When Steve Jobs introduced the iPhone in his January 9, 2007, keynote address, he called it “a widescreen iPod, mobile phone, and Internet communicator.” And it was. Later in the speech, he explained that it ran a version of Mac OS X, designed for “desktop-class applications.” And it did—but the iPhone only used the applications that Apple chose to build into its firmware. Developers could only write apps to run in the
Web browser, or be installed on hacked, or jailbroken, iPhones.

 

But on March 6, Apple announced the beginning of the iPhone Developer Program, which includes a software development kit (SDK). And in June 2008, Apple unveiled iPhone 2.0, a software update featuring the App Store, which will make adding new programs wirelessly to an iPhone as easy as buying a song on iTunes. Now the iPhone can start to blur the lines between smartphone and handheld Mac. And just like your Mac, your iPhone can be a game system. A way to keep in touch via voice, text, mail, and now chat. And, after addressing the needs of enterprise customers with the 2.0 update, an indispensable work buddy.

 

While the true potential of iPhone 2.0 may not be evident until the update is released this June—when the App Store will open its virtual doors and third-party applications will be able to take advantage of the iPhone’s power and capabilities—we got a glimpse of what’s to come by talking to the software engineers the SDK is written for. Will the iPhone become a true computing platform, like notebooks and desktops? It could. And that means Apple is about to change everything—again.

 

The SDK: Apple Giveth, and the Apple Taketh Away
With the iPhone SDK, Apple has finally given wannabe iPhone developers the very thing they’ve wished for—well, almost.

 

When Apple honchos Steve Jobs, Phil Schiller, and Scott Forstall took the stage in Cupertino for the company’s iPhone Software Roadmap presentation, it wasn’t exactly Mao, Nixon, and Kissinger announcing the opening of China to the West. The March 6 presentation was, nevertheless, a highly anticipated event in the ongoing story of Apple’s latest and perhaps most revolutionary creation.

 

The iPhone made an immediate impact on mobile communications, grabbing 20 percent of the smartphone market in less than a year, but users and software developers alike immediately clamored for more. Applications that could be loaded onto the phone to personalize it and extend its functionality would be necessary to ensure the gadget’s place in the Hall of Coolest Inventions Ever. The company’s initial position, however, was that third-party applications could run within the Safari browser only. That, combined with the phone’s exclusive service and distribution agreements, did little to dispel the public perception of Apple as a secretive, inscrutable force determined to control the use of its invention.

 

Farhad Manjoo, author of the Machinist blog on salon.com, was an early critic of the iPhone’s buttoned-up aspect, writing last June, “What you have is a brand-new kind of machine, a fully functional general-purpose computer in your pocket. But because Apple has (so far) prohibited third-party development on the phone, it’s a stunted general-purpose computer, one that depends on a single, specific company for its every innovation.”

 

This presaged a frantic quest by outside programmers to jailbreak the iPhone, both to use it with cellular providers other than AT&T and to install native applications. Within weeks of its public release, the AT&T SIM lock had been hacked and the phone could then theoretically be used to make calls on other cellular networks. According to Apple COO Tim Cook, as reported in an article on TMCnet in October, more than 250,000 of the 1.4 million iPhones sold up to that point had never been activated for service with AT&T. Then, through an exploit in the phone’s Safari browser, by fall 2007, users were able to download Installer.app to get third-party applications onto the device.

 

But jailbreaking your iPhone is risky. Even intrepid early adopters worried about bricking their phones, since installing any of Apple’s subsequent firmware updates could turn a hacked iPhone into a shiny, warranty-voided, overpriced paperweight. It was clear something had to give.

 

Was the SDK something Apple had planned all along, once the installed base had grown and any security or performance issues had been ironed out? Or was the announcement a response to the firestorm of hacking and criticism? Apple won’t say, but when asked in the event’s Q&A session whether this meant the company had changed its mind, Jobs responded, “We change our minds a lot. The Web apps have worked well, but developers wanted to do more. And we heard that.”

