Apple's iPhone 3.0 Adds Features, Rewards DevelopersApple's iPhone 3.0 Adds Features, Rewards Developers

Apple on Tuesday released a beta version of its next generation of iPhone software, which addresses many nagging complaints while bolstering the developer community.

With more than 800 million applications downloaded from the App Store in eight months, Apple knows the success of the iPhone 3G is tied to its developers. With the iPhone 3.0 software, Apple opened up a host of new options for content creators, including new business models, peer-to-peer connectivity, turn-by-turn directions, and the highly coveted cut and paste.

"Apple really moved the bar forward in a significant way," said Michael Gartenberg, VP of strategy and analysis at Interpret. "They've addressed the end-user features people have been clamoring for ... but most importantly they've upped the ante in the developer space. This lets developers create a whole new level of apps we haven't seen before on any platform."

The company said it has received a strong response from the developer community since it released the original software development kit, as there are more than 25,000 applications in the App Store. Apple wants that momentum to continue, and the 3.0 software includes more than 1,000 new application programming interfaces.

The App Store was like the iTunes Music Store in that it only allowed an initial point of purchase, but content creators will be able to charge for additional content within the application. For example, if you purchase a game for the iPhone or iPod Touch, a developer could sell more levels within the game. The developer gets to set the price and keep 70% of the revenue, and the transactions are handled through iTunes. Free apps will not be able to charge for content once they've been downloaded.

Apple also is trying to make the iPhone more social, as the updated software will enable users to have peer-to-peer connectivity over Bluetooth for things like multiplayer gaming and business card exchanges. The back end is taken care of by Apple's Bonjour, and users don't have to pair devices, as an iPhone will be capable of automatically discovering nearby devices.

Accessories could play a stronger role in the iPhone and iPod Touch ecosystem because the 3.0 software will enable manufacturers to build custom accessories that "talk" right to the iPhone via Bluetooth or the connector dock. For example, a manufacturer could build a speaker system that uses the iPhone as an equalizer. The iPhone will support standard protocols for things like playing music, and device manufacturers will be able to build custom protocols as well.

One of the complaints about the current generation of iPhone software is the lack of turn-by-turn navigation, but that has been addressed with the 3.0 software. Developers will be able to create apps that use Core Location as the basis for turn-by-turn directions. This will use the internal GPS as well as cellular tower triangulation for determining location.

Content creators won't be able to use Google Maps for turn-by-turn programs, but Google Maps will be included in the public API. This means apps will be able to have integrated maps that have multitouch integration for zooming and panning.

Apple also addressed why it chose a push-notification system instead of background processing, which can be found in rival platforms like Symbian, Android, Windows Mobile, and BlackBerry.

"It's not good for the customer," Scott Forstall, Apple's senior VP of iPhone software said of background processing. "It drains your battery, won't let your phone go to sleep when it needs to, and it won't let it reach the lowest power-state."

The company said the push-notification system keeps a constant connection between an Apple server and an application that the user closes. For example, an instant messaging program could be closed, and if a friend sends a message, the server would be able to send three types of notifications to the phone. These notifications can be visual, audible, or a text alert, depending on what the developer wants.

"The reason we're doing this? It scales," Forstall said.

On the consumer side, the software will have more than 100 new features that address many of the nagging complaints users had with the platform. The ability to cut and paste has been added, and the process works almost exactly as Digg founder Kevin Rose predicted in that users double tap on text, which bring up the option to cut, copy, or paste. Users can then select as much text as they want and paste the text. This feature works across all apps, including the Safari Web browser. To undo a selection, a user can just shake the handset.

The latest iPhone software also will have support for multimedia messages, a landscape virtual QWERTY keyboard across all the key applications, and the ability to record voice memos using the internal or an external microphone. Apple also boosted the calendar app by adding support for ICS and CalDAV, which is the standard used by the likes of Google and Yahoo.

The company also boosted search by showing off a universal search feature dubbed Spotlight. It lets the consumer search across all apps from a single location on the home page. Rivals Android and Palm's upcoming WebOS also have this ability. For enterprise iPhone users, Apple added the ability to search contacts and messages. If the information isn't on the phone, users will be able to search on a server via Exchange.

The 3.0 software is available as a beta today for everyone in the iPhone developer program, and it will be pushed out to existing iPhone and iPhone 3G users this summer. Users of the iPod Touch will have to pay a $9.95 fee to upgrade.

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