning us. 

11:04AM: Press Q&A up next.

Usual questions answered:

No Flash

The iPad will run the OS in the Fall* along with the iPhone 3GS and latest iPod touch. 

*Our live blog originally said summer. We biffed that, sorry. It's fall.

Q: Revenue opportunity with iAds, will it move the needle for Apple?

Jobs: We're giving the majority of the revenue to developers, which is why we're doing this. It's not a get-rich-quick scheme for apple. it's a help-our-developers-make-money scheme.

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Q: Palm and Android have deep options to run unsigned applications. Any plans to do that? Why not?

Jobs: There's a porn store for Android. And that's a place that we don't want to go. So we're not going to go there.

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Bloomberg: Now that the iPad is out, anything surprise you about the initial reaction so far?

Jobs: Lemme take a crack at that. Even though we've been using these internally for some time, working on it a few years, we still have butterflies in the stomach. The few weeks before, the night before an introduction and launch -- you never really know until you get it customers hands and they tell you what they think.

The feedback we've had is off the charts. People get it. We think this is a profound game changer. We think that looking back years from now this will be a major point in the history of computational devices.

It's amazed me how quickly people got it. Mossberg's very bright and spends his days thinking about these things. But I've gotten thousands of emails from [regular people] telling me how much they think this product is going to change their life and what they do. It's been very gratifying that people are getting it very quickly.

Schiller: It's not surprising that people get it, but it's the speed in which that's happening. Developers are doing incredible things with it, and that leads back to customers. The pace of this is beyond belief.

Jobs: If our competitors ever realease a product to compete, they'll be hoping they can get to 3500 apps in the first year. We have 3500 in less than a week. It's standing on the shoulders of -- there's 85 million people out there who already know how to use it because they use an iPod touch or an iPhone. So they're taking to it like a fish in water.

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Gamasutra: didn't mention how the App Store might change with 4. discoverability and organization are a problem. any thoughts?

Jobs: A few things. 1. The App Store is not part of iPhone OS 4 or any iPhone release. It's a service mostly programmed on the server side. So we can enhance it without waiting for a major release. So we're constantly interested in improving that. And do so fairly frequently.

I also see an infrastructure starting to evolve to help users find apps. The store with the relatively small window of a screen can only do so much. Different websites and publications do apps of the week and things like that. I see infrasturcture outside the iPhone thorugh difeent mediums taht provide recommendation for users.

Forstall: Game network will help viral spread of games. They also added gifting in iPhone OS 4 too.

Schiller: We do more to promote apps than any other company in the history of software. (tv, billboards, etc.)

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Dow Jones Market Watch: Any concern on leaving out customer base with the multitasking? Or will they upgrade?

Jobs: The 3GS has been a huge hit. And the iPod touch sales curve really accelerated over the last year. So a lot of the produts in the install base are the most recent products and they're really going to love the update. Users of the older products are going to love the update too but miss out on some of the stuff like multitasking. and if that gets them to upgrade, that's terrific.

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Q: how do you CLOSE applications? Game Center and iAd, can devs still use alternates?

Jobs: Yes to the second, in both cases.

Jobs: If you want to kill an app, you don't have to.

Forstall: The user doesn't need to be the custodian of the applications. We do that for them. The user doesn't really need to worry about that at all, which we think is fantastic.

Jobs: It's like we said on the iPad. If you see a stylus, it's the wrong product. If you see a stylus, they blew it. With multitasking, if you see a task manager, they blew it. Users shouldn't ever, ever have to think about that stuff. That's our philosophy anyway.

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11:03AM: Users will get it this summer. iPhone 3GS and iPod touch 3rd gen will run everything in it. iPhone 3G, iPod touch 2nd gen WON'T SUPPORT MULTITASKING. "The hardware isn't capable." He didn't mention if iPod touch owners will be charged a fee

11:02AM: 1. Multitasking. 2. Folders 3. Better Mail 4. iBooks. 5. Enterprise 6. Game Network preview. 7. IAd. Plus 100 new user features, and 1500 new developer APIs. Available for developers today at developer.apple.com

11:00AM: Uses a Target ad's "room builder" to outfit his imaginary dorm room. "I'm a dude who's into music and I go to Michigan." Heh.

10:59AM:  So these are pretty big shots at Google (saying Web ads aren't emotional) and Adobe (using all HTML5). They're subtly making the point that devs should use these technologies if they want the best access to Apple's massive user base.

