iPhone Software 3.0

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Live Update: iPhone Software 3.0

9:48 PT - DM: Good morning and welcome to Macworld's live coverage of the iPhone 3.0 event. I'm Associate Editor Dan Moren alongside Editorial Director Jason Snell and we're coming to you live from the Apple Town Hall at Infinite Loop.

9:49 PT - DM: We're being serenaded to the sounds of what appears to be Jack Johnson while the various attendees find their seats. Phil Schiller's up at the front of the room, as is Greg Joswiak. They're really packing them in here; it's a pretty small venue.

9:54 PT - DM: Very kindly they've actually provided power strips for us; sadly, the same cannot be said for network connections.

9:55 PT - DM: "15 Step" by Radiohead. "You, Me & The Bourgeoisie" by The Submarines playing. We've been told that we're beginning in a just a moment here. And now we're on to Dave Matthews or something. Of course, as soon as I know a song, they change it. Thanks, Apple.

10:01 PT - DM: And here we go. Greg Joswiak has come out for the introductory remarks. A lot of iPhone app developers are here as well. It's a preview of iPhone 3.0 OS, naturally. Scott Forstall will be joining him as well as we take a look at the future plans.

10:01 PT - DM: A recap: the iPhone is now in 80 countries around the world, as of this week. We started two years ago at one country, and now 80 countries. Set a goal of 10 million iPhones in first calendar year, 2008, and they ended up selling 13.7 million.

10:02 PT - DM: Sales from June 2007 from December 2008, 17 million iPhones sold, and the sales definitely accelerated with the iPhone 3G. iPhone not the only product running iPhone OS; there's the touch. Over same time period, 30 million iPhone OS devices sold through end of 2008. Great opportunity for app developers.

10:03 PT - DM: First introduced beta of iPhone SDK a year ago. In one year, over 800,000 downloads of the SDK. There are also over 50,000 members of the paid developer program. Most of the developers, over 60%, were new to Apple platforms. Big developers and small developers alike. A quote from Michel Guillemot of Gameloft saying that the iPhone OS is the "next great development platform."

10:04 PT - DM: The small guys can succeed as well. Steve Demeter of Trism, who's here today, has made a short video. He's talking about being a long-time gamer, and action shots of him coding!

10:06 PT - DM: "The App Store is a meritocracy," says Demeter.

10:06 PT - JS: Since this is partially an announcement of the new SDK for developers, it's not too surprising that there's a focus on developers. Developers are in the audience, too. Also, good choice to lead off with Joswiak, I think -- he's always been one of Apple's most credible and likeable spokespeople.

10:06 PT - DM: Over 25,000 apps in the store today. A lot of curiosity of the app store admission process. 96% of apps submitted are approved. Moving apps through the store faster than ever; 98% of apps approved in 7 days or less. Now have passed 800 million downloads on the App Store in 8 months time.

10:07 PT - DM: Joz is thanking the developers for giving customers more reasons to buy iPhone/iPod touch (see, it drives hardware sales!).

10:08 PT - DM: So clearly we've created something profound. But this is just the beginning; imagine where it's going to be in the comings months. Joz is introducing Scott Forstall to talk about iPhone OS 3.0

10:08 PT - DM: Scott looking very hip in a black zip-up. I wonder who does his hair. 3.0 is a major update to the iPhone OS. Comes with "incredible features" for developers and customers. Here's what's on tap for developers.

10:08 PT - DM: SDK announced a year ago, and enabled developers to use same APIs and tools used internally. The goal was to make developers successful, by giving them the best tools, APIs, and frameworks for building applications. Apple was blown away by what developers did with it. Spent the last year to make the SDK even better. iPhone 3.0 brings next generation of SDK (apparently with a weird globe app).

10:09 PT - DM: More than 1,000 new APIs for developers. Scott's going to tell us a little bit about enhancements to the App Store. The App Store is a great business deal—most of this is recap on how the App Store currently works. 70% of revenue goes straight to the developers, who are paid monthly.

