Apple opens up iPhone with version 2.0 upgrade

Full Exchange compatibility with push email and calendar services will remove many of the obstacles to using the iPhone in corporate environments.

Apple iPhone version 2.0 upgrade offers full Microsoft Exchange compatibility and opens up the platform to third-party developers

Apple has made a big shift towards business users for the iPhone by announcing that the iPhone 2.0 software update will bring full Microsoft Exchange compatibility with push email and calendaring functions that match those of the RIM Blackberry.

Apple has also released a full software development kit (SDK) for the iPhone and iPod touch which gives third-party developers the same tools that Apple uses to create native applications that can make full use of the iPhone's capabilities.

That means that instead of the current limited web-only apps, new programs can take advantage of the iPhone's address book, camera, accelerometer, wifi and EDGE connectivity and a host of other functions to offer much more powerful software. For instance, the recently-introduced GPS-style EDGE and wifi antennae detector also means that developers can offer location-based services.

For business users, though, full Exchange compatibility with push email and calendar services will remove many of the obstacles to using the iPhone in corporate environments.

Apple has licensed Microsoft's ActiveSync services to bring Exchange functions - including the Global Address book - to the iPhone where they will be accessed through the current Mail and Calendar applications.

At the launch event in Apple's Cupertino headquarters a range of developers including Electronic Arts, Sega and AOL were wheeled out to heap praise on the SDK tools and to demo games and programs they had produced in just two weeks.

Among the apps on show were Will Wright's eagerly-anticipated Spore game from EA, a version of Sega's Super Monkey Ball which made use of the iPhone's 3-axis accelerometer and the AIM instant messaging program from AOL.

The games in particular were notable for their impressive 3D graphics - using the iPhone's built-in Open GL hardware acceleration - which looked far better than any other mobile games bar those found on the Sony PSP.

Developers will have to submit their programs to Apple for approval and they will be distributed wirelessly to all iPhone users through a new App Store application on the handset or via the iTunes program. Apple will take a 30% cut of any paid-for applications but will charge nothing for hosting and marketing free programs.

The leading venture capital company Kleiner, Perkins, Caufield, and Byers used the event to announce a $100 million 'iFund' to seed money to developers for the iPhone.

KPCN partner John Doerr - the man who backed start-ups such as Google, Amazon and Compaq - was remarkably positive about the opening up of the iPhone and iPod touch platform to third-party developers.

"Today we're witnessing history," said Doerr. "With the iPhone...in your pocket you have something that's personal - it's broadband and connected all the time. It knows who you are and where you are. That's a big deal. It's bigger than the personal computer."

The iPhone SDK is available to download for free from Apple's website. The iPhone 2.0 software update will be released in June - it will be a free upgrade for iPhone users but there will be a "nominal fee" for the iPod Touch.

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