Apple Underwhelms

The formula is simple: Steve Jobs Steve Jobs appears onstage. Rapture ensues. But not today.

The Apple chief executive spoke to some 5,000 engineer and programmers here today, dishing out dribs and drabs of news ranging from the mundane to the disappointing during his keynote speech. In response: mild applause.

Jobs unveiled a few previously unknown features within the Leopard operating system, due in October, and again talked up his iPhone, due at the end of this month. But he didn't offer the crowd anything in the way of red meat. And the news they were most anticipating--that they'd be given significant access to the iPhone's platform, in order to develop new software for the gadget--never materialized. Instead, Jobs told developers that their access to the iPhone platform would be limited to software that can operate within the company's Safari Web browser.

Investors didn't seem impressed either: Apple's stock dropped 3.5%, to $120, by the end of the day.

In past years, Jobs has used the developers' conference to deliver wide-ranging company news, including the decision to switch to Intel's processors in 2005. But this year, 18 days before the company begins the iPhone launch, the only surprise was Apple's move to offer the Safari Web browser for computers running Microsoft's Windows operating system.

Jobs described the decision to allow developers to create Web-based applications for the iPhone as a "sweet story," and used Google as an example of a company whose products are able to succeed purely via a Web browser.

He didn't convince the crowd. "This is almost no story," said Apple software developer Wolf Rentzsch. "I didn't even think they could offer us so little."

Rentzsch and most other developers wanted to be able to program software that could be installed on the iPhone and take advantage of its operating system. Failing that, they had hoped to be able to run "plug-ins" in the Web-based programs they could develop for the iPhone (see "Developers To Jobs: Give Me My iPhone").

Some developers had expected the worst--that Apple wouldn't even offer them a slice of the iPhone pie, much as the company didn't offer much software development opportunity for the iPod platform. "I had a real fear that they were going to say the whole iPhone was locked down," said Ken Case, chief executive of Apple software development company the Omni Group. "We tend to get psyched up for what we're hoping for and then get disappointed, but what Apple's delivering is a step in the right direction."

While consumers won't download applications from independent developers for their iPhones, they now have more software choices from Apple for all types of computers. Apple's third version of its Safari browser will be distributed to Windows users through a Web site, in the way the company spread its iTunes music software to Dell and Hewlett-Packard PC owners.

But PC owners already have a viable alternative to Internet Explorer, the main Windows Web browser. While 78% of computers run IE, about 15% run Mozilla's open-source Firefox browser. Jobs says he intends to grow Safari's 5% share substantially. If he succeeds, Safari could end up taking more users from independent Firefox than IE, which comes preinstalled on most PCs.