10:11 PT - DM: Some developers have come to Apple saying there are other business models they'd like: subscriptions, for example. Magazine publishers would like to have those; game developers would like to be able to sell additional levels from inside the game; other new content that developers might want to sell from inside the application—ebooks, for example. Ebook developers would like to sell ebook app, and then put bookstore in the app. All of these additional purchase models will be supported in iPhone 3.0 with In-App Purchase.

10:12 PT - DM: He's showing off a magazine app, where you can purchase 6 more months for $4.99. Here's a game, where you can purchase additional levels from inside the app. Now, here's a city guide, where you can sell different guides from inside the app. The whole thing is tied into the iTunes Store; tap on "buy" and it brings up the standard iTunes credential panel.

10:13 PT - JS: This is a big addition in terms of flexibility, but it also lets certain content providers finally take advantage of the store. For example, a newspaper could sell a premium subscription via their iPhone app. (Might this help save the newspapers from destruction?) Likewise it lets you download a single app and then add content to it. Nice. Before there were issues about apps for content providers, because they last forever. It was just a one-time fee. Now publishers can charge monthly or yearly (or whatever) and get an ongoing revenue stream.

10:14 PT - DM: The business model for in-app purchase is same as App Store. Developer sets price; 70% of the revenue for developer (Apple takes the 30% cut, but no credit card or hosting fees). This is for paid apps only. Free applications remain free; you can't buy things from inside free applications.

10:15 PT - DM: Peer to Peer connectivity—especially good for peer-to-peer games. Now an API lets you find all the other iPhones/iPod touches in the area playing the same game, so now you can play games with your friends over the network locally. Automatic discovery, all over Bluetooth (not via Wi-Fi), and there's no pairing—completely seamless. It also uses Bonjour. Plus, it's not just for games—works for any peer-to-peer application.

10:16 PT - JS: Using Bluetooth is really smart, since it means you can play games or share information with anyone, regardless of whether or not there's a wi-fi network around. Makes it much easier. (But what does that mean about iPod touch?)

10:16 PT - DM: Here's an example: you'd like to send somebody a contact. Your company could build an application that will find your colleague's phone and share that contact.

10:17 PT - DM: Next up, accessories. Thousands of developers are building thousands of accessories that work with iPods and iPhones. Here's a speaker, for example: plug your iPhone in and listen to your music. With iPhone 3.0 support is going to the next level: enable accessory developers to build custom applications that talk right to the accessories. Speaker manufacturer can build an equalizer app that can adjust settings of the speaker. Or an FM Transmitter; you can build an app to help find the optimal frequency and tunes it automatically.

10:18 PT - JS: This has been a huge request for some time -- giving apps access to hardware attached via the dock connector. The possibilities are really endless. Certainly accessory vendors will be jumping for joy at this news. And Apple's suggestion that this could be used in medicine is fascinating -- Apple really loves showing off the medical industry at these events.

10:18 PT - DM: Another category: medical applications. For example, a blood pressure cuff that talks to the phone and can help you track your blood pressure over time. So, developers can now take more advantage of accessories, talking to accessories via dock-connector *or* via Bluetooth. You can also build your own custom protocols, as well as use the standard protocols (listening to music, for example).

10:19 PT - JS: I'm sensing a strong support for Bluetooth in this presentation so far. Given how bad Bluetooth has been on the iPhone up to now, I'm really encouraged. Is there more?

10:20 PT - DM: Next up is Maps. Worked with Google to build incredible Maps application. Developers would like to embed map into application, but would like a CocoaTouch control that can wrap Maps and insert into applications, and that's what they're offering in iPhone 3.0. The heart of the Maps application is now an API that allows you to embed a map directly in your app. As an example, here's a Concierge application that embeds a map—supports satellite, hybrid, map views, adding own locations, pinch-and-zoom, GPS, and Wi-Fi/cell location. Can even reverse geocode your location.

10:22 PT - DM: Developers can also use Core Location as basis for turn-by-turn direction applications (score one for my wishlist!). GPS, Wi-Fi, and cell location. There is one catch however: bring your own maps. Due to licensing, they can't use built-in map tiles for turn-by-turn (that'll be Google's API license). But you can use your own maps.

10:23 PT - JS: Big win. Every iPhone can be its own GPS nav system once 3.0 arrives. They're really checking all the boxes, aren't they?

