9:05AM - Alright, we're here and registered! We'll be checking in as things get going shortly.



9:26AM - It's minglin' time! The space usually reserved for product demos is hollowed out for the Apple Continental Breakfast today, tons of journos and execs hanging out before the keynote kicks off.





9:51AM - And we're heading in!



9:57AM - "Good morning ladies and gentlemen, welcome to this Apple special event."



10:01AM - Steve's out, "Welcome, we're really excited to share some great news with you about the iPhone software roadmap. We've got some cool stuff to announce, so let's get on with it. I want to share a few statistics about how far we've come with the iPhone..."



The iPhone took 28% market share in Q407, compared to 41% RIM. "As you know, the iPhone really brings the internet to a mobile device for the first time, you have the internet in your pocket -- and that's being borne out by usage stats for mobile browser usage. 71% of US mobile browser usage!"



"So let's get on with what we have to talk about today. I've asked two of my colleagues do the heavy lifting..." Schiller, and Forstall. "First thing we're going to talk about is iPhone in enterprise." Tossing to Phil Schiller. Applause.



10:04AM - "I'm really excited to be the one to talk to you abut iPhone in the enterprise. We've had some great customers at the forefront wanting to adopt the iPhone into their enterprises." Talking about using Genentech using a fleet of iPhones. "We have a lot of great university customers." Stanford, for example; hundreds of iPhones for faculty and staff.

"There are a lot of things enterprise customers have told us that have hold us back from being HUGE in the enterprise. What do they want to take the iPhone into the enterprise. What do they want? Push email -- huge request. They want great calendar integration. They want it pushed to them wherever they are.

10:05AM - They want push contacts, global address list, Cisco IPsec VPN, they want authentication and certs, enterprise class WiFi (WPA2 / 802.1x), security policies, enterprise configuration tools, and they want remote wipe.



10:06AM - "That's a long list of important features enterprise customers want. Well, I'm excited to be the one to tell you today, we're doing ALL these things in the next release of the iPhone software." Big applause, couple of cheers.





10:07AM - "Our customers have asked us to build in MS Exchange right into the iPhone -- we have licensed ActiveSync for the iPhone." Daaamn!



"That's a HUGE request, but how does that work? There's an old way..." icon of a crappy looking QWERTY phone on screen, "with older generation smartphones." He's going over messaging, firewalls, and enterprise scenarios.



10:08AM - "Microsoft has come up with a much more advanced architecture, where the iPhone can work directly with the Exchange server in a more reliable and affordable way. We're building Exchange support so you get push email, push calendaring, push contacts, global address lists, and the ability to remote wipe it."



"The same email app, calendar app, and contact apps that customers really love will get information directly from the Exchange server." So no new apps on the iPhone for using Exchange. Demo time!

10:10AM - Contacts, calendar, mail are all empty -- looks like it's time to do some syncing. "No events -- I kind of like that, keep my day free." Chuckles.



Exchange is at the top of email services, even above .Mac; going into settings; you can flip on contacts, calendars, mail, and all this stuff flipping simple switches. Not bad!

10:13AM - The contacts are all there instantly. If Steve were on stage, we're sure there'd be a "Boom" or two. "It's the same apps that customers know and love on the iPhone, but now it's all coming from Exchange."

Testing adding a new contact out in the field. "For those of you who've never typed into an iPhone -- it's awwwesome." Chuckles. And now Bob already has that contact. Bob just updated that same record and it pushed down to the iPhone instantaneously. Applause.

10:14AM - Bob just sent Phil an email and there it is, direct Exchange push email. Demoing meeting changes with live pushes over Exchange.

Demoing remote wipe of the phone -- no user interaction, "I can't stop it, the phone's been wiped and protected." Applause. "Lots of great new features, but you've seen Exchange live, working on the iPhone -- we've been working hard on this." Talking about testing this on-site -- like Nike, for example.

10:18AM - "Another company we've been working with is Disney -- as you may know, we have an executive relationship with Disney." Chuckles. Oh, Phil, you old cornball. "These are the features customers have asked for in the enterprise, and I think when we release these features people will be blown away that the iPhone is The. Best. mobile device ever in enterprise." Tossing to Scott Forstall on the iPhone SDK. Scott!



10:19AM - "Ok, I'm here to tell you about how developers can build great apps on the iPhone. Before I get into the SDK, I want to give an update on web apps. This has been incredibly successful, there are over 1,000 web applications for the iPhone."

He's highlighting some web apps, including Facebook. Yep, great, let's get to the SDK dude.

"Already the iPhone is the most popular mobile device with Bank of America -- it accounts for 20% of ALL mobile banking with them. But today what I really want to tell you about is the native iPhone SDK."

10:21AM - "Starting today... we're opening the same native APIs and tools to build our iPhone apps."