 

In an interview after the SDK launch, Manjoo said, “I think it will be a huge thing now that other companies can make iPhone versions of their programs available.” Merely permitting outside application development for the iPhone doesn’t promise the development community clear skies and smooth sailing, however.

 

Despite a round of impressive application demos at the launch event and general agreement that the roadmap moves the iPhone in the right direction, Apple’s still the ultimate gatekeeper, of both the still-in-beta official developer program and, eventually, of what applications are offered for sale in the App Store, aka The Only Legal iPhone App Store, Period.

 

Developers wishing to pique the interests of iPhone users must pay Apple a $99 fee for an official iPhone developer digital certificate, and Apple must approve their finished creations before they can be offered in the App Store, an iTunes- like application on the iPhone’s home screen that markets, sells, and distributes iPhone apps.

 

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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.

 

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Calling iPhone Gamers
Developers and gamers alike see a world of potential for getting your game on, iPhone style.

 

Freeverse plans to release touchscreen-enabled sports games, as shown in this concept art.

 

Mobile phone games—often just called “mobile games”—are an industry built on impulse. You often pay little and get little in return. But a lot of people splurge, with Nielsen Research saying that 20 million Americans downloaded games in the fourth quarter of 2007. That compares to 93 million people playing on a dedicated console. But many game makers see the iPhone leading a surge in mobile games, and they want to get in early.

 

To find a list of game companies working on iPhone games, just look at a list of game companies. Almost every plausible publisher we contacted is developing iPhone products. And the few who wouldn’t comment publicly on iPhone plans seem to be waiting to make announcements.

 

Freeverse plans to release touchscreen-enabled sports games, as shown in this concept art.

 

Electronic Arts, one of the biggest video game publishers in the world, is preparing an iPhone version of Spore, among other games. With an anticipated September 2008 release, right alongside the Mac version of the game, iPhone Spore will likely be a condensed edition of that life-simulating romp. EA wouldn’t confirm details, but based on what we saw at Apple’s SDK press event, iPhone Spore will likely focus on Spore’s first stage, where your creature swims around, eating or avoiding enemies. The game uses the iPhone’s motion-sensing accelerometer to fluidly steer the spore as the player turns and rotates the phone in midair. And gamers use fingertip touches to upgrade their creatures, dragging to rearrange the body parts or add new ones.

For the same press event, Sega created a demonstration version of Super Monkey Ball. In this console video game hit, players roll a monkey-occupied sphere through 3D mazes, racing past traps and precarious ledges. Simple iPhone tilts steer the critter around hazards in this version. Sega hadn’t announced its plans as we went to press, but given how good Super Monkey Ball looks, we fully expect to see a complete release.

 

Casual gaming company PopCap Games is also creating iPhone titles. This Mac-and-mobile mainstay is responsible for Zuma, Peggle, and many other popular titles. Andrew Stein, director of mobile business development, explains how the company first dabbled on the device, saying, “A bunch of people here got iPhones, and they just personally wanted Bejeweled available for it.” So in July of 2007, PopCap launched an iPhone-formatted online version that can be reached through its website. “The response has been phenomenal—light years beyond anything we expected,” Stein says. “We are currently running nearly three quarters of a million unique visitors a month to popcap.com on the iPhone and iPod touch browsers.”

 

And the list of traditional mobile developers goes on. Gameloft promises 15 iPhone titles before the end of 2008. id Software, creator of Quake and Doom, is considering an iPhone version of its mobile game Orcs & Elves, as well as “a completely original title specifically for the iPhone,” according to Technical Director John Carmack. Namco Networks is readying Pac-Man and Galaga updates. Others, including THQ Wireless, admit they’re working on iPhone products but haven’t announced specifics.

 

Freeverse plans to release touchscreen-enabled sports games, as shown in this concept art.