10:22 PT - DM: Push notifications. "You know, we're late on this one." Expected to have it up in production by end of year, but they didn't. There are a few reasons: within two months of launching App Store, there were already 1,000 applications. Huge number of devs came to them and told them how excited they were, and the volumes were more than they'd expected, so they had to completely rearchitect it and make it really, really scalable. "Now we're good to go."

10:24 PT - JS: A little sigh of sadness from those of us who thought the lack of push notifications meant that Apple would be giving up on push notification and adding some support for background processes.

10:24 PT - DM: Why not just do background processes? It's not good for the customer: 1) battery life—phone can't sleep, can't go to lowest power state. They've been testing this with a popular IM client on a bunch of phones (Windows MObile, etc). Didn't send or receive any messages, just ran it in the background. Measured stand-by time. Stand-by time dropped by 80% or more just by having it run in the background. Using notifications, stand-by only decreased by 23%. 2) Performance: background processes chew up CPU cycles, so it's slowing down the foreground app. Hence, push notifications. Already working with third-party devs to use it.

10:26 PT - JS: It's all true. But there are still applications that really need to have some awareness of what's going on when they're not running. If it's not an option to run them at all, Apple is reducing the flexibility of the phone and it's risking falling behind Android and possibly even Palm in terms of flexibility and functionality. Push notification is not a cure-all.

10:25 PT - DM: Here's how it works. Example, IM application. While it's running, it's connected to the server, so you can just send information over the network. When app isn't running, it can uses the Apple notification system, which is persistently connected. There are three types of notifications: badges, audio alerts, and also text alerts—which appear just like SMS alerts. (This is all pretty similar to the notification system as described at last year's WWDC).

10:27 PT - DM: This model scales, Scott says. IT's a unified generic push notification service for all developers. They've also optimized it for mobile networks. Since they're in over 80 countries, with over 25 carriers, there are a bunch of different configurations. Apple does the hard work keeping the connection open. "And now it's really scalable and ready to go."

10:27 PT - DM: These are a few of the thousand APIs in iPhone 3.0. Also, in-app e-mail, proximity sensor is available, the built-in iPod library is now accessible, streaming audio and video (new standard over HTTP that goes through firewalls), shake API, data detectors, and in-game voice (built-in voice chat for games, for example). Just a few of the over 1,000 APIs for developers in the new SDK.

10:29 PT - DM: They called in a few developers to take a sneak peek at the iPhone 3.0. They're going to come up and show us what they managed to do in just a couple weeks. First up is Meebo.

10:29 PT - DM: Over 45 million sending over 5 billion messages a month, Meebo is one of the fastest growing social networks out there. Now coming native to the iPhone. Here's Seth Sternberg.

10:30 PT - DM: Sternberg's one of Meebo co-founders, and he's going to show us the application. Lets you use IM over the web and from the computer, no matter what IM network you use: AIM, MSN, Facebook, MySpace, and via partner sites like IGN and My Yearbook.

10:31 PT - DM: And there's a push notification asking if Seth can bring milk on the way home. Meebo felt that push notifications was the last ingredient they needed.

10:33 PT - DM: Next up is Electronic Arts. One of the largest game developers in the world, already have 10 games on the App Store including Tetris, Spore, Sim City, and Monopoly. Travis Boatman is going to tell us what they've done with 3.0.

10:34 PT - DM: EA is showing off The Sims and what they get from iPhone 3.0. They've got a sim named "Scott." They're customizing and upgrading his house, but there are new items that get populated over the network, where you can pay real money (via in-app purchase) for items. Scott likes his new stereo; and now they can play music from the iPod library via the stereo in-game.

10:36 PT - DM: Now we have Oracle. The largest business software company in the world. They already have five apps on the App Store, and here's Hody Crouch to talk about what they've got for us.

10:36 PT - DM: Here's an alert on the iPhone that gives him a notification that there's low inventory on the teddy bear production line (Critically low on plastic eyes!).

10:38 PT - DM: Can use the Mobile Sales app to help contact the vendor who will be most affected, and can send an email directly from the app without having to leave the application.

