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Strategies & Market Trends : Technical analysis for shorts & longs
SPY 681.92-0.7%Dec 31 4:00 PM EST

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To: Johnny Canuck who wrote (44886)7/4/2008 3:57:38 PM
From: Johnny Canuck  Read Replies (1) of 69358
 
Software
Developers Wary Of iPhone
Elizabeth Woyke, 07.04.08, 6:00 AM ET

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Elizabeth Woyke
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Developers of location-based services should be clamoring to make applications for Apple's 3G iPhone, which features built-in global positioning system technology--but they're not.

Instead, many are steering clear of the new device, which will go on sale July 11, because they likely won't be able to make money on Apple's (nasdaq: AAPL - news - people ) iTunes store, which will distribute iPhone apps.

Steve Andler, vice president of marketing at Networks In Motion, an Aliso Viejo, Calif.-based firm that provides GPS services for Verizon (nyse: VZ - news - people ) Wireless, Sprint (nyse: S - news - people ) and Alltel (nyse: AT - news - people ), says the problem is that iTunes ties applications to a user's iTunes account, as opposed to a device. For instance, a customer could have "three iPhones synched to the same iTunes account, and thus would only be paying for one copy of the application, but using it on three devices," Andler says.

ITunes also presents billing challenges for developers, which typically charge users a monthly or daily access fee for mapping services. The firms say their billing system keeps users' data current and helps underwrite the expense of constantly updating maps.

But it's not a system that Apple is embracing, at least not right now. Developers say the company has discussed only two billing options so far: free distribution or a one-time fee. This has left Networks In Motion, which charges $9.99 a month or $2.99 a day for its maps and turn-by-turn directions, cooling its heels.

Then there's the competition factor. Developers speculate Apple has plans to build its own navigation applications, so they're wary of investing in the iPhone despite the handset's popularity. Others are waiting for the phone's July 11 debut to learn more about its GPS capabilities and the kinds of location-aware services that will be available on iTunes.

At its June developer conference, Apple revealed only that the new iPhone will have some form of built-in GPS and support a location-based social networking application called Loopt.

Dutch manufacturer TomTom, which makes GPS services for cars, motorcycles and mobile devices, has tested its navigation software on the iPhone. Its subsidiary Tele Atlas recently inked a five-year deal to license mapping information to Google Maps, which the iPhone uses as its default mapping service.

But TomTom says it has no plans to commercially release the software and is taking a wait-and-see approach. "We will have to look more closely [at] Apple's strategy before we can say more about what kind of opportunities this will bring us," a spokeswoman for TomTom wrote in an e-mail.

Garmin (nasdaq: GRMN - news - people ), another giant in the GPS market, offers a mobile version of its services that works on dozens of phone models, including the BlackBerry and Palm's (nasdaq: PALM - news - people ) Treo--but not the iPhone. One reason may be Garmin's new Nuvifone cellphone, which appears to be an iPhone knock-off with its large touch-screen and slim size.

Even applications from smaller firms are running into problems with the iPhone. New York-based Citysense says its mapping application, which tracks night-life activity, works best when it's constantly running on users' phones.

Citysense Chief Executive and Co-Founder Greg Skibiski says plotting people's movements enables the service to detect which clubs, restaurants and bars are drawing crowds at a particular time. To preserve battery life, however, the iPhone allows only one application to be open at a time, which means Citysense's app likely won't achieve its full potential on the device.

To resolve the one-app-open-at-a-time issue, Apple introduced tools in June that can grab updated location data when users' phones are awoken from "sleep" mode.

Not all location-based applications are awkward fits for the iPhone. Take navigation and continuous location-sensing out of the equation, and the device looks a lot more attractive, say some developers. Urbanspoon, a Seattle-based restaurant directory and review site, prepared an iPhone version of its service using the handset's GPS and Google Maps.

Users can select nearby restaurants and get directions to them using Google Maps. Motion-activated menus flip like slot machine wheels and make the process feel like a game. The application, says Urbanspoon co-founder Ethan Lowry, shows that developers can use basic GPS technology to create entertaining experiences on the iPhone.

Those seeking other types of location services will have to wait--or get another phone.
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