10:58AM:  They made another example for Nike Air Jordan. Video featuring Dywane Wade. Gallery of historic Air Jordans. Not bad for an ad.

10:57AM: Shows off the games and videos and posters. Tap to make it your wallpaper. "Users like free stuff."The theater listings are location-aware. Link to download an App Store game from right within the ad, not launching the App Store.

10:56AM: He "explores" the Toy Story ad. It's got character sounds, videos, games, posters, theater listings, and downloading.

10:54AM: Toy Story 3 banner. "I've seen it. It's REALLY GOOD." Ads can have video, animation. "All this stuff is done in HTML5, by the way!"

10:53AM: Apple will sell the ads and host the data. Developers get 60 percent of the revenues.Demo: They've made some ads for "a few brands that we love." Claims the companies haven't even seen them. Oh look, Pixar!

10:52AM:  Nobody clicks on ads that they know will launch Safari. But iAd is in the iPhone OS itself, so it puts the ad content right over the app. Users can return at anytime.

10:51AM: And they want to increase the quality of the ads. "They're not capable of delivering emotion" as on TV. That's why ad $ goes to TV. They want the emotion of TV and the interactivity of the Web. But you know, way better. The ads keep you in your app

10:50AM: So if they put an ad up every 3 minutes (PLEASE DON'T), that's 10 per day per device. That's 1 billion impressions a day.

10:49AM: On a desktop, search is king. On the iPhone, people get data from apps. So iAd will deliver advertising not on search, but on apps. Average user spends 30 mins a day using apps. 

10:48AM: Steve's back with No. 7: iAd. iAd is Apple's mobile advertising service. So Apple is KIND ENOUGH TO TAKE OVER.

10:47AM: Worldwide leaderboards. Achievements. It's a preview in iPhone OS 4, and it's "available for everyone later this year." No demos shown, just some screenshots.

10:46AM: The Big Sixth one: Game Center. 50,000 game & entertainment titles in the App Store today. Social gaming network allows you to challenge friends to games (they'll get a notification), automatic matchmaking considering ability.

10:45AM: Mobile Device Management. Your IT guy can manage iPhone deployment. Wireless app distribution. Support for multiple Exchange accounts, and for Exchange Server 2010. SSL VPN from Juniper and Cisco.

10:44AM: Scott gets No. 5: Enterprise features. 80% of Fortune 100 companies are using iPhones. (that's 80 companies for the math majors out there.) Better email encryption. Devs can encrypt data inside their apps.

10:43AM: Buy an iBook once and you can read it on the iPad or iPhone. Wirelessly syncs your page, like the Kindle. Free Pooh, too.

10:42AM:  Tentpole #4: Adding iBooks to iPhone OS 4. Looks just like it does on the iPad. Same iBookstore too. (OK with everyone if i stop calling them tentpoles? It's a little Wayne's World.) Schwing!

10:41AM: You can open attachments in other apps, such as OmniGrafle.

10:40AM: Tentpole #3: Mail. Unified inboxes. Hallelujah. We just complained about this re: the iPad. Support for multiple Exchange accounts, too. Fast inbox switching, with just one or two taps. Ray just cried a tear of joy. Organize messages into threads, Gmail style. Oh, nice.

10:39AM: Folders increases the number of apps you can see on your phone's home pages to a MAX of 2,160. Oy.

10:38AM:  You can change the wallpaper on home screens, have you heard? (They've mentioned it three times already.) Lock screen and home screen wallpaper work just like on the iPad.

10:37AM: Folder is auto-named based on the genre of the apps. Tap to expand, tap an icon to launch. Pretty easy and cool looking. You can dock folders too.

10:36AM: Steve Jobs: "Our second tentpole. This is one where we got a lot of requests -- folders." You can organize your apps into folders on the home screens. Demos it by making a Games folder. Just drag one app icon over another and it makes a folder.

10:35AM:  Fast-app switching: No need to relaunch the app, restore the state. Everything has been preserved as it was.

10:34AM:  Task completion. You can start a Flickr upload, then leave the Flickr app and your upload continues in the background. Local notiications: another kind of push.

10:33AM: Push notifications: Super popular. 10 billion notifications pushed in the last 9 months. Third party server sends notification to Apple, who sends it to your phone. One connection to the phone (just Apple's) = less power needed.