10:39 PT - DM: Scott's back. J.D. Power & Assoc. ranked iPhone #1 in customer satisfaction among business smartphone users. Now, onto ESPN.

10:40 PT - DM: ESPN's bringing out a native app. Oke Okaro is coming up to show it off. They've got an alert service that delivers 50 million alerts per month to sports fan. The iPhone 3.0 SDK can help them. Here's an example of a push notification that brings up a text message, plays the well-known "ESPN tone", and badges the application. Here's a video highlight from the UCONN/Syracuse six overtimes game.

10:42 PT - DM: Normally what you'd have to do is visit ESPN and pull the video down, but now ESPN can deliver the video to you using the new video player, which optimizes quality based on connection. Instead of having to deliver for the lowest common denominator, the new media player does the heavy lifting. But that's not all: ESPN delivers a well-rounded experience. They're also integrating with the mobile website to get the analysis, stats, etc. There you go, sports fans.

10:45 PT - JS: Audience reaction of the day so far is to the ESPN theme song being played as a notification tone. Very well done, very funny.

10:44 PT - DM: That's why they've spent six months rearchitecting push notifications, said Scott. Next up is LifeScan (a Johnson & Johnson company), which is a glucose-monitoring system. Anita Mathew of J&J will tell us what they can get from iPhone 3.0.

10:45 PT - DM: As an example, here's a 15-year old girl who's diabetic. She has to track glucose and give herself insulin injections. It's lunch time: how much insulin does she have to take before her meal? She could have to do that 6 times a day; now using the iPhone, it can transmit information to her iPhone. Then she can mark the reading as Fasting, Before, or After meals and add notes. She can then go into the meal builder, and pick the type of food she's going to have and use it to estimate how much carbohydrate she'll be taking in; then it can help calculate the insulin dose that she needs. Better than having to do it in her head.

10:48 PT - DM: In addition, the application can let diabetic users communicate with each other, or with caretakers, parents, doctors, etc. And she can send a message with her glucose numbers to her folks to let them know she's okay. There's also a history view of all of her readings that lets her help track her condition; there's a graphic representation as well. You can tap on a dot and get an idea of why there are outliers, and figure out why certain readings are out of range.

10:50 PT - DM: Working with Apple and health agencies like FDA to make sure everything is compliant. Hope to move people from dealing with burdensome diseases to managing a lifestyle.

10:51 PT - DM: ngmoco is up next. It's Neil Young! But not that Neil Young. The Neil Young who develops games for the iPhone. Pointing out that the iPhone is a great game machine because it's always on, it's always with you, and it's always connected to the network. "Today, we're going to show you two games that couldn't be further apart in terms of content, but both take advantage of the network and new features of Apple's 3.0 SDK." First is TouchPets, a "social pets simulator," and second is LiveFire, a multiplayer first-person shooter played over wi-fi or 3G.

10:53 PT - DM: TouchPets has an embedded social network, and you can have playdates with other people's dogs on your device. It's Scruff and Mittens jumping around and yipping. They're going to go to the TouchPets store and buy Scruff something slick so his playdate will go well. There are more item packs that can be purchased, which brings in the in-app commerce API, and the new itmes are now available.

10:54 PT - DM: Successful playdate results will be broadcast on the social network for all his friends. Now we're going to jump into a shooting game with no segue whatsoever. Hopefully puppies are not involved in this.

10:56 PT - JS: Wow, these guys are all over the in-app commerce engine. You can buy shirts for the dog right within the app. Dangerous.... I was going to say my daughter would love this game, but now I'm thinking how much stuff she'd buy.

10:56 PT - DM: Ohh, he got 0wn3d. "If you've ever played a first-person shooter for the first time, that may have happened to you." Now he can pull up his friend list and invite Neil in. He can bring up in-app commerce in the meantime and buy a rocket launcher. Now Neil's in the game, and the two of them can try tot ake on their adversary. And they rocketed their adversary into tiny little bits. Well done.

10:57 PT - JS: It's rare that you get fluffy puppies and demos from Oracle within the same 15-minute span at any event.

