Takin’ Care of Business
Somewhat lost in the hoopla surrounding both the excitement and frustration over the SDK—but clearly not lost on Jobs or Schiller since they led the March 6 iPhone Software Roadmap presentation with it—is the iPhone’s potential in the enterprise field and the bead it’s drawn on the vast market currently dominated by RIM’s BlackBerry and the Palm Treo.

Specifically, the new iPhone 2.0 software will include Microsoft Exchange ActiveSync support for push email, contacts, and calendar events, meaning that all changes can be synced immediately between the Microsoft Exchange Server and your device. Other improvements requested by business customers, including tighter encryption, more VPN protocols, and the ability to remotely wipe data from a lost or stolen phone, are also coming with the update.

But some business users remain skeptical. San Francisco–based author and Mac consultant Toby Malina thinks of herself as an early adopter when it comes to technology, and she generally sings the praises of Apple and the Mac, but she still loves her Treo. “I see my phone as a tool, not a toy,” she says, and will likely not switch to an iPhone, at least until it allows her to copy and paste text, a missing functionality that many feel is crucial to the phone’s ultimate success.

This $99 iPhone Developer Program, while still in beta, has so far been less than seamless, with many developers being forced to wait weeks to have applications accepted or wait-listed. As of late March, the company was issuing notices that the beta program for developers had been oversubscribed. But development continued right along, since the SDK beta itself is freely available and developers can test their work on an iPhone simulator.

However, Tom Harrington, who works with the Mac development company Atomic Bird notes, “The simulator is nice, but it’s not the same.” Once accepted into the official program, software designers receive permission to test software on up to five iPhones, but until then, Harrington says, you’re at a disadvantage: “If I don’t hear about an iPhone developer key soon, I may have to jailbreak, at least temporarily, just to keep making progress on my apps.”

As the sole distribution outlet for sanctioned applications, the App Store allows Apple to screen programs for malware and other defects that could harm users’ devices or create problems on the cellular network, but some see it as further evidence of the company’s desire to retain control over the way its customers use the product.

Paul Kafasis, CEO of Rogue Amoeba, points out anomalies in Apple’s approach to development for the iPhone. “With the way things are on the Mac, you can install any software you want. That software can do pretty much anything it wants, and Apple doesn’t have any real control over it,” he says. But with the iPhone, “they are acting as the exclusive gatekeeper; they are making decisions for you and everyone else. What we’re looking for is the ability of owners of the iPhone to say ‘I want to use this software that Apple doesn’t necessarily approve of.’”

Eric Chamberlain, CTO of RingFree, a Bay Area company that offers a Web-based app for making and receiving VoIP calls over AT&T’s cellular network, adds, “The SDK is a bit disappointing. Apple claimed the SDK is the same as what their developers use, but applications can’t run in the background, and low-level phone-access functions are missing.”

Indeed, Apple’s “one app at a time” restriction, which prevents software from accessing data stored on the phone, hamstrings other programs. Rogue Amoeba’s customers, for example, would like to see a version of its Airfoil app that would enable users to push the music stored on an iPhone through an AirPort Express to a user’s home stereo, or movies from the phone to an Apple TV.

Erica Sadun, a Denver-based developer who has been accepted into the iPhone Developer Program, acknowledges that “one of the things that was really driving a lot of the community to push for native application development was a need to have persistent data available to an application at all times. People are just dying for the combination of portability and data, and the things that make the iPhone a really exciting platform—connectivity with friends, and not just through calling them. But things like Apollo IM, which has been developed using the jailbroken software development kit, can no longer run under the official developer kit.”

As Rogue Amoeba’s Kafasis says, “Apple’s made this great device, but their interests don’t necessarily align perfectly with their users’. We don’t feel they should have that role, or give themselves the role of being the arbiter of what will be on the iPhone.”

Apple’s phone, Apple’s rules. Whether the big winner turns out to be Apple, the developers who now have a chance to make their mark on this new mobile platform, or the end users themselves—or, quite possibly, all three—remains to be seen. This June’s Worldwide Developers Conference should hold some exciting glimpses at the future of iPhone development, leading up to the release of the iPhone 2.0 software upgrade.

iFund: Big Money for a Small Phone
John Doerr may have been the first guy to announce a $100 million investment initiative while wearing a T-shirt and hoodie. Doerr joined equally casual Apple executives at the SDK launch event to express his admiration for the can-do spirit of American entrepreneurship and back it up with the commitment of his venture capital partnership, Kleiner Perkins Caufield & Byers. The iFund will seek to invest in companies that, as Doerr put it, are going to “invent the future” on a platform that KPCB believes is “bigger than the personal computer.”

Matt Murphy, a managing partner for the iFund, says that KPCB will “work closely with companies, in collaboration with Apple” to develop new products—“not just apps ported from the Internet”—in areas related to social networking, mobile payments, entertainment, health, and the enterprise. As of this writing, the iFund has invested in one company, Seattle-based Pelago, which will launch Whrrl, a location-aware program that helps you find places, events, and people when you’re on the go.

Pelago spokesman Darren Vengroff points out that his company had been working with KPCB for some time prior to the announcement of the iFund and had actually closed its initial round of funding well before the March 6 SDK event. Vengroff says that while the iFund’s partnership with Apple is by no means a “back door into getting some secret level of internal support that no one else can get,” the fund will be looking for “teams with innovative apps that KPCB is already convinced have the resources to actually deliver on their app.”

Some developers are underwhelmed by the lure of the iFund. Tom Harrington, an independent software engineer, says, “The iFund seems totally irrelevant to me. I’ve been developing apps on my own for several years now without venture capital backing, and I don’t see any reason that the iPhone would change that.”

Whether or not developers see the iFund as a ticket to start-up heaven, its very presence is testimony to the potential wealth that Silicon Valley sees in the future of mobile computing.