By Jon Fortt
March 17, 2009

Apple’s

iPhone 3.0 event is scheduled to begin at 10 a.m. PT/ 1 p.m. ET. Refresh this page for updates.

Eager members of the press are filing in. The room is mostly full now. We’ve been asked to silence our phones.

The lights have dimmed. Greg Joswiak, head of iPhone product marketing, has taken the stage. He says we’re getting a preview of iPhone OS 3.0. He’s going to take a few minutes to reminds us where the iPhone is. It’s in 80 countries. They stated the goal to sell 10 million in the first calendar year, and blew that number away, selling 13.7 million. He’s showing a graph that shows sales of 17 million iPhones, and the inflection point when the iPhone 3G came out.

The iPod touch also runs the iPhone OS, and in total, Apple has sold 30 million devices with the OS. (Interesting that the iPhone is outselling the touch.) He says there have been more than 800,000 downloads of the iPhone software development kit, which developers use to make apps. Also, 50,000 developers have joined the iPhone developer program.

Now, kudos from developers for the OS: Gameloft says they have more than 20 games and 2 million paid downloads. Steve Demeter of Trism, a one-man game development shop, is in a video about the game he developed. He developed the popular Trism game, and he’s saying it basically helped him bust out of a dead-end job. It’s a feel-good story about a little guy making it big. Lots of smiles and applause from the crowd.

Joswiak says there are more than 25,000 apps now in the store, and there is lots of curiosity over the approval process (which some have complained is slow), but he says 98% of apps are approved in 7 days or less. Apple has now surpassed 800 million app downloads.

“We’ve created something profound,” he says, and we’re just 8 months in. Now Scott Forstall, SVP of iPhone software, is coming out to show the goods.

“This is a major update” to the iPhone OS, Forstall says.

What’s new for developers:

Developers so far have been using the same APIs and tools that Apple uses to develop. “What they did with this blew us away,” he said. Apple has been working to make the SDK better. There are more than 1,000 new APIs. Apps should be easier to develop, and allow developers to add more functions.

First, the app store: He’s reminding us that developers can give apps away for free, or they can sell them and keep 70% of the revenue. Developers are paid monthly. Some developers have said there are other business models they’d love to support, including subscriptions, where you can renew subscriptions within an app. Game developers would love to be able to sell additional levels within a game. E-book developers would love to sell a generic e-book app and sell additional books within their in-app bookstore. Apple is enabling that with in-app purchase. He’s demonstrating how that might work for a magazine, a game, and a city guide.

The whole thing is tied into the iTunes store, so it’s tied into the iTunes credential panel. So customers are billed through iTunes, which simplifies things greatly for developers. “The business model for in-app purchase is the same as for the app store,” he says, which means Apple covers all credit card fees and developers are paid monthly.

A catch: Free apps remain free. Which means developers can’t offer a free app and then charge for new levels.

Now: peer-to-peer games. Two people can play games against each other by discovering each other’s iPhones, without having to use an outside WiFi network. It’s done wirelessly over Bluetooth. And there’s no pairing. This uses Bonjour technology, the same method Apple uses to let people share their iTunes playlists with each other.

It works for things besides games. In a sales meeting, you could find a colleague’s phone and share a sales lead.

Accessories: There are thousands of developers selling iPhone and iPod add-ons. With the 3.0 SDK, accessory developers will be able to build apps that speak to the hardware — so a speaker maker could build an application that speaks directly to a speaker. An FM transmitter maker could build a custom app that finds the best FM station to broadcast, and connects. Or a medical device maker could make a blood pressure cuff app that takes your blood pressure and sends it to your healthcare professional. This works through the dock connector and Bluetooth. This works with Apple’s standard protocols, or developers can add their own.

Maps: Apple worked with Google to build the maps app. Developers have said they’d love to build maps into their apps. Now they can. Apple is making the heart of the maps app a public API. An example: A concierge app can embed the iPhone Google map in the app, add custom annotations, even find the user’s location on a map.

One more thing with maps: Developers can use core location to enable turn-by-turn directions. There is a catch to this, though: Developers have to bring their own map tiles to use with turn-by-turn directions.

Push notification: “We’re late on this one,” he says. Apple expected to have it done by the end of the year, but didn’t. The reason: Apple basically said they were swamped by the volume of developers who wanted to use it, and had to re-architect the notification server. Now it’s really scalable.

He’s explaining why Apple still won’t let apps run in the background. The short version: It kills battery life, and slows down other apps.