10:57 PT - DM: Scott: "I have no idea how they have the same developers creating both of those applications." And now smule, the creator of the ocarina application. Dr. Ge Wang is coming up to talk about a brand new musical instrument they're creating with iPhone 3.0.

10:58 PT - DM: Wang works at Stanford and researches computers and music. Without the iPhone and the SDK there'd be no smule today. They created Ocarina in November 2008. More than 700,000 users around the world. Here's their new app, Leaf Trombone: World Stage.

11:00 PT - JS: To be fair, he did describe this app as "whimsical and wacky."

11:00 PT - DM: It's the world's first online massively social music playing experience. Using the SDK's game kit they've added Duet play, allowing two leaf trombonists in close proximity to do a multi-part process. The two of them are now going to perform for us—the world's first leaf trombone duet. This is "Phantom of the Opera" on Leaf Trombone.

11:03 PT - JS: Paging Andrew Lloyd Webber. No, wait. Don't page him. Seriously.

11:03 PT - DM: Scott: "How can I go on after that?" Created SDK to make developers successful, and worked really hard to do that. Get up in the morning and work their asses off to see what developers can produce.

11:03 PT - DM: But iPhone 3.0 isn't just new for developers; it's new for customers too. More than 100 new features, and let's take a walk through: CUT COPY and PASTE. There's a round of applause at the appearance of a scissors icon. They think they've nailed it and Scott's going to demo for us now.

11:04 PT - DM: Scott launches Mail, and here's a message from a colleague about a flight to Hawaii (Oceanic 815? Don't get on that plane Scott!). Double-tap onto text and it automatically selects text. Pops up a cut, copy, paste bubble above the selection, and little tiny bubbles on both sides of the text, indicating the selection points. Double tap to bring up paste bubble (there's also select and select all). Want to select block? Drag the second selection point, it pops up a magnifyer, and you can adjust the end-point. That's it. I'm going to copy and paste like a fool when I get 3.0. Just because I can.

11:06 PT - DM: Now, copy and paste between applications. Selecting a note in Notes and you can select text in a note, copy, leave notes to go back to mail, tap to bring up the bubble, paste and voila.

11:06 PT - DM: Copy can also copy HTML. "I'd like to swim with the dolphins." Put the finger and it'll select the block. It uses the same technology that helps Safari figure out how to zoom in to detect the blocks. Paste back in Mail and it pastes in the rich text. Say you didn't mean to paste that? Shake to Undo! Shake it again and you can redo paste. Undo and redo multiple times.

11:08 PT - JS: Our long national nightmare is over. Seriously, it's a very nice implementation. Doesn't feel welded on -- feels very natural.

11:08 PT - DM: Now in SMS; someone said him a message abotu Iolani Palace. Hold finger down on bubble and it selects the entire bubble, now he can go back and paste it into email. So far only copy and paste from Apple apps, but it works in third-party apps too. Scott goes into a Wikipedia app and checks out information about tour information. Copy, leave the app, back to mail and paste.

11:09 PT - DM: Here's something else: photos. Now you can send multiple photos. Go into an album, go into selection mode, tap multiple photos, and you can copy them and paste them into Mail. Copy/paste in iPhone 3.0.

11:10 PT - DM: Cut, copy, and paste accessible to all apps, undo support, developer APIs, and Cocoa Touch supports copy/paste built-in. No work or very minimal work to bring it to your app.

11:11 PT - DM: Next: landscape. Safari's had built-in landcape, of course. Users liked the widescreen landscape keyboard. Landscape and landscape keyboard are in all key applications: starting with Mail. Mail has a landscape mode; great for widescreen attachments. And the landscape keyboard can be used to write messages in Mail. Notes as well has landscape mode and keyboard. And SMS.

11:12 PT - DM: Which, coincidetally Scott has called "Messages" and here's why. Messages app now can forward and delete messages, either individual or multiple messages. But the BIG news is support for MMS. Not quite as much applause as for copy and paste, but it's pretty good. You can now send and receive photos, contacts (using vCard standard, and automatically add it to your contact list), audio files, and locations. All of this is in the existing application.