 

Mac developers are also eager to join the iPhone game, and many of them are excited to reach a new market. Ian Lynch Smith, president of Freeverse, says, “How many Macs are there now, like 38 million? They’re going to have 10 million iPhones at the end of this year, and they could easily have 50 million in three years.” Freeverse hopes to release a few products with the June launch of the App Store, including a driving game and some simple sports titles.

 

Peter Tamte, president of MacSoft parent company Destineer, also sees a huge iPhone audience. He comments via email, “We view the iPhone as a mobile software platform. The huge number of applications and games coming will make the iPhone a sustainable, long-term opportunity. You bet we’re going to make games for iPhone!”

 

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Gaming Power
Get ready for console-quality games in the palm of your hand.

 

The iPhone supports established game-creation devices, including OpenGL and OpenAL, which are tools that help developers build 3D graphics and audio, respectively. Most of all, the technologies are already familiar to typical game developers, so some of their experience translates to the new device.

 

Mac companies will also have a slight advantage in game creation because the platform is so close to the desktop OS. Smith notes, “It is pretty much OS X. It’s a Mac at heart. That’s a tremendous value in terms of the development tool chain, its maturity, and robustness.” Smith cautiously ranks the iPhone’s hardware power as somewhere between the Nintendo DS and Sony PlayStation Portable.

 

But Carmack goes further, saying, “The iPhone is significantly more powerful than both the Nintendo DS and Sony PSP, and the OpenGL acceleration looks pretty solid.” Carmack has just begun testing the hardware, adding, “We’ll see how it holds up when I really start leaning on it, though.”

 

Ethan Einhorn, producer of Sega’s Super Monkey Ball, agrees that the hardware is far beyond a typical phone. Showing a demo of the game at the iPhone SDK launch event, Einhorn said, “This is not a cell phone game, this is a full console game. And if anything, we underestimated what the machine was able to do graphically from the start. We had to actually fly in an extra artist to start scaling up the quality of the visuals to match what the output was capable of giving us.”

 

Ed Allard, vice president of PopCap’s strategic development, thinks the iPhone’s power is also in its interface. He says, “The Nintendo DS has had a touchscreen for a while, and proved it can be great for gaming, but bringing multitouch in is something new and interesting.” He also notes that PopCap is exploring ways to enable motion control in its games, as well as taking advantage of “the camera, pictures, address book,” and other user data.

 

Since iPhone owners haven’t been able to easily download games, they’ve been clamoring to Web-based titles. Mark Donovan, senior analyst with research firm M:Metrics, says, “iPhone owners are much more likely [than other phone users]—by about an order of magnitude—to be playing games on their browser.” We’ll soon find out if these gamers and iPhone developers can connect with downloaded software. But based on the demo games shown at the launch event by Electronic Arts, Sega, and even Apple itself, the future looks bright.

 

One-Stop App Shopping

When Apple announced the distribution model for these upcoming applications, an iTunes-like virtual shop called the App Store—which will be on the home screen of every phone, and will effectively handle distribution, sales, and marketing for the developers in exchange for 30 percent of revenue of all nonfree applications sold—the company actually came under fire from some who thought the plan was too restrictive and gave Apple too much power. But the developers we spoke to disagreed. Here’s what they’re saying about the one-stop App Shop:

 

“The 70/30 revenue share allows the publisher to invest their money into doing what they do best, which is make games, but also allows Apple enough revenue to keep things running. It’s a win-win situation for everyone involved.”
—Gonzague de Vallios, senior vice president of publishing, Gameloft

 

“I think the App Store will help significantly in the ‘discoverability’ of new iPhone games.”
—Andrew Stein, director of mobile business development, PopCap

 

“A 70 percent royalty deal for apps over iTunes is quite good. The iTunes distribution channel is really a more important aspect than a lot of people understand.”
—John Carmack, technical director, id Software

 

“The revenue share is totally worth it from the direct marketing Apple will provide, and the unique marketing only they can provide. I think it’ll be great for Freeverse, we’re going to be right out there on the forefront.”
—Ian Lynch Smith, president, Freeverse