Apple Tricks Out New iPhone OS

The iPhoneophiles spoke and Apple (Nasdaq: AAPL) listened; copy-and-paste will finally be heading to an iPhone near you this summer. But the real question many technology analysts are asking: Can Apple copy other features now in use by competing software providers and paste them into the supremely popular iPhone ecosystem?

Partial answers were provided Tuesday in Cupertino as a parade of company executives not named Steve Jobs unveiled iPhone OS 3.0, with the newest features and enhancements to its best-selling smartphone operating system.

An Event In Itself

As with any new Apple hardware or software release, the announcements were accompanied by a growing number of live blogs on the Web, as tech observers awaited information on how the company would attempt to grow its already-considerable popularity with its consumer base while trying to take on Research In Motion (Nasdaq: RIMM) and Blackberry's dominance of the enterprise/business customer .

A bullet-point breakdown of some of the new features:

• Copy and paste; now words and sentences can be highlighted with double-taps on the touchscreen and pasted in an email or a browser
• Search; the new Spotlight feature allows complete searchability of the phone
• Support for multimedia message service (MMS)
• Peer-to-peer connectivity, using Bluetooth and a discovery feature called "Bonjour" to enable iPhone/iPod touch hookups
• Push notification; Apple execs admit being late to the game with this but cited battery issues as the reason why (more on this later).
• In-app purchases, opening up a possibly lucrative revenue side-stream; imagine buying items for iPhone games, like clothes for iPhone's version of Nintendogs called "Touch Pets."
• Maps from Google (Nasdaq: GOOG), which includes support for turn-by-turn navigation (although the app developers will have to provide their own maps for that particular service).

In addition to the "Touch Pets" game, Apple announced a new EA "Sims 3" game and a first-person shooter called "LiveFire." The Cupertino crowd saw a diabetes-management demonstration of a Johnson & Johnson (NYSE: JNJ) tool called "LifeScan" that assists with medical records, as well as a new ESPN-themed app.

And for those who want the closest thing to a real-world keyboard while interacting with their iPhone, executives announced that the OS 3.0 will allow email/text writing in landscape mode.

The Immediate Reaction

Apple executives announced that 20 million iPhones and iPod touches were sold worldwide by the end of 2008, and that the App Store saw 800 million downloads in just 8 months.

The App Store turnstiles are likely to spin even faster as Apple did enrich its mobile platform with the 3.0 changes, Gartner (NYSE: IT) analyst Ken Dulaney said. "They made some nice enhancements in this release," Dulaney told MacNewsWorld. "Most important to us are items like cut and paste. The improvements in usability are significant too. The App Store improvements will enable lots of new services that consumers are going to like."

"They've definitely added some things that do upgrade the OS," ABI Research analyst Michael Morgan told MacNewsWorld. "It is an improvement, bringing extra usability and user experience simplification. But is it a game-changer or just a reason to buy the new iPhone?"

Morgan sees real possibilities with the Spotlight search feature that point to how consumers interact with initially intimidating yet must-have technology. "Now that you can search for anything, you can start to bring hidden functionality in the device closer to the front, so this gives opportunities for non-recognized apps or things buried in the system to be more useful. That's a good improvement for any device. It can get rid of initial pain points when you get a smartphone. When you buy it, there's two hours gone to set it up. I've seen Venn diagrams that have a big circle for what your smartphone can do, and a little tiny circle for what you know how to use."

The software development kit (SDK) for iPhone 3.0 is already out in beta, and Morgan is sure that developers are chomping at the bit to write code for it. "A lot of it sounds like developers can now add more social networking to the apps that they're already developing."

Will Businesses Dial Up iPhone OS 3.0?

Apple executives onstage crowed about the iPhone getting high marks in customer satisfaction from business software users while announcing Oracle's (Nasdaq: ORCL) Mobile Sales Assistant, a customer relationship management (CRM) app for the device. But Dulaney believes there are still obstacles to total enterprise acceptance of the iPhone, and they go back to the problems with power management issues.

"If I am disappointed in anything, it is in Apple's insistence that background processing is not workable," Dulaney said. "They cite tremendous drop-off in battery performance. But products like Symbian's and RIM's OS's have background processing and have been able to manage battery life in excess of what Apple delivers. This must be due to some fundamental issue within the OS X base code that doesn't provide power control over the applications. This eliminates important business applications like PBX telephony integration, third-party security products and third-party management tools. You will see them but they will not work as well as they do on other platforms."

The new push notification features require that the user must still take additional actions once notified, Dulaney said. "Enterprise users simply have not shown the discipline to do things like this."

For Morgan, the business pickup for the iPhone -- or lack thereof -- depends on a keyboard. "It's a personal opinion, but when it comes to email and heavy text, I'm a keyboard guy, I've got to have buttons. I know they say they [Apple] has ways to help you find the buttons you need on an iPhone, but I've never found it to be as efficient as a keyboard. I think business users might feel the same way."