iPhone Software Development Kit Beta Available

With $100 million in private funding and Microsoft’s ActiveSync protocol, Apple is opening its iPhone software to outside developers in an effort to make the hot devices even more popular and wrest market share from “smart phone” market king BlackBerry.

Apple chief executive Steve Jobs said it wasn’t unfettering iPhones completely and that software creations would be vetted before being made available exclusively at a newly-launched online App Store.

“We think this is going to be a boon for developers… Hopefully, people will think iPhones are even more valuable and buy more of them. This is not an open source project, it is a for-profit project,” -  Jobs said during an invitation-only preview of the kit at Apple’s headquarters in Cupertino, California.

Apple has licensed the ActiveSync protocol from its arch-rival Microsoft.  Two companies together to enable iPhones to receive email, contact and calendar information from business computer networks using popular Microsoft Office Exchange programs.

“This is the other shoe we were waiting for fall since the consumer iPhone was introduced last year. The business market is a huge opportunity for Apple,” - telecom industry analyst Jeff Kagan said.

Renowned Silicon Valley venture capitalist John Doerr, a partner at Kleiner Perkins Caufield & Byers, joined Jobs to announce that his company started an “iFund” to finance entrepreneurs developing programs for the iPhone platform. “Today we are witnessing history; the launch of the SDK for iPhone,” Doerr said. “New platforms are very rare but they can be transformational.”

Doerr said is starting the iFund with 100 million dollars for investments, saying Amazon was funded with only eight million dollars and Google with 24 million dollars. “That should be enough to start about a dozen Amazons or even four Googles,” Doerr quipped. “If we start running out of money, we will look around for some more.”

Applications crafted for iPhones will also work on iPod Touch models, which are basically iPhones without the telephone capabilities, according to Jobs.

Apple will let developers set prices for their applications and give them 70 percent of sales, keeping the remainder to run the App Store. Software for engineers to develop programs in a virtual iPhone model on Macintosh computers is available from Apple’s website.

Developers can work on actual iPhones by registering in a developers program at Apple web site for $99. Registering in the program lets Apple keep track of who makes which programs, Jobs said. “If they write a malicious application we track them down and tell their parents,” - Jobs joked while explaining why developers have to register to make iPhone programs.

The iPhone developers kit has been given to thousands of programmers for beta testing, Jobs said. “The iPhone was a game-changer,” - Gartner analyst Van Baker said after watching the demonstration. “This just adds a lot of momentum to it.”

iPhones have 21 percent of the US “smart phone” market, second only to the 41 percent market-share held by BlackBerry devices made by Canadian firm Research In Motion, according to Jobs.

Jobs pointed out that while emails routed to or from BlackBerry devices are channeled through interim servers in Canada, messages handled by iPhones are exchanged directly between iPhones and company servers. “Somebody working at that (center) in Canada could be looking at your email,” - Jobs said. “We think a direct connection is better.”

The iPhone 2.0 software supports Cisco IPsec VPN to ensure the highest level of IP-based encryption available for transmission of sensitive corporate data, as well as the ability to authenticate using digital certificates or password-based, multi-factor authentication. The addition of WPA2 Enterprise with 802.1x authentication enables enterprise customers to deploy iPhone and iPod touch with the latest standards for protection of Wi-Fi networks.

The free iPhone update will be available worldwide in June and will also provide secure wireless connections to business computing networks and allow owners to remotely “wipe” them clean, erasing all data from devices lost or stolen.

iPhone SDK beta is available for download from Apple web site.