"3rd party developers can build native iPhone apps using the same SDK that WE do. There are a lot of pieces that make up the SDK in a set of APIs -- that suits us well, Apple is a platform company. We have the most advanced platform in the world in the form of OS X. It's comprised of four layers..."



"The core OS, core services, media layer, and Cocoa -- to build the iPhone OS we took the bottom three layers to form the iPhone OS. Cocoa is interesting and it's the best app framework out there, but it's based on a mouse and keyboard. So we took everything we knew.. and built Cocoa Touch."



10:22AM - "This here is the architecture of the iPhone OS -- let me dig a little deeper. We'll start with the kernel. This is the same OS X kernel based on the same project and same source files of OS X; the networking layer we use is the same BSD networking layer we use on OS X. And power management... Apple has more than a decade of experience in advanced power management."



10:25AM - "We started with those advanced power management techniques and went beyond that -- the core OS power manages all of the chips, all the sensors, your application, automatically. Now, core services, I'll just highlight a few. We have a complete set of APIs for your app to talk directly to the contacts DB on the iPhone, and an entire database API with SQLite.

"Core Location - we've taken that and patched it into an API so you can create location-aware applications. The media layer... starting with Core Audio, this is the low-level audio layer; on top of that we've built OpenAL, an industry standard."



10:27AM - "Video playback: seamless video playback, uses our h.264 codec, built right in." So we can add new video codecs right? RIGHT? Sigh. "Core animation... OpenGL ES, the embedded version of OpenGL and a screamer for 3D graphics on the iPhone. In fact, this entire layer is heavily hardware accelerated."



10:29AM - "Cocoa Touch - our advanced touch event system; the accelerometer - what you might not know is that it's a full 3-axis sensor, and you can use that in your apps as well. ... this is the architecture for the iPhone OS, the most advanced mobile platform out there. We think we're years ahead of any other platform. We borrowed heavily from OS X -- we started on the shoulders of a giant."





"We have a comprehensive set of tools to help developers create and debug apps -- let's start with Xcode. We started there and enhanced it to support the iPhone; now we use Xcode to build the OS and apps for the iPhone. What is Xcode? It starts as a great source code editor -- it knows all about the iPhone SDK, will code-complete the APIs for the iPhone SDK."



10:30AM - "... it also integrates directly with source control management system, subversion, cvs... integrates with iPhone SDK documentation, and also has a nice debugger -- it's also a great remote debugger. Plug an iPhone in, run the app live on your iPhone, and be debugging it from your Mac. This is incredibly powerful."



10:32AM - "The next tool I'd like to talk about is Interface-Builder -- this is the tool you'll use to... wait for it... build your application interface. We have the complete library of iPhone interface assets, just drag them onto the canvas." Showing making connections from the view layers to control layers; it's also localizeable. "Next: Instruments..."



"We took those three and enhanced them for the iPhone, but there's a brand new tool: the iPhone Simulator. It runs on a Mac and simulates the entire API stack on your computer."



10:34AM - "So, we have a fantastic set of tools in addition to an amazing set of frameworks." Demo time. iPhone Simulator gets going -- looks identical to using an iPhone. Tiny bit creepy, actually.







10:35AM - Showing Safari in the Simulator, now he's about to build a quick Hello World! app.



10:37AM - Just threw that app together and ran it on the Simulator; "It's just as easy to build and run it live on an iPhone!"



10:39AM - He just compiled the app, dropped it onto the iPhone, ran it, and started the debugger in one step. Not shabby. "This is an app I just built in two minutes -- but we wanted to see what we could build in two days. So we did this app, we called it Touch FX."

10:40AM - Photo picker, applies OpenGL distortion effects on finger tracking; he's pinching and exploding some dude's face -- shaking the phone performs an undo. Applause and giggles.





10:42AM - "Next we decided, what can we do in two weeks? So we wrote a game... Touch Fighter." Dang, not bad, it's 3D, OpenGL... tap anywhere to fire, steer with the accelerometer. Lots of loud "Whoa!"-ing from the audience and applause.









10:44AM - He's testing optimization of the Wing Commander-style game; its live-recording frame rate (about 27-30fps!) and other performance metrics.



He pulls up a low-framerate point, grabs the live stack-trace from that moment to dev. "Don't just take my word on how good this platform is -- we called up a handful of companies and asked them to send out a couple of engineers to see what they could accomplish in two weeks with an SDK that they've never even seen before."

10:47AM - EA is up to bat; Travis Boatman talking about using the SDK. "Thanks to Apple for inviting us to join in on the SDK process." Spore!





It's a stripped down, cartoony version of Spore; accelerometer moves the spore around to eat things in the primordial pond. And, of course, there's the Spore customizer.







10:49AM - Showing video capabilities, too -- big applause. Forstall: "That was TWO weeks of work!" You can see we have a great platform to develop games on, but it's also great for verticals." Toss to Salesforce.com, Chuck Dietrich.



