Apple to give outsiders access to its iPhone

Times Staff Writer

Trying to blunt two criticisms of its iPhone, Apple Inc. on Thursday said the device would soon work with corporate e-mail services and run software applications made by outside developers.

“Apple has significantly expanded its total available market,” said Van Baker, a vice president at Gartner Industry Advisory Services. “The second stage of the iPhone kicks in because of this.”

The company plans in June to launch an online store for iPhone applications such as video games, instant messaging and business programs. To encourage development, venture capital firm Kleiner, Perkins, Caufield & Byers launched iFund, a $100-million fund to invest in companies working on software for the combination cellphone, Web gadget and media player.

Apple has sold 4 million iPhones in the U.S. and Europe since the device went on sale in June. But businesses have been slow to embrace the iPhone, primarily because of concerns about security and because it hasn’t worked with Microsoft Corp.'s popular corporate Exchange e-mail service. Many iPhone owners also carry another device, such as a BlackBerry or Treo, for corporate e-mail.

A free software update will add Microsoft Exchange to iPhones in late June.


At the same time, iPhones will get a new icon called the App Store, where users can buy and download new features. Apple on Thursday posted on its website an early version of its software developer kit, which programmers can use to make new iPhone features.

Software developers will set their own price. Apple will take a 30% commission.

Chief Executive Steve Jobs said Apple would vet the programs it sells through the store, to avoid distributing pornography, viruses, illegal software and applications that use too much bandwidth. Apple will let developers make software for placing Internet phone calls, Jobs said, as long as they use Wi-Fi networks and not the cellular network of its partner, AT&T; Inc.

“We are sending customers a message and developers a message that we want to meet their needs,” Jobs said.

The application store should help reduce gripes that the iPhone has been a closed system. Software developers have been able to create programs that work only with the iPhone’s Web browser. Apple recently gave users the ability to add icons from outside developers on the home screen of their iPhones, but developers couldn’t tap into the iPhone operating system to create more powerful programs.

“A lot of people were worried that Apple would constrain the development of the applications and limit it to only the biggest partners, as they have done for the iPod and games,” said Raven Zachary, a technology industry analyst with 451 Group. “They are taking a route more like the Macintosh. . . . There will be a birth of a whole new development community.”

The same release will be available for the iPod Touch, which connects to the Internet via Wi-Fi, for a fee.

Apple shares fell $3.56, nearly 3%, to $120.93.