Apple reaches out to industry with iPhone SDK : Firm to keep 30% of iPhone app sales

**As published at RCR Wireless News**

CUPERTINO, Calif. — Apple Inc. has delivered on its promise to offer a software development kit (SDK) to spur the growth of mobile applications for the iPhone. Thus far the only third-party applications out there are Web sites that simply make use of the touchscreen.

The SDK is now available for download from Apple’s Web site. The SDK is designed to work on Apple’s iPhone 2.0 software update, which is scheduled to be released in June. The SDK, which was initially announced last year, will expand the unique relationship Apple has carved out for itself between device maker and end user. Indeed, Apple is the sole party responsible for the iPhone’s software and applications set.

The newly open iPhone system will rely on Apple’s App Store, which will serve as the exclusive distribution channel for all applications built for the iPhone and iPod Touch (which will need the 2.0 software update to run third-party applications). Developers interested in getting their applications on board will have to join the iPhone Developer Program for $99 and relinquish 30% of revenues to Apple.

Developers can set the price for their applications on the App Store and will get a 70% share of all revenues from purchases on a monthly basis. Co-founder, Chairman and CEO Steve Jobs said the revenue share is about the same as what’s shared with record labels on purchases from iTunes. It’s also reported to be the same share Apple collects from wireless carriers.

“This is the best deal going to distribute mobile applications to iPhones,” Jobs said during the announcement yesterday at Apple headquarters.

Apple will also shoulder all the costs of hosting, marketing and managing the App Store, which Jobs said he doesn’t intend for the company to make much money on.

“We think this is going to be a boon for developers and they’re going to love it,” Jobs said. “Our developers are going to be able to reach every iPhone user through the App Store.”

And what if the developer wants to make its application available for free? “There is no charge for free apps,” Jobs said. “We’re going to pay for everything to get those apps out there for free.”

The App Store will include a featured list of applications as well as top downloads, and will alert iPhone users if there is an updated version of an application they have previously downloaded.

Toolbox

“Starting today we are opening up the same APIs and tools that we use internally to build all of our iPhone applications,” said Scott Forstall, VP of iPhone software.

Calling the APIs the most important piece of the SDK, Forstall outlined the four layers — Cocoa Touch, Media, Core Services and Core OS — that developers are gaining access to through the documentation.

“It’s the most advanced platform out there for mobile devices. In fact we think we are years ahead,” Forstall said.

Apple’s iPhone platform joins other open mobile operating system such as Symbian, Palm OS and Windows Mobile.

With the iPhone SDK and forthcoming software update (which is operating now in limited beta) come a series of new development tools made specifically for the iPhone. Xcode, Apple’s developing environment, which is used to build all applications and the operating system for the iPhone, will serve as the toolbox engineers need to work their magic. The application knows all the iPhone’s APIs and is integrated with the documentation for the device platform. A graphical interface and drag-and-drop implementation work side-by-side with a fully functional iPhone simulator the company developed for Mac OS X.

“We have a fantastic set of tools,” Forstall said.

To demonstrate the quick development-to-deployment ratio, he showed the audience a pair of applications. First, Forstall showed off a game called “Touch Fighter” by physically moving around on stage to steer a fighter jet. Forstall also demonstrated “Touch FX,” an application that that relies on physical motion for photo editing.

The iPhone uses an accelerometer, which recognizes the device’s orientation.

Putting it to the test

Forstall then introduced a handful of developers Apple reached out to prior to the SDK release. They were all given two weeks to develop an application to be demonstrated at yesterday’s event. Most of the developers had never developed applications for MAC OS X before.

Electronic Arts Inc. showcased “Spore” and Sega of America Inc. demoed “Super Monkey Ball,” both games that relied on the iPhone’s accelerometer to control game play. Separately, Salesforce.com Inc. demonstrated an application for sales representatives that included detailed graphics on key sales measurements and a section showing the user how close he or she is to closing the sale. The application also synchronized updates over the air and linked directly to the iPhone’s mapping functionality, contacts, calendar and e-mail.

AOL L.L.C. showed off an instant messaging application, while Epocrates Inc. demonstrated an application for physicians that would allow them to look up information about medicine, drug interactions and pharmaceuticals.
Each developer talked about how simple the development process was.

“I can honestly say developing software for the iPhone is like developing for no other mobile platform,” said Glenn Keighley, a mobile software developer at Epocrates.

Ethan Einhorn, associate producer at Sega of America, said at first he doubted if the joystick- and keypad-free iPhone would meet his hardcore-gamer standards. But he’s been converted. “After two weeks with the iPhone, it’s going to be very hard for me to go back to playing (Super Monkey Ball) with a game controller,” he said.

Security

Apple isn’t completely opening the floodgates on third-party applications, however; under the company’s iPhone Developer Program, developers will each be assigned a unique electronic certificate.

“If they write a malicious app, we can track them down, we can tell their parents,” Jobs said.

“This is a big concern. It’s a dangerous world out there,” he said. “We put a lot of thought into this and I think it’s a real problem.”

Apple is also restricting VoIP applications that operate on the cellular network, but will allow calling over the iPhone’s Wi-Fi connection. The company said it will keep out adult content, malicious or illegal applications, bandwidth hogs and applications that infringe on privacy.

New pool of funding

John Doerr, a partner and venture capital firm Kleiner Perkins Caufield & Byers, was brought on stage to announce a $100 million venture capital iFund to invest in companies developing applications and services for the iPhone.

“That should be enough to start about a dozen Amazons or even four Googles,” he said, hinting at the startup capital those companies relied on.

“(The iPhone) is bigger than the personal computer,” Doerr said. “I can’t wait to see the great new companies that we build together.”