11:14 PT - DM: Brand new application. Voice Memos. Shows an image of a fancy microphone and a VU meter. You can use the built-in microphone or an external microphone; you can edit the memo by trimming it and share it via email or MMS.

11:15 PT - JS: And thus we see the life of the Apple ecosystem -- third-party developers who created voice memo apps will have a tougher time now. (Though not impossible, as Apple's app seems fairly basic at a glance.)

11:14 PT - DM: Calendar. iPhone 1.0 supported personal calendars, synchronized to Mac/PC using iTunes. iPhone 2.0 added Exchange, syncing via ActiveSync. iPhone 3.0 adds two additional calendar types: CalDAV, used by Yahoo, Google, Oracle, OS X Server, etc. Great for shared calendars for families. And support for subscriptions via the .ics format: sports schedules, national holidays, movies, etc.

11:16 PT - DM: Stocks? Seriously? We're talking about Stocks? Well, I guess the economy's tough. Adding support for news headlines in the app, and detailed info about P/E, market cap, etc. And there's landscape support.

11:17 PT - JS: I get depressed just thinking about the Stocks app.

11:16 PT - DM: Search! iPhone 2.0 added support for search in contacts. Customers loved it, and so they're adding search to all key applications, starting with Mail. Search messages, From, To, Subject, and all headers (but not body text?). Can continue search on server if it's not on your iPhone currently (supported by Exchange, most IMAP servers). Also, search in Calendar and search in iPod. And search in Notes, title or body. But we didn't stop there, said Scott. Wouldn't it be nice if there was a single location where you could search them all?

11:18 PT - DM: New Home screen called Spotlight. It's to the left of the original home screen, with a little magnifying glass icon, where you can search everything. Here's a demo.

11:19 PT - JS: Interesting -- this breaks down the classic iPhone home-screen metaphor for the first time by adding a search pane to the left of the first page of your apps. But hooray for iPhone-wide search features.

11:19 PT - DM: Here we are on the Home screen; flick to the left, and it brings up a search field. Searching for "Tim." It's searched across the phone: first hits, contacts. Tap the result and it takes you to the Phone app. The next items are are applications. If you have over 100 apps, like Scott, it makes it easy to find and launch an app quickly. The next items are the iPod library; tap it and it launches the iPod application. Also notes, emails, and even a calendar appointment. That is Spotlight.

11:21 PT - DM: These are only a few of the 100 new features in iPhone 3.0. We'll touch on a few. Note sync! They now sync with the Mac or PC via iTunes. Shake to shuffle, taken from nano. Wi-Fi auto login; Stereo Bluetooth (A2DP profile of Bluetooth), YouTube accounts now supported (share favorites), Languages (greatly enhanced support, adding more languages and improving keyboards for languages around the world), Auto-fill, anti-phishing, extended Parental Controls, and more.

11:23 PT - JS: Wow, that was fast. There's a whole bunch there that we'll be contemplating in the coming days, all on a single slide. A lot to process.

11:23 PT - DM: So, iPhone 3.0. New features for developers and consumers. We're recapping the announcements that we've already seen. "We're really excited about it. We can't wait for you to get your hands on it."

11:24 PT - DM: And Scott's turning things back over to Joz for the nitty-gritty details like availability.

11:25 PT - DM: Developer beta is available today. Be avilable to everybody in iPhone developer program. Starting today, all sorts of info available. Much more technical information on everything shown today. Developer forums now available for programmers. iPhone 3.0 is designed to be compatible, but developers should start testing now.

11:26 PT - DM: The App Store has been available in 62 countries of the 80 countries the iPhone is in. The App Store now available in 77 countries around the world, increasing the audience. To take advantage of additional countries, check out developer.apple.com.

11:26 PT - DM: What about the rest of us? iPhone 3.0 will be a great customer release when available: "this summer." Free to all iPhone 3G customers. And it's enabled to work on the original iPhone as well. Not all features will be available on original iPhone (MMS and stereo Bluetooth, for example.) Also software update for iPod touch customers, for both generations. $9.95 for touch users.

11:27 PT - DM: Joz appears to be wrapping things up here. And that's all she—by which I mean, me—wrote. Thanks for joining our liveblog coverage, we'll have plenty more coverage on Macworld.com about the announcements from this morning. Phil and Scott are coming up for a short Q&A.

