Will Apple Open the iPhone?

An official software-development kit may finally be announced at January's Macworld. Why the wait? It may have something to do with Leopard

William Hurley loves his iPhone. But he'd love it even more if he could write software for it.

He's not alone. Hundreds of programmers showed up at an iPhone event organized by Hurley, an executive at software maker BMC (BMC), even though Apple hasn't released the source code they need to exploit the device. That was in July, and the criticism of Apple's refusal to open the iPhone hasn't died down.

Now it appears Apple (AAPL) will soon answer those pleas. Sources familiar with the company's plans tell BusinessWeek.com that Apple will release a software-development kit for the iPhone in early 2008, enabling programmers to create games, business-productivity tools, and countless other applications for the device. Few details are known, but sources say an announcement will come in January, which suggests it may be slated for Jan. 15, when Chief Executive Officer Steve Jobs takes the stage at the Macworld Expo in San Francisco.

Why the wait? Some analysts suggest the delay has little to do with frustrating developers or Apple's official position about bugs from third-party software posing a threat to cellular networks. Instead, the timing may have more to do with Apple wanting to wait at least until the launch of the new operating system for its Macintosh computers. Known as Leopard, it was originally planned for June, 2007, but is now set for release on Oct. 26. Since the iPhone was built with the current Mac OS, the thinking is that Leopard's new capabilities will enable more robust features on the iPhone as well.

Cat-and-Mouse Game

Meanwhile, writing and installing individual programs that run on the phone remain officially forbidden, extremely difficult, and somewhat pointless given Apple's heavy-handed response to such efforts thus far. The only way to do it is to break the iPhone's software locks, as some hackers have managed to do, only to see Apple cripple such devices with a software upgrade. Not surprisingly, some iPhone owners have responded with lawsuits seeking as much as $2.6 billion in damages.

Naturally, hackers quickly broke through the new set of software locks, suggesting that a cat-and-mouse battle may be under way. But the persistence also demonstrates just how eager programmers—both hobbyists and companies—are to build software for a device that Apple promises will be in the hands of 8 million people by the end of next year. "It's clear what the user community wants," Hurley says. "They're not hacking around with it for fun as much as they are because they want other features on the iPhone."

Such features might range far and wide, from video and Internet calling to voice recording and instant messaging. But until Apple changes its policy, most developers will have to settle for the next best thing, as they did at Hurley's event in San Francisco, where they created Web-based applications that can be accessed through the iPhone's browser, Safari. Despite widespread frustration over the limitations, such events are planned for London and Germany in the coming months.

Those familiar with the process of hacking an iPhone and installing unauthorized applications say doing so requires obtaining "root" access to the device's underlying software code. In the world of computers that run on Unix-based operating systems—which includes Apple's Macintosh computers and the iPhone—users with root access have no limitations as to which files and features they can tinker with.

It Pays to Be Picky

In theory this means that root access on an iPhone could be exploited for malicious purposes, such as hijacking a user's contact list, eavesdropping on calls, or worse. "You can do anything you want, including many things that Apple and AT&T don't want you to do," says Rik Farrow, an independent security consultant who has worked on Unix-based cell-phone projects for other companies, but not Apple.

Concerns like that will probably lead Apple to be careful in selecting which programmers are given the tools to build iPhone software. It isn't clear yet how Apple plans to go about vetting programmers or to what extent it will open the platform to them. Despite the purported risks, Apple's wireless partner, AT&T (T), isn't likely to stand in the way. "It's up to Apple to decide whether third-party applications will go on the iPhone," says AT&T spokesman Michael Coe. "We have embraced third-party applications on other devices."

Analysts expect that instead of equipping anyone who wants to build iPhone software, Apple will handpick the companies and individual programmers to be given the software-development kit, much as it already does with development of third-party applications for the iPod. Similarly, iPhone programming tools might be distributed via the iTunes store, which Apple already uses to distribute simple games that run on the iPod. "The real pragmatic way to look at it is, no operator would want to ship a handset that's completely open," says Benoit Schillings, chief technology officer at Trolltech, a wireless-software company. "They would want to pick and choose applications to run on it."

Early VIP Access?

It's rumored that some major players already have been given the iPhone development kit. The list is said to include gaming software maker Electronic Arts (ERTS) and Google (GOOG), which has already built versions of Google Maps and its YouTube video site for the iPhone. Electronic Arts declined to comment, while a source at Google indicated that the search company hasn't been give early access to the iPhone kit.

Meanwhile, companies that specialize in software for wireless phones are jockeying for Apple's attention. "We've been working with the Web interface for some time but would love to embed our technology on the iPhone itself," says Brian Bogosian, CEO of Visto, a privately held software outfit that specializes in e-mail software for mobile phones. Similarly, a startup named iSkoot, which offers an application for making Skype (EBAY) phone calls on mobile devices, says it's eager to adapt its software for the iPhone platform.

Interestingly, despite all the consternation about hackers, Apple may eventually decide to embrace some of the unauthorized applications now circulating if they prove especially popular. "We think Apple is welcoming these mild hacker attacks [on the iPhone] to discover weaknesses and to see if they should be hiring some people," says Richard Doherty, head of Envisioneering Group, a technology consulting firm. "There's a reason why there's an empty row" on the iPhone's screen, he says. "It's for additional applications."

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