Apple unveils App options in iPhone software peek

CUPERTINO, California Wed Mar 18, 2009 1:21am EDT

1 of 8. Scott Forstall, senior vice president for iPhone Software, discusses the new cut, copy and paste application of the iPhone OS 3.0 software at Apple Inc. campus in Cupertino, California March 17, 2009.

Credit: Reuters/Robert Galbraith

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CUPERTINO, California (Reuters) - Apple unveiled new software for the iPhone that will support some long-anticipated features, such as copy-and-paste of text and picture messaging, as the company pushes to stay competitive in the phone market.

Apple also gave its vast network of software developers a slew of new options for upcoming applications, such as support for subscription models and automatic alerts, a move applauded by analysts.

"They've taken a few more steps ahead of the pack in the race," said CCS Insight analyst John Jackson, adding that, in spite of the omission of certain features until now, the iPhone was still the most high-profile cell phone.

"Two years on they still have the cool phone and business model that everybody's talking about and trying to emulate."

While Apple's touchscreen inspired many imitators, some users complained it lacked functions common in other smartphones such as multimedia messaging and the ability to copy and paste text.

Such features already exist on rival devices such as the BlackBerry from Research In Motion Ltd and Treo from Palm Inc and phones based on Windows Mobile from Microsoft Corp. iPhone is central to Apple's plans, as growth in its Mac computer and iPod music player businesses slows.

On Tuesday, Apple -- represented by iPhone software senior vice president Scott Forstall, as Chief Executive Steve Jobs is out on medical leave -- lifted the veil on iPhone 3.0 software with 100 new features, including some long-wished for updates.

An early version of the software is available to application developers today and will be available to consumers this summer. IPhone users will be able to download the software upgrade for free, while iPod touch customers will be charged $9.95.

The updated software kit for developers will have more than 1,000 new programing functions, including peer-to-peer capability, an interface allowing applications to communicate with iPhone accessories such as docking stations, as well as access to the phone's music library.

Analysts said that while most the of software updates were long expected, improvements to the developers kit could help increase revenue made from applications.

Gartner analyst Van Baker said the message of the event was clearly targeted at the developer community. He expects the new development kit to enable third-party vendors to create better and more expensive applications.

"This is a pretty significant release ... it will certainly help to drive commerce," Baker said.

NEW APP FEATURES

The next-generation iPhone operating system will enable so- called push notification, allowing developers to build applications that can provide automatic alerts of items such as sports results or the arrival of an instant message. The alerts would show up automatically even if the user is in another application.

It will also allow developers to offer subscriptions and sell content within their applications.

In addition, a peer-to-peer capability will enable iPhone users near each other to interact for features such as gaming.

Apple also promised multimedia messaging capability with the new 3.0 software, allowing users to send each other photographs from the phone.

On top of that, the company unveiled a widely anticipated universal search feature called "spotlight," which can scour key applications on the phone such as e-mail and iPod.

Apple, which sells iPhones in 80 countries, said Tuesday consumers had already downloaded 800 million iPhone applications from its store, which offers 25,000 applications so far.

Apple said it will expand its App Store to 77 countries from 62.

Apple declined to comment when asked about plans to release a netbook computer or a new iPhone model. Many analysts expect to see a new iPhone this summer, while some speculate Apple will also introduce a stripped-down version for as little as $99.

Apple's second-generation, 3G iPhone was an immediate hit when it was released last July. The company sold a total of 13.7 million iPhones in 2008, topping its 10 million target.

The iPhone App Store has become something of a consumer phenomenon, helping boost interest in the device. The store features a wide array of applications, some for free and some for a fee. Under Apple's model, 70 percent of the revenue goes to the developer.

"What they did with this blew us away," Forstall told the audience, referring to the applications developers.

Apple shares closed up $4.24, or 4.4 percent, at $99.66 on the Nasdaq.

(Writing and additional reporting by Sinead Carew; Editing by Edwin Chan and Tim Dobbyn)

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