11:32 PT - DM: So here are Phil, Scott, and Joz here to answer questions about the OS 3.0. They're not going to address many financial questions because they're in their "quiet period" (it's like being in the library.)

11:33 PT - DM: Josh Quittner from Time wants to know why cut/paste took so long. Scott says the user interface took some time, you need to have a pasteboard server that runs across all apps, got to protect from malicious.

11:35 PT - JS: Interesting way of putting it: it seems simple, but it's actually not so simple to do copy and paste.

11:33 PT - DM: USA Today asking about Flash. Phil says there are no announcements on that topic today. Scott says if people put video in HTML5, it's supported, with certain encodings, like H.264. Also HTTP streaming for audio and video, codecs and chunking support. They think that's a lot of great video solutions available. ESPN, for example, using the new HTTP streaming APIs.

11:35 PT - DM: Nikkei Electronics: The peer-to-peer. Over Bluetooth and other connections? Scott: The API is about device-to-device via Bluetooth and Bonjour to make IP connection between two devices. But it's separate from devices. Accessory makers can talk to accessories over Bluetooth. Accessories are limited to Made for iPod/iPhone accessories.

11:37 PT - DM: MarketWatch: Can people trade files, like music, over iPods? Music can be streamed to apps; if games had music as an element—TapTap Revenge, for example? But, no music files can't be traded.

11:38 PT - DM: Tim Bajarin: What about tethering (sharing internet connection from phone to computer)? There's two pieces needed for that: client-side needs to support tethering; second is working with carriers. We are absolutely supporting tethering on client side on iPhone. Also working with carriers around the world, and it is coming.

11:39 PT - DM: BBC: Can you say anything about hardware? Phil: Nothing to announce today. BBC: Netbooks? Phil: Nothing to announce today.

11:39 PT - DM: CrunchGear: Bluetooth hardware profile? External keyboad? Nothing to announce for 3.0.

11:40 PT - DM: Tom Krazit CNet: Push notification, any uptime guarantees? Scott: We want it to be as reliable as possible, but no guarantees.

11:40 PT - DM: CBS News: Voice memo mentioned external microphones. Any adapters that would use off the shelf mics? Joz says absolutely.

11:41 PT - DM: Engadget: Any of the performance issues? Lagging, etc. Addressing that in 3.0? Scott: Take performance very seriously. These demo units are tethered and a little bit more laggy. Care about performance and are addressing it in a number of ways.

11:42 PT - DM: Jason's got a question (or two)! Compatibility issues: Bluetooth on the iPod touch? The second-generation of touch DOES have Bluetooth it appears. MMS on first-generation on iPhone? Is there a physical hardware problem that prevents it? It's a different radio, so there is a hardware issue.

11:43 PT - DM: Steven Levy from Wired: Would peer-to-peer allow access to iTunes libraries? Scott's thinking about it. Could you serve up audio files over Bluetooth? Scott says two parts: is it possible and would the App Store allow it? Scott doesn't know the answer to that. Could browse music and play it remotely, but could you stream it to another phone? Probably not, says Scott—doesn't think API doesn't provide access. Could you stream? Scott doesn't think so. "Thanks for playing Stump the Expert," says Joz.

11:45 PT - DM: Harry McCracken: Any comments about the App Store application process and the criticisms there? Phil says growth rate has been unprecedented, talking about how prolific the App Store. They've improved turnaround time, and touts the 96% approval rating. There are some things that they need to check and filter for: #1) simply that it works well; that's the majority of interaction. Also watch for profanity, pornography, violating customers privacy. Issues around content suitable for children; Phil alleges that parental controls will help handle that (will that imply some sort of rating for apps?). Tracking the numbers to try and improve the communications with developers. Phil says they'll email or often call developers to help work with them.

11:47 PT - DM: Phil's going to wrap it up on that, and that is truly all that we have written. As I said earlier, we'll have more coming on Macworld.com throughout the day and week about the announcements that we've seen here today, with news, analysis, and opinion about what they mean for the iPhone and for Apple. Thanks for tuning in.

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