10:51AM - Demoing their SFA app with monthly sales stats - "I'd like to use the accelerometer to shake them into deals -- but we're not gonna do that just yet." Waaaahh, chuckles.





10:53AM - More Salesforce.com stuff -- integrates with maps; most is totally sales-geek that's over our head, but that we're sure our sales guys are somewhere flipping out about right now.

10:55AM - "The next one: AOL, which runs AIM, the most popular IM service in the US." AIM for iPhone!



"I've never developed on a Mac before, never used Objective C -- and we had a live buddy list in five days. This is a live conversation happening over the network..."







10:56AM - Switch between active chats by swiping left and right (applause), status update panel ("Playing Spore!", giggles), choosing photos from your iPhone photo library as your AIM buddy pic. (PS, disclaimer, Engadget is owned by AOL / Time Warner.) Forstall: "Next up, Epocrates," Tossing to Glenn Keighley.

10:58AM - "Developing for the iPhone is like developing for no other platform... it's an almost desktop-like experience." Showing drug monographs (drug spec sheets), SQLite database use for the medication database, reactions, etc.



11:00AM - Back to Scott... Sega! "Sega's been a household gaming name for more than 25 years..." tossing to Ethan Einhorn from Sega.





"Super Monkey Ball was a natural choice."





11:02AM - SMB is entirely accelerometer-based, "This is NOT a cellphone game. It's a console game, if anything, we underestimated what the iPhone was able to do from the start, we had to fly in another artist to scale up the art to match what the iPhone could actually output." Big applause.

11:03AM - Steve's back to answer how you get the stuff on the phone. "You're a dev and you just spent two weeks or a bit longer writing this app, and what's your dream? To get it in front of every iPhone user."

"Hopefully they love it and buy it -- but that's not possible today, even the big developers would have a problem getting their app in front of every iPhone user. It's called the App Store -- and we're putting it on every single iPhone on the next release of the software. This is how we're distributing apps to the iPhone."





11:05AM - "Let's take a look at the App Store -- featured apps, just added, staff favorites... easy to find stuff and browse the categories. Of course, I can see what the most popular apps are that are being downloaded, I can easily search, I can tap on it... this one's free... and it's wirelessly downloaded [over the air!] to the iPhone via cellular or WiFi."







"You can sideload them into the iPhone as well from iTunes. But it goes further: if you've downloaded an app and the dev updates that app, the App Store will tell you it's been updated! If you like it, tap the update button and it'll be replaced by the updated version all over the air, automatically. It will be the EXCLUSIVE way to distribute iPhone applications."

11:07AM - "Devs are going to ask -- this is great! But what's the DEAL? What's the business deal. We've got a great biz deal for developers: you pick the price you want to sell your app at. The dev gets 70% of the revenues right off the top, we keep 30% to pay for running the app store. No CC fees or hosting fees or marketing fees for hosting the app, devs get 70% paid monthly."





11:08AM - "You know what price a lot of devs pick? Free. When they want to distribute their app free, there's NO charge to distribute free apps -- we'll pay everything to get those apps out there for free. Will there be limitations? Of course. Some apps we won't distribute: porn! Malicious apps!"



"So, we've talked about some amazing new enterprise capabilities, we've talked about the SDK -- how are we going to deliver this stuff? Both will be delivered together in the iPhone 2.0 software update. Let me tell you about that."





11:10AM - "It will again combine the SDK + the new capabilities, there will be a beta release going out today to thousands of developers. We need their fantastic feedback. We're going to ship this to every iPhone customer in June, and it's going to be a free software update." Mild applause.

"In just a few months..." MONTHS! "every iPhone user will get what they saw today. But there's another part to this as well: the iPod touch. Everything will run on the iPod touch as well, including enterprise features. We account for the touch differently than we do for the iPhone so there will be a nominal charge for the touch."



11:12AM - "We think a lot of people will want to become an iPhone developer -- go to our site, probably in about an hour, and download the SDK. You can join the developer program to test your app on the iPhone and iPod touch and distribute your app -- to join the dev program costs just $99. If you have any questions about anything give us a ping at developer.apple.com." Irony: someone's Windows Mobile phone just went off.



11:14AM - "The premiere VC firm in the world, KPCB, and it's my great pleasure the most well known partner, John Doerr."



"We're all here today because we LOVE Apple products, and I'm here because I really love Apple entrepreneurs. They do more than anyone thinks possible with less than anyone thinks possible -- the risk takers, the rebels. So it's particularly touching to be here today with the supreme commander of the rebels, Steve Jobs."

11:15AM - "Steve started the whole personal computer industry -- when he left Apple it went downhill fast. He return and resurrected Apple, and even ran Pixar -- please join me in a salute for the World's Greatest Entrepreneur, Steve Jobs." Big applause.

