Since the release of the iPhone last June, software developers and would-be business users have longed for applications like e-mail and calendars to run directly on the sleek and popular device, rather than just Web applications that run on its browser. Now they have them, thanks to a new software development kit and promised upgrades to the iPhone's 2.0 software.

Taking dead aim at business smartphone platforms, most notably Research In Motion's BlackBerry, Apple CEO Steve Jobs wants to turn this pricey consumer toy into a power- ful business tool for mobile professionals.

Going further than expected, Apple is throwing open the iPhone platform to third-party applications. "We're opening the same native APIs and tools we use to build our iPhone apps" to independent developers, says VP of platform experience Scott Forstall.

Apple, being Apple, still controls distribution of those applications. It's creating an "Apps Store" that will live on every iPhone, through which developers can sell their wares. For commercial applications, the developers get 70% and Apple gets 30%; there's no charge to distribute free apps. Apple's control raises concerns about how varied and rich the available software will be, though Jobs promised to weed out only malware and porn: "Will there be limitations? Of course."

Perhaps even more significant than the SDK for business IT managers are the built-in capabilities coming in the iPhone 2.0 software update, due in early summer, close to the one-year anniversary of the device's release. "There are a lot of things enterprise customers have told us that hold us back from being huge in the enterprise," says Apple marketing VP Phil Schiller.

Apple says it's building Microsoft Exchange support to allow push e-mail, calendaring, contacts, and global address lists, plus the ability to remotely delete data. Notably, Apple struck a partnership with its longtime rival to do it. "We have licensed ActiveSync for the iPhone," declared Schiller, to whoops and gasps from the audience.

At Apple's Worldwide Developers Conference almost a year ago, Jobs promised developers the ability to "write amazing Web 2.0 and Ajax apps that look and behave exactly like apps on the iPhone." Yet software savants were left to cobble together Web applications for the smartphone without Apple's help, hardly inspiring the loyalty of the developer community. Apple sees this SDK release changing that.

A MORE-OPEN COMPETITION
Apple's moves come at a time when other mobile platforms, from RIM's BlackBerry to Microsoft's ascendant Windows Mobile to Google's open source Android operating system to Mobile Linux, are competing to provide business users with a rich mobile computing experience in a small package. With fast 3G wireless networks starting to arrive in North American markets, and as the Big Four U.S. cellular carriers' grip on the mobility market finally loosens, much of the innovation in computing and communications is now focused on mobility.

With the iPhone SDK, Android, and Mobile Linux, "we expect to see tremendous innovation over the coming 12 to 24 months in end-user applications," says Michael Sippey, VP of product at blogging software provider Six Apart.

Apple is trying to keep up. Google, in particular, has made a big push to get its search and other applications, and the ads that accompany them, on a range of mobile devices. Almost immediately after introducing the long-awaited "Gphone"--not a device but a mobile operating system, Android--Google opened the Android SDK wide, hoping to attract a large cadre of developers. Google sweetened the pot with a series of prizes worth a total of $10 million to the coders who create the most compelling and useful tools to run on the OS. Google says the Android SDK has been downloaded several hundred thousand times.

Just days before the iPhone SKD launch, Google said it would extend its Gears software, which lets users work in Web applications when offline, to the mobile world. Gears will work initially on Windows Mobile.

Microsoft, mindful that it won the PC war in part by lining up legions of developers, has nurtured a platform that gives them plenty of resources and incentives to create software for the world's No. 2 mobile OS. Microsoft claims some 18,000 developers for Windows Mobile. The world market leader, Symbian, claims some 55,000 developers on its operating system, but it's strongest in Europe and Asia, an also-ran in North America.

Microsoft last week said it's partnering with Nokia to bring Silverlight, which competes with Adobe Flash for building Web applications, to cell phones. Silverlight will be available on Nokia's popular S60 platform, and Microsoft intends versions for Windows Mobile and the Symbian OS shortly thereafter. Yet Microsoft CEO Steve Ballmer says he's concerned Apple might make it very expensive to get Silverlight on the iPhone. "It may mean that Apple's not welcoming open, royalty-free runtimes on its platform," he says. "We'll have to wait and see."

Even RIM, which historically runs a closed system, has opened the BlackBerry platform, with its 9 million subscribers, to outside applications.

Major enterprise software vendors have started to take notice of the increasing demand for mobile versions of their products. Sybase last week released a new version of its iAnywhere mobile data management suite written especially for Windows Mobile, and it has already produced a beta version for the iPhone. Based on the SDK release, it expects the full iPhone-ready software to hit the market soon.

Even more eager are smaller, independent developers, who supply their products largely to small businesses. "We're excited about [the SDK release]," says Frank Mahdavi, CEO of MIR3, a provider of notification and broadcast-messaging software to businesses, "and we intend to take full advantage of it."

ANOTHER HEADACHE FOR IT
With the SDK, Apple hopes the iPhone will join a long and growing list of mobile platforms that developers have to design for--and IT departments have to support. With Symbian, Windows Mobile, and BlackBerry firmly entrenched, and recent entrants such as Android and the iPhone, the number of handheld operating systems shows no signs of contracting anytime soon. "Rather than getting down to smaller numbers, the market is getting more fragmented," says former Palm executive Michael Mace, now a principal at Rubicon Consulting. "It's driving developers crazy."

And IT departments, which must grapple with all the varieties employees use and the growing number of business applications emerging for the devices. The days of limiting employees to one choice of smartphone are over. "We've seen a lot of enterprise IT folks come to us looking for how to bar the iPhone from their wireless LAN," says Chris Silva, an analyst at Forrester Research. "Our experience has been that IT departments are actively working against iPhone adoption." That, he adds, "as a policy is not a great one."

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Apple brings not only its sleek design and broad multimedia capabilities, but also a big screen and its Safari browser--making it appealing for mobile business apps based in the Internet cloud. Like the desktop environment, the mobile one will migrate toward Google-style Web applications over built-in apps. Such a migration would ease the problem of developing for and supporting multiple applications tailored for specific mobile operating systems, but it's still years off. Like the desktop, certain applications--particularly complex enterprise apps--will need some code based on the device.

Meantime, Steve Jobs appears mindful that his company almost went under in the 1980s when independent developers flocked in droves to Windows and away from the Macintosh. "Apple has always had a love-hate relationship with developers," says Carmi Levy, senior VP of consulting at AR Communications, "and it needs to learn the important lesson of getting people behind your platform if the iPhone is going to be the mobile platform of choice." Jobs seems determined not to make the same mistake this time.