How it works: For example, an IM app is also running on a third-party server. The third-party server sends a message through Apple’s push notification server, which is connected to the phone. The app can send a badge, an audio alert, or a text alert. Apple is doing it this way because it scales, Forstall says. Another reason to do it this way: It will work the same around the world, on different mobile networks.

What also comes with this OS update: In-app e-mail, proximity sensor, iPod library access, streaming audio, shake API, streaming video, data detectors, core data, and in-game voice.

Now he’s showing what a few developers did with the update in just a couple of weeks.

First, meebo, an IM app. CEO Seth Sternberg is coming up to talk about the iPhone version. Meebo lets you keep in contact with friends no matter what IM service or social network they use. Meebo felt push notification was essential to doing this app right. (That demo was a little underwhelming, actually. I’m not sure they really demonstrated push notification by getting out of the app and then getting notified.)

Now, EA. Travis Boatman is up. They were up for the SDK launch, where they announced Spore. They’re going to show Sims 3. They’re showing a character walking through his house, spending in-game money to customize his house. The app uses in-app commerce to buy a stereo for 99 cents. It shows up in the living room, and the character gets all excited. Now he can play music on the stereo off of the iTunes playlist. (Much better demo.) “I love the fact they’re accessing the built-in iTunes music library,” Forstall says.

Next, Oracle. Hody Crouch is up. He says Oracle has five iPhone apps, and they’ve gotten a great response. He’s showing an alert within the Oracle app that lets him know that parts are low for a manufacturing company’s production line. He can keep a customer informed about the supply problems by sending an e-mail without leaving the app.

Next: ESPN. ESPN has one of the best web apps, Forstall says, and now they’re doing a native app. Oke Okaro is demonstrating ESPN alerts. He shows an alert that says Syracuse beats UConn. He’s showing video highlights from the game. The new video player delivers video based on the connection you have. So it will deliver better video if you’re on a good WiFi connection, for instance, lower-quality video if you’re on a 3G connection. Also, ESPN is integrating with the mobile website so people can get more detail than the alert supplies. (Another nice demo.) ESPN sends more than 50 million alerts a month, Forstall points out, which is part of the reason Apple took so long getting the push notification server ready.

Next: LifeScan and Anita Mathew. They do glucose monitoring. A person with diabetes could connect a glucose meter to the iPhone, which displays the reading. She can then plan a meal using the app’s meal planner. It shows how many grams of carbs are in the meal, and the iPhone app tells her how much insulin she might need. But she also has swim practice, so she can take a little less insulin. The app now does the math for her. The app also has social features, letting a person send others a message with their insulin reading and a message about how they’re doing. The app also has a history view with all of the person’s readings, and a graph view. The graf tells her when she’s out of the suggested glucose range. (This demo is a big deal. Hearty applause.)

Next, ngmoco. This was one of the first companies funded by Kleiner Perkins’s iFund. Neil Young is up on stage. He’s showing two games: Touch Pets and LiveFire. First, Touch Pets. Another guy is doing the demos. A notification says he’s been invited to a playdate with another dog. In the playdate, he can buy gear for his dog. He then pets the dog, and the dog looks very happy. Now, the first-person shooter. He gets killed, then comes back and asks a friend to come help him. They’re chasing another guy around the level. They get him. (Nice use of peer-to-peer.)

Next, Smule, the creators of the Ocarina music app. (It’s like a flute for the phone.) The creator, Dr. Ge Wang, is up to demonstrate a new musical instrument. It’s called Leaf Trombone, World Stage. He’s going to do a duet on the Leaf Trombone. Phantom of the Opera. It’s sort of whimsically, hauntingly … nice. Kids will have a blast with it, and grownups, too.

It sounds like Forstall is done with the app demos.

Now, some of the 100 new features for customers.

First: Cut, copy and paste. (Applause from the audience.) He’s going to demo. He’s going into an e-mail. You double-tap a word and it selects, then drag to select a block of text. (This is just as Kevin Rose said it would work.) It also works across applications. It also works with web content. Press a finger down on a section of a webpage, and it will select the whole block, and allow you to copy it. It copies the html, including styles and links. Shake the phone and it gives you the option to undo or redo. Pressing a finger down also selects a whole block in a text message. It works for third-party apps as well. Also: Photos. You can now send more than one photo at a time by copying and pasting them into an e-mail.

Next: Landscape. Landscape mode now works in mail, particularly mail with attachments. You can also compose messages in it. Notes and SMS will work this way, too. (All “key” applications will work with landscape mode, he says.)