10:32AM:  Privacy concerns? iPhone OS 4 goes further with a GPS indicator in the status bar, plus fine-grained per-app GPS settings. You'll be able to see a list of all apps that have asked for your location in the last 24 hours. Good thinking.

10:30AM: But social locating apps (Loopt) need GPS in the background, and that will kill your battery. Solution: Cell towers. Your phone knows you've switched cell towers, meaning you've moved. It wakes up the app and tells it that you've moved.

10:29AM:  Next service: background location. Useful for turn-by-turn direction apps like TomTom. Now TomTom can read directions right over your iPod music.

10:28AM: Skype call stays open and tappable at the top of the screen. Pretty neat, makes Skype on the iPhone a lot more convenient.

10:27AM:  Skype demo: Starts in the app, goes to DoodleJump. Popup window appears for a new Skype call. 1-tap answering. On the call, opens OpenTable.

10:26AM:  You can receive Skype calls with the phone locked. Wow, that could unload a lot of AT&T calls. That calls for another Woohoo!

10:25AM:  Next service: VoIP. "Skype connects one out of 9 international phone calls on the planet," says Forstall. Yup, it runs in the background too.

10:24AM: Shows going to Safari and browsing, which also uses WiFi of course. No visible slowdown. Keeps playing when he locks the phone. Lock screen controls work great.

10:23AM: Pandora: "The day we launched on the iPhone, everything changed. ... Our growth rate doubled overnight."
Took the Pandora developers only one day to make it background aware. 

10:22AM: You can even use the iPod controls on the lock screen to control Pandora when it's running in the background. Now a demo:

10:20AM:  Apple providing developers with 7 multitasking services. First, background audio. Yes, @thatguyinMS, you can run Pandora in the background. WOOHOOO PAndora!

(he just asked on Twitter. it was uncanny. Scott just answered him.)

10:19AM:  To explain how that work while not killing battery or performance, here's senior VP of iPhone software Scott Forstall.

10:18AM: Steve Jobs is not great at Tap Tap Revenge. Going to a game gives you a 3, 2, 1 countdown before unpausing so you can get ready.

10:17AM: Demos it on an iPhone. First launches Mail. Opens a message. Clicks a link, which launches Safari. Double-click the Home button to see all running apps in a popup at the bottom. Click an icon to go back to that app.

10:16AM: "We weren't the first to this party, but we're going to be the best." Goals were to not drain battery life or reduce performance of the foreground app. 

10:15AM:  Also change home screen wallpaper. Spell check. CardDAV, Nike+ workout uploading... 7 big features today. NO. 1: MULTITASKING

10:14AM:  Users can now create playlist, cam app has 5x digital zoom, tap-to-focus video, Places in Photos, BT keyboards(!!!).

10:13AM:  Devs can now use in-app SMS, calendar access, still and video cam data access, quick look, 1500 new APIs

10:12AM: iPhone OS 4.0 "We're going to ship it this summer and release a developer preview today."

10:11AM: "And where would we be without an accordion?" OMGOSH I KNOW. ASK MY COWORKERS. US Mobile Browser Usage: iPhone has 64%, Android 19%, BlackBerry 9%, Other 8%. Everything else is half the iPhone. 50 million iPhones sold to date. Plus 35 million iPod touches. "If you're a software developer, that is a plum market to go after." Mmm, plum.

10:10AM: "Of all the futuristic magazines out there, Popular Science is king of the hill. These guys did something that's really breakthrough."

10:09AM:  Steve digs Epicurious. "It's teaching us all how to...make food." Also hearts IMDb and ABC Player. (ABC, Playa!)

10:08AM:  3,500 iPad apps in the store. Starts showing screenshots: Scrabble, Labyrinth, Toy Story books, racing games...

10:07AM: App Store! 4 billion apps downloaded to date. 185,000 available in the Store.

10:06AM:  1 million iPad apps downloaded in the first 24 hours. 3.5 million as of today. Shows a photo of a cute girl in an Apple Store opening and hugging her iPad. Aw, what an adorable little consumer!

10:05AM: Ed Baig of USA Today said it's not what the iPad can do, it's how you can do it. On Saturday, they sold 300,000. As of today, 450,000. 250,000 iBooks downloaded on day 1. 600,000 as of today.

10:04AM: lights down, Steve's here - First news: Well, the iPad shipped on Saturday. It's been getting good reviews. He quotes non-puppet Walt.

10:00AM: In the hall