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Friday, March 7, 2008

Dialing up business use for iPhones - San Jose Mercury News

Apple stepped up its efforts to boost the iPhone - and has a surprise partner: venture capital firm Kleiner Perkins Caufield & Byers.

At a press event Thursday, KPCB partner John Doerr announced that the firm plans to invest $100 million to fund start-ups creating applications for the iPhone.

"We think the potential for the iPhone is huge," Doerr said.

Doerr's announcement followed other, expected news from Apple that it is releasing software tools to allow developers to create new applications for the iPhone and that it is updating the iPhone software to allow it to receive so-called push mail from Microsoft Exchange servers, putting the popular gadget in direct competition with the BlackBerry and Palm Treo.

Apple plans to release the software update in June. It will be free for iPhone users, but the company plans to charge a "nominal" fee to iPod touch owners.

Though unsurprising, the updates from Apple address some of the outstanding complaints about the iPhone, noted Van Baker, an analyst with Gartner, an industry research firm. Despite its popularity with consumers, the device has seen resistance from the corporate world because of its lack of integration with Exchange, the de facto standard for corporate e-mail.

As part of the new software update, iPhone users will be able to get e-mail pushed directly to their devices from their corporate mail servers, and they'll be able to sync their calendars and address books with their


company's Exchange server.

Additionally, addressing a security concern, corporate technology managers will be able to remotely delete data from lost or stolen devices.

"I'm impressed," Baker said.

During the event, Apple officials stressed the ease with which developers will be able to use the new development tools to create applications for the iPhone. The iPhone comes with a handful of programs pre-installed, including its address book and calendar, and it already allowed users to interact via a Web browser with applications on the Internet.

But the new tools will allow developers to create programs that users can install directly on their iPhones that will take full advantage of the operating system and that will run even when the devices aren't connected to the Internet.

Developers from Electronic Arts, Sega, AOL, Salesforce.com, Epocrates as well as Apple demonstrated sample applications that they'd built for the iPhone in a few days or weeks. AOL developers, for instance, created a version of the company's popular AIM messaging software for the device, while EA developers ported over a version of the company's eagerly awaited upcoming "Spore" game.

Apple released a test version of the software tools and the iPhone update Thursday. It plans to release a full version in June.

Developers will be able to distribute applications for the iPhone only through Apple. The company plans to allow iPhone users to directly download new applications to their devices via a special program to be included in the June software update. iPhone users will also be able to download and install applications through the company's iTunes software.

Apple plans to charge most programmers $99 to become an official iPhone developer. It will charge $299 to developers who are writing proprietary applications for use only inside a particular corporation.

The company also plans to take a 30 percent cut of any sales of developers' programs. But developers can set their own prices for software - including making them free. Apple doesn't plan to charge anything to distribute free applications.

But Apple doesn't plan to allow just any application on the device. It will filter out pornography or malicious software. It also will likely look closely at applications that could affect its relationships with its carrier partners.

While the company would allow a voice over Internet protocol (VoIP) program that allowed users to make phone calls over a WiFi Internet connection, it wouldn't allow such a program to make calls using the iPhone's cellular antenna, CEO Steve Jobs said. Similarly, the company won't distribute software that would unlock the iPhone from particular carrier partners so that it could be used with any wireless carrier, he said.

Already, KPCB is backing one unnamed company that is developing applications for the iPhone and is looking closely at funding a second one, Doerr said. The firm expects to hand out the so-called iFund's $100 million - and possibly more - over the next two to three years, fellow partner Matt Murphy said.

Apple saw big demand for the iPhone in its initial months, but sales over the holidays fell short of some analysts' expectations, and there have been more recent reports of slowing sales, particularly in Europe. Some analysts have argued that the company needs to soon release a new version of the iPhone to keep up with consumer expectations, particularly in Europe and Asia. Some analysts have reported that they expect Apple to release such a "3G" iPhone later this year.

Jobs declined to comment at the event on the company's hardware plans. But earlier in the week, he reiterated Apple's goal of selling 10 million iPhones this year.

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