Jobs is explaining that it's been hard, historically, for developers to distribute their phone apps. Apple is fixing that with the Apps Store, which will be on all iPhones with the new software release.
He's demoing the Apps Store. There's a list of categories, like Business, Finance, and Games. There's a list of the Top 50 apps. And if you know what you want, you can search--for a backgammon game, for instance. Once you find what you want, you click a button and it's downloaded and installed, via cell network or Wi-Fi.
You can also browse and download apps via iTunes on your computer.
If a developer has updated an app, the Apps Store will tell you so and let you install the new version. "We think this is pretty cool..the Apps Store will be the exclusive way to distribute iPhone apps."
"Developers will say, 'this is great, but what's the deal--what's the business deal?'" Developers will choose the price and get 70 percent; Apple will keep 30 percent. There are no credit-card processing fees or marking charges. "This is the best deal going."
Many developers will decide how much to charge--and many will make applications free. When they do, Apple won't charge them anything, since both developers and Apple want to get lots of apps out there.
"There will be some apps that Apple will say no to," such as porn, malicious stuff, and privacy-invading ones.
The enterprise features and third-party pps will be part of the iPhones 2.0 Software Update. A beta release is going out today to thousands of developers and hundreds of companies. "We need the feedback." It will ship to all iPhone customers in June, and it'll be free. Applause.
"In just a few months, every iPhone user will have everything you saw today on their iPhone." And the update will also be available for the iPhone Touch. But the accounting for the Touch is different, and there will be a nominal charge for the update.
"This is our road map for the iPhone software." Many people will want to become iPhone developers. It's be easy, and you'll be able to download the SDK, starting in about an hour. You'll need to be a registered developer to run apps on real iPhones and iPod Touches and distribute your app. That will cost $99.
"That is our software roadmap, and we hope you're as excited about it as we are..thanks for coming...but we do have one more thing."
Kleiner Perkins Caufield and Byers is "the premier venture capital company in the world." Here's VC legend John Doerr of Kleiner Perkins. Applause. Kleiner Perkins loves Apple, and loves entrepreneurs. He's talking about how Steve started Apple in 1976, then left. It went downhill fast. Then he came back and restored its glory--while building Pixar. He's the "world's greatest entrepreneur." He asks the audience to applaud Steve.
He quotes Alan Kay: "The best way to predict the future is to invent it." But the second best way is to fund it. Kleiner Perkins is launching the iFund, a VC fund for iPhone developers. It took $2 million to start EA, $8 million for Amazon, $24 million for Google. The iFund is $100,000,000--"enough to start four Googles."
The Mac and the iPhone are amazing platforms. And "today we're witness history." The iPhone is personal, with you always, and knows where you are. "That's a big deal--it's bigger than the personal computer."
Matt Murphy will lead the iFund, along with a bunch of other folks. "There's never been a better time than now" to build a revolutionary app. "I can't wait to see the great new companies we build together...thank you." Applause.
Jobs returns and recaps the day's news. There are refreshments outside. And the press can now ask questions. Applause.
Jobs, Schiller, and Forstall remain onstage.
Question: What does the $100 million fund do for the iPhone community? Jobs says it means that Kleiner Perkins thinks there's a big opportunity for small companies to jump on the iPhone bandwagon. Apple loves it. "It helps the whole ecosystem."
Question: A lot of apps will be written for the business world. Shold RIM be worried? What's the message? Jobs says you'd have to ask RIM, and the message is that Apple is trying to give customers what they've asked for. Schiller reminds. Jobs reminds us that the iPhone has been out for less than a year, and the update will ship at around the one-year anniversary. "We've been busy."
Question: What will Apple do to make sure the apps are safe and secure? Jobs says it's a good question. The iPod always works because it's closed. But a Windows PC involved fiddling to keep it working. Apple wants the best of both worlds--the power of third-party apps without danger. Developers will have to register and pay Apple $599. They get a certificate: "If they write a malicious app, we can track them down and tell their parents." And remove the app from the library. Apple is doing other things it can't talk about now--"We put a lot of thought into this."
