While many people-including myself-have clamored for support for widgets and applications, Monday's announcement actually did nothing at all to address either issue. Instead, it told developers that since Safari on the iPhone is a full-fledged web browser, they can use Ajax and CSS to make nice, pretty Web-based applications.
Now, don't get me wrong, you can do quite a bit with Ajax and CSS, as the demo of an Apple-created address book lookup tool showed. However, tools created using this solution are not true applications, as compared to the other programs on the iPhone. For instance, you can't tap on the program to launch it. There won't be an icon on the iPhone's screen, next to Apple's icons.
And that's not all. Because these applications only work with a live Safari connection, you won't be able to program offline:
And as Christopher Breen pointed out, we're 18 days from launch and we still have no idea how much the data plans will cost (nor how they'll be structured) for the iPhone. If the plans include monthly limits, then each time you run a third-party application-even if that app doesn't really need to use the Internet for any reason-you'll eat up some minutes to download and run the program.
For a developer, there's a huge difference between being able to give your users an icon on the iPhone's screen and telling them to load Safari and visit a Web page. As a user, the first feels like a "real" solution while the second feels like, well, visiting a Web page. And as a user, I know I don't want to have to re-download (especially if I'm paying for it each time) these applications any time I use them. I want them on the iPhone's screen, right there next to Apple's offerings.
In short, this is a good first step for many users, but for real developers it won't cut the mustard. Nothing short of full offline and online access to applications will allow developers to create useful and, more importantly, shareable applications. Without that, the iPhone and its Safari browser will just have a glorified, high-powered version customization.