Now, SMS: Forward and delete SMS, and now support for MMS. You can send and receive photos, contacts, audio and locations via SMS.

Next, voice memos: it uses the built-in mic. You can trim and share.

Calendar: Two new calendar types: CalDAV and subscriptions. (It would be nice to hear more about how this works.)

Stocks: News and details are added to the app, and landscape view for charts and the like.

Search: Now you can search mail. You can both search what’s on your iPhone, and continue the search on the server where it resides. You can search in Calendar and in iPod, too. And in notes. And, you can search across all the apps in an iPhone version of Spotlight, a version of the same app that exists on the full-blown Mac OS to search the whole computer.

More: Notes sync. Notes now sync with the computer. Shake to shuffle songs. Auto-login for your favorite WiFi hotspots. Stereo Bluetooth, so you can now use headphones and speakers. Anti-phishing in Safari, and autofill. Parental controls now include TV shows, movies, and apps. Languages: more of them. YouTube: you can now log in and share favorites, and subscribe to YouTube channels.

Recapping: in-app purchase, peer-to-peer connectivity, custom apps for accessories, in-app maps, push notification, copy and paste, landscape in key apps, MMS, voice memos, calendar support for CalDAV and subscriptions, stock upgrades, search and spotlight.

Joz (Greg Joswiak) is back up. iPhone 3.0 will be available first as a developer beta, out today for everyone in the iPhone developer program. He’s encouraging developers to test the update to make sure their apps are compatible. Also, the app store is coming to 15 more countries, for a total of 77.

When do the rest of us get iPhoen 3.0? “This summer.” All iPhone customers will get it free. The original iPhone can use it, but stuff like MMS and stereo Bluetooth won’t work on the original iPhone. iPod touch users can get it for $9.95.

He’s thanking us, so that means it’s over.

Ah, wait: There’s a press Q&A coming up. Devopers are leaving, press staying to ask some questions. Looks like it will take a couple of minutes for the developers to clear out of the room. Stay tuned ….

Q&A is starting. If you’ve got questions, send them along and I might try to get them asked.

Q: Why so long for cut and paste?

A: It’s not exactly easy to do with the interface and the “paste forward server.” (Hm. Still doesn’t seem like it should have taken that long.)

Q: Flash? Video?

A: No announcement today. … Forstall says there are ways to do video. HTTP streaming, H.264, etc. But nothing new on Flash. ESPN may have done it with HTTP streaming APIs.

Q: More about peer-to-peer: Does it work with other devices?

A: The P2P is really about a 1-1 connection, but it’s really about using Bluetooth and Bonjour. Peer-to-peer is limited to Bonjour/Bluetooth.

Q: More on P2P: Can people trade music files?

A: You can stream music to music apps. It might be confusing to do more than that.

Q: Where does Apple stand on tethering (sharing an Internet connection from phone to computer)?

A: Two pieces are needed: The client side, and the network side. Apple has made it work on the client side, now the carriers have to do their part. (In the U.S. that would be AT&T.)

Q: New hardware? Netbooks?

A: Nothing to announce.

Q: Bluetooth human input device profile for external keyboards?

A: Nothing to announce.

Q: Push notification: Any uptime guarantees?

A: No. We want it as reliable as possible, but even SMS doesn’t have guarantees.

Q: External microphones? Will there be external adapters?

A: Yes, there will be third-party apps and hardware for higher quality.

Q: Performance issues: The current interface can be laggy. Has that been addressed?

A: We take performance seriously, and we’re addressing it.

Q: Compatibility: Bluetooth and the iPod touch?

A: The latest version of the Touch has Bluetooth, and it can be unlocked.

Q: Why can’t the first iPhone do MMS?

A: The radio won’t do it.

Q: With P2P, can an app access the iTunes library?

A: (Long pause.) Technically, lots of things are possible, but they’re not saying whether Apple will allow it. They’re saying they’ll have to think about it.

Q: Can you clarify the acceptability policy on apps?

A: The growth rate on apps has been great. We want them to be successful. We want customers to feel good about the quality of what they’re getting. There’s a 96% approval rating. The number one thing they filter for is that the app works well. There are other things we check for: profanity, pornography, privacy violations. There are also issues about content suitable for children, and the parental controls should help with that. (This is Phil Schiller. For the most part, he’s not answering the question with any new info.)

They’re ending the Q&A. (For the guy who asked, no voice capabilities for dialing or directions.)

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