Forstall adds that Apple is using sandboxing and other techniques to keep things safe. Jobs: "We'll do the best we can and learn as we go. " The questioner says, so the iPhone is less safe than the iPod? Jobs says yes, that's true.
Question: Will there be a VoIP app for the iPhone? And will that cause problems for Apple's carrier customers? Jobs says that "the initial take" is that that Apple will allow VoIP over Wi-Fi, but not over the cell network.
Question: Will you be able to sync over multiple systems--both Exchange and iCal, for instance? Yes, Jobs says, you will be able to--Exchange at work and Gmail for home, for instance. Forstall says you'll only be able to have one Exchange account.
Question: Will Apple being the sole distributor cause monopoly problems? What if a developer doesn't want to go through Apple? Jobs says that they won't be able to distribute apps, but that the Apps Store will "be a boon" since it'll reach every iPhone customer.
Jobs says that the idea isn't for Apple to make money off applications. The 30 percent it's keeping is just to break even. "We want to create an efficient channel for developers to reach every single iPhone customer." Forstall says that developers will still be able to make Web apps that don't go through Apple. Schiller says that for free apps, this will be great, and it'll be great for for-pay pps, too.
Ryan Block of Engadget asks a question: Will unlocking software be prohibited? Jobs: "Yes."
Question: How much will the upgrade for the Touch cost? Jobs explains that the iPhone tax accounting is based on a subscription over two years, but for the Touch it must charge. The price hasn't been set, "but we don't look at this as a profit opportunity."
Question: What is the IT situation if a company wants to switch from BlackBerry to iPhone? Schiller says IT staffs know and use Exchange, so it'll be easy. And Apple will provide tools for configuring lots of iPhones via e-mail or the Web.
Forstall says that Apple has created Profiles, which make dynamic setup of e-mail, VPN, and other stuff easy. "It's literally a single tap on a Web page...it's incredibly simple." Moving from BlackBerry to iPhone will be "dirt simple." And IT departments will love the SDK, since they'll be able to write apps. They'll love the Cisco VPN, too. "The possibilities here for enterprise...there's nothing like it."
Follow-up question: Will push performance be degraded? No, this is faster, because it's direct.
Jobs asks why CIOs aren't worried about e-mail security with BlackBerry, since everything goes through a connection in Canada. It's both a point of failure and a potential security breach, since someone at RIM could read your mail.
Question: Is this an international rollout? And can you create open-source apps? Yes, Jobs says, it's international. But you can't create open-source apps.
Question: Any plans for additional connection possibilities, like additional carriers or WiMax? Jobs says we're not here to talk about that.
Question: How will an enterprise distribute internal apps? Schiller says they're working on a system for enterprises to securely distribute apps to their users.
Question: CTOs might not want their employees installing apps from the Apps Store. Will they be able to disable that? Jobs: "I hope we have that problem...we really haven't thought about it." If it's a problem for customers, they'll fix it.
Forstall says that the update has some parental controls that might be extended to the enterprise.
Question from the SF Chronicle: Why did Apple change its initial stance? Jobs: "We at Apple change our minds a lot...but I don't really know what you're talking about." Clarification: Why did it move away from the Web as the sole app platform. Jobs says that the company heard from developers that they needed an SDK, and that it took awhile to make a "pristine" SDK. Forstall touts the SDK's attention to detail. "Everyone cares deeply..abut nailing those APIs." Schiller says the iPhone developer program is brand new, and the developer relations team has worked hard on it. "We've built up a whole new process."
Question: What's the carrier relationship? Traditionally, apps go through the carrier. Is Apple working with carriers, and is bandwidth an issue? Jobs says that Apple has a new kind of carrier relationship, with Apple responsible for the software. "We're running it." He won't say whether carriers are getting a cut, "but generally, we like to see the money flowing the other direction."
Question: Will developers get access to Dock Connector accessories, enabling stuff like GPS? Forstall says they won't get direct access for now.
Steve Jobs thanks us. Applause. The event ends. More thoughts later...