"Alan Kay said, 'The best way to predict the future is to invent it... ' today we're proud to announce the iFund, for the iPhone platform."



"New platforms are rare... we gave a lot of thought to how to start an iFund, so we decided the iFund should be $100m." Ok, but... what is it?



11:16AM - "That should be enough to start a dozen Amazons and a few Googles... you know the Mac and iPod are truly amazing platforms... today we're witnessing history. That's the launching of the SDK, the creation of the third great platform."

"It's about this great opportunity, but it's about more than the money -- it's about the great team at Apple and the great talent we can recruit together. ... if you want to build the future, the iFund wants to help you fund it. I can't wait to see the companies we'll build together." Big, big applause for Doerr.

11:18AM - Steve's back: "I look forward to working with you guys to do just that, it's very exciting. If I could ask the press to just stay here for a few more minutes... thanks for coming!"



We're not done!

11:20AM - A lot of people are filing out, we're still seated waiting for what's next. Looks like it's going to be Q&A, bear with us.

Steve's on stage, Phil as well, they're waiting for people to take off. Steve: "If we can get the press to take their seats..."

11:22AM - Just a peppering of people left. "We wanted to do a Q&A, maybe ten minutes."



Q: "What's the 100m do for the iPhone community, exactly?"

A: "It's because they believe there's an opportunity to invest in the community. We love young innovative developers, and they love it because that's the business they're in too. It helps the whole ecosystem surrounding the iPhone."

11:24AM - Q: "Do you think RIM should be worried? What's the message for them?"

A: "You should ask them... we're not sending them a message, we're sending customers and developers a message that we're trying to serve their needs. Remember, the iPhone's been out less than a year, this stuff will be shipping right around the one year anniversary to every iPhone customer."

Q: "What sort of safeguards are built in to ensure security?"

A: "This is a big concern - it's a dangerous world out there. We've tried to strike a good path here, on one side you've got a closed device like the iPod, it always works. You don't have to worry about 3rd party apps mucking it up. On the other side you've got a Windows PC where people spend a lot of time every day making it usable. We want to take the best of both: reliability of the iPod, but the ability to run 3rd party apps. They get an electronic certificate... if they write a malicious app we can track them down and tell their parents." (Laughter)

11:27AM - Q: "How likely will there be a VoIP?"

A: "We will only limit over cellular -- if you want to dev them for WiFi, that's fine."

Q: "Can people choose multiple sync methods? Let's say you select Exchange, will you also be able to use iCal as well."

A: "Yes, you can have multiple accounts, multiple calendar accounts, multiple contact DBs. Only Exchange account at time though."



Q: "Isn't the fact that Apple is the sole distributor of apps likely to cause monopoly issues?"

A: "We think this is going to be a boon for developers, there's no other way to get an app in front of every single iPhone user." Just to make it a little clearer -- we don't intend to make money off the app store; the split with the music companies is about the same. We give all the money to the content owners and the developers here, and the 30% that pays for the store, that will be great.

11:32AM - We asked: Will SIM unlock software be considered software not allowed in the app store?

A: Steve: (pause) "... yes." Laughter.

Q: "What's the nominal fee on the iPod touch?"

A: "We'll set that in June, we don't look at this as a profit opportunity."

Q: "What do you see as being the IT ease of use? So IT managers can convert from BlackBerry to iPhone?"

A: Phil: "It uses ActiveSync, a familiar system, but also has tools for managing these devices."

11:36AM - Q: "Is this an international rollout? Anything preventing open source apps?"

A: "This is international, but not an open-source project. It's a for-profit project only, even though it's a free update."

Q: "Anything about additional connections? WiMAX?"

A: "We're not here to talk about hardware today."

Q: "How would an entperprise distribute internal applications?"

A: "Working on a special app for internal enterprise applications, it's being worked on."



11:39AM - Apple's added parental controls to the iPhone! In 2.0 parents can turn off features in the iPhone like Safari or the App Store.

11:41AM - Q: "Why'd you change your mind from last year when you said web apps would be the only method of development for the iPhone?"

A: They wanted to create something "great," and "the attention to detail is unbelievable." Steve mentioned living with an SDK for 20 years.

Q: "What's relationship with the carriers? Are you working with the carriers on the App Store?"

A: "We have great relationships with our carriers -- we struck a new kind of relationship where Apple is responsible on the phone. We define the software on the phone, we run the dev program, we distribute the apps! This is our program, and we're running it. (Side Q: no rev share with carriers on apps?) We don't go into it, but we like to see the revenue going the other way."

Q: Will there be a dock-connector API?

A: The answer given was unclear, looks like you still have to work through the Made for iPhone program, but it's difficult to tell whether there's integration between the SDK and external hardware beyond what's already out there.



11:46AM - We're done, thanks everybody!

iPhone 2.0 software update hits in June