Apple's Jobs Adds Business E-Mail Features to IPhone

March 6 (Bloomberg) -- Apple Inc. Chief Executive Officer Steve Jobs, seeking to sell 10 million iPhones this year, added business features to woo customers from the BlackBerry and will let outside developers create programs for the handset.

Starting in June, Apple will push corporate e-mails to the phone, support Microsoft Corp.'s Exchange message system and offer new security functions. Apple also released software that lets outsiders write applications for the phone, and funding from Kleiner Perkins Caufield & Byers for iPhone-based startups.

The moves will help court business users, who have largely shunned the iPhone because the device didn't work with their e- mail and couldn't automatically update messages. Adding support for popular systems such as Exchange could bolster efforts to catch up with Research In Motion Ltd.'s BlackBerry.

``The iPhone now fits a lot better in the enterprise and can compete effectively against RIM and Nokia,'' said Simon Yates, an analyst at Cambridge, Massachusetts-based Forrester Research Inc.

Apple, seeking a third business to expand sales beyond the Macintosh computer and iPod media player, released the iPhone in June and had sold 4 million through Jan. 15. That gave it third place in the market for mobile phones that serve up e-mail and Web pages. Its e-mail features, through services from Google Inc. and Yahoo! Inc., have been better suited for consumers.

BlackBerry Jab

At an event at Apple headquarters in Cupertino, California, to show off the features, Jobs took a jab at Research In Motion by chiding the Canadian company's security.

All BlackBerry e-mails in North America go through Research In Motion computers in its Network Operations Center in Waterloo, Ontario. A failure in one system a few weeks ago caused an outage across the continent.

``Every e-mail message that's sent to a RIM device or from a RIM device goes through a NOC up in Canada,'' Jobs, 53, said. ``That provides a single point of failure but also provides a very interesting security situation.''

Research In Motion's outside public relations company said executives weren't available to comment.

Apple security includes a link between the employer and the users and features that let technology managers wipe out e-mails remotely from devices lost in places like taxis. The company tested the links with the Exchange program with customers such as Walt Disney Co. and Nike Inc.

Apple aims to win 1 percent of the market for mobile phones, which may total about 1 billion devices this year, according to Jobs. The company had 6.5 percent of the global market for so-called smart phones in the fourth quarter, less than Finland's Nokia Oyj and Research In Motion, said Reading, England-based researcher Canalys.

Microsoft Impact

Apple fell $3.56, or 2.9 percent, to $120.93 at 4 p.m. New York time in Nasdaq Stock Market trading. The shares have declined 39 percent this year on concern that an economic slump in the U.S. may lead consumers to curb spending. Research in Motion lost $3.81, or 3.8 percent, to $97.92.

``New features could address issues that are limiting iPhone penetration in the enterprise,'' UBS AG analyst Benjamin Reitzes in New York said last week.

Microsoft leads the market for business messaging and collaboration software, with 34 percent, according to Palo Alto, California-based Radicati Group. Its base of users will grow an average of 15 percent a year until 2011, the researcher said.

Developer Dreams

Venture capital firm Kleiner Perkins will start a $100 million fund for firms that develop iPhone applications, and Apple will be the exclusive distributor of the programs through an online `App Store.' IPhone users will be able to buy applications wirelessly from the device, with Apple sending the software directly to their handset.

``Your dream is to get it in front of every iPhone user and hopefully they love it and buy it,'' Jobs said. ``That's not possible today. Most developers don't have those resources.''

Apple will handle the credit card transactions and then pay developers their sales on a monthly basis, he said. Apple will take a 30 percent cut of each sale, Jobs said. The company doesn't expect to make money on the programs; instead, the fees may help cover some of the cost of running the store, he said.

People wanting to write programs for the iPhone must join Apple's development community for $99 a year. Apple may choose not to sell programs it considers inappropriate, including pornography or malicious software, Jobs said.

IPhone Update

A test version of the software development kit is being released today. Customers will get updated iPhone software in June that allows them to access the new applications and the enterprise features, Apple said. Users of Apple's iPod Touch player will be charged a `nominal' price for the June software update, Jobs said.

Apple's development kit was originally due to be released last month. The iPhone is built on the same operating system software used by the Mac.

Electronic Arts Inc., Salesforce.com Inc. and Time Warner Inc.'s AOL have already started work on applications for the iPhone using Apple's development kit. Electronic Arts wrote a game for the iPhone, while AOL showed its AIM instant messaging technology working on the device.

Jobs originally opposed giving developers the ability to modify the phone because he was concerned that it would open the device up to viruses and piracy. He changed his stance after programmers began writing applications anyway and distributing them on the Internet, bypassing Apple's built-in software for preventing unauthorized use.

``The development tools mean there will be more applications, and that will make the iPhone more attractive to more types of users,'' said Hakim Kriout, an analyst at municipal bond trading and underwriting firm Grigsby & Associates in New York. He owns the shares and advises investors to buy them.