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I'm in Cupertino this morning on the Apple (AAPL) campus at 4 Infinite Loop, where the company is holding a press event to provide a "sneak peak" of the iPhone OS version 3.0. The press has been milling around for at least an hour this morning; the most interesting thing so far was a fire alarm that went off about 30 minutes ago, forcing everyone to temporarily leave the building. But we're all back in the building now, gathered in the Town Hall auditorium for the big event. I'll be blogging live; stay tuned.

With about 15 minutes before the event is scheduled to start Apple shares are up $2.45, or 2.6%, to $97.87.

Pre-Game Musing:

9:47 a.m. Nothing is happening. The stage is set up the usual way, with the large white Apple logo on the screen. Many laptops are in use, and not all of them are Macs. (I'm using my trusty Lenovo x60, for instance.) 9:49 a.m. Nothing yet. I will note that it took me almost no time to get here from midtown Palo Alto. No traffic on 101 South. No traffic on 85 South. No traffic on 280 South. Apparently, no one on Silicon Valley needs to commute anymore, at least not that in direction. 9:51 a.m. As usual, Apple isn't providing free WiFi. Hooray for my Verizon EVDO card. But at least there's a power strip here towards the back of the room. 9:54 a.m. Not much happening. Good time to fill out the NCAA bracket. Go, 'Nova! 9:55 a.m. The "shut off your cell phones and pagers" warning. Who carries a pager? 9:56 a.m. The music is getting louder. 9:58 a.m. The tension mounts. 9:59 a.m. Every seat is taken, which isn't saying much; the room is smaller than the average elementary school auditorium. 10:00 a.m. It's go time. And the lights are dimming...

Here we go!

10:01 a.m. Here we go. The guy on stage is the head of iPhone marketing. Now in 80 countries with the iPhone. Started in one country. Original goal was 10 million iPhones in first calendar year, 2008. Actually sold 13.7 million in calendar 2008. 10:02 a.m. Over 30 million devices include iPhone and iPod Touch through end of 2008, providing opportunity for App developers. Over 800,000 downloads of iPhone SDK so far. Over 50,000 people have joined paid iPhone developer program. Over 60% had never developed for any other Apple platform. 10:04 a.m. Quotes a guy from a company called Gameloft that has had over 2 million paid downloads from the App Store so far, spread over 20 games. 10:06 a.m. Showing video with Steve Demeter, iPhone app developer. He created a game called...I'mot sure what. Ah, Trism. 10:06 a.m. Over 25,000 apps in the App Store. In February, 96% of apps submitted were approved. 98% approved in 7 days or less. Customers love App Store. Over 800 million downloads from the App Store. 10:08 a.m. Scott Forstall, SVP for iPhone software, is on stage, to give the iPhone OS 3.0 preview. A major update to the iPhone operating system. 10:08 a.m. First, Forstall will talk about tools for developers. Goal with the original SDK was to make developers successful. What they did with it blew us away, he says. Been working to make SDK even better. With iPhone 3.0 is next generation of the new SDK, with 1,000 new APIs, to make apps even easier to develop. 10:10 a.m. There will be enhancements to the App Store. Developer already picks price, and keeps 70% of revenue, no credit card fees or hosting fees or other infrastructure fees. Developers are paid monthly. Some wanted other business models, for instance, subscriptions. Magazines, for instances. A magazine application. Game developers who want to be able to sell additional levels from within the game. Or, an eBook. There are eBook developers that would like to build in a book store. We support all of these purchase models in iPhone 3.0, with in-App purchase. From within magazine, can purchase renewal. 10:12 a.m. Can purchase additional levels from within a game. Automatically download levels right into a game. Another example: city guides: can sell generic application, and download "city packs." This is all tied to iTunes store. You get standard iTunes credential panel to enter password to make purchase. Business model the same as for the App store - developer sets the price, 70% of revenue to developer, no credit card fees, developers paid monthly. This is for paid apps only. 10:14 a.m. Support for peer-to-peer connectivity, especially useful for peer-to-peer games. Provides automatic discovery other applications running around you. Works wirelessly over Bluetooth, does not need to be wifi network. No pairing, completely seamless for developer and end user. Use Bonjour to discover what apps are running. But not just for games. Also for any peer-to-peer application. At sales meeting, you want to give someone a sales lead; company can build application to find colleagues phone, make the connection, share the contact, you are done. 10:17 a.m. Accessories. With iPhone 3.0 SDK, will take accessory support to next level. Can build customer applications to talk to accessories. Equalizer application to control hardware equalizer. FM transmitter, for car without built in iPod connector. With iPhone 3.0, can build custom application to automatically find optimal FM station to broadcast and tune in automatically. Another class of applications: medical devices. Take blood pressure, record over time, even have button to send history to your doctor. Enabling developers to take more advantage of accessories. Talk over dock connector or wirelessly over Bluetooth. Support all standard protocols. But also can build customer protocols. Can build accessory, custom application, talk to accessory whatever way you need to. 10:20 Next, maps. Developers want to be able embed maps in their application, and that's what they are doing. Taking heart of maps apps make it public API. Concierge application, with embedded maps API. Can pinch, zoom, satellite view, hybrid view, add location, WiFi and cell tower triangulation. Uses Google maps service. Also can use core location for turn-by-turn directions. One catch: bring your own maps. Can't pass on right to use map tiles for turn by turn. 10:23 Push notification. We're late on this one. Expected it by the end of last year. But we didn't. Had to re-architect for large number of apps. Background processes? Not good for customer. They drain battery. Doesn't allow phone to sleep. In one test, took popular IM client, on Windows, Android, Blackberry phones. Standby time dropped by 80% or more with that background process running. Much better model for battery life with push notification. Been working with third party developers already. How it works: say, an IM application. Connected to server while running. When you quit, no longer have connection open. That's where push notification service comes into play. Persistent connection open to the phone. 3 types. Badge. Audio alerts. Text Alerts. It scales to all of the third party services that want to take advantage of push notification. Preserves battery life, maintains phone performance, and optimized for mobile networks. 10:27 a.m. Few more items in SDK. In-app email. Proximity sensor. iPod library access. Can play music from library on the phone. New streaming video API. In game voice. New "shake" API. 10:29 a.m. Called developers, gave them 2 weeks to create some apps. Demos coming next. 10:29 a.m. Meebo 45 million users, 5 billion messages a month, fast growing social networking site. Seth Sternberg, CEO of Meebo is doing the demo. Goal is to communicate live on the Web regardless of which IM network they're on. AOL, MSN, Facebook, MySpace, others, including IGN and MyYearbook. This is their native iPhone app. He says they waited for push notification. 10:32 a.m. Next, Electronic Arts (ERTS). Already have 10 games on App Store. Travis Boatman is their demo guy. The demo: The Sims 3. Just showing one room. Done in 3D. Can spend "simoleans" to upgrade his house. Can add new features over the network. Ah, in app commerce. Also has media access to stereo in the character's room; so through game can play songs from iTunes. 10:36 a.m. Next, Oracle (ORCL). They have 5 apps on the App Store. Demo-er is Hody Crouch. Demo for Business Indicators. Alerts on inventory shortages; ooh, a worldwide shortage of teddy bear eyes. Can get updated info from suppliers. Get alerts on changing business conditions. Uses embedded email, push notification. 10:40 a.m. And next, ESPN (DIS). New native app on sports. Demo from Oke Okaro. They already deliver over 50 million alerts a month to sports fans. Now can get real-time alert, with ESPN chimes. And can then deliver video, without a browser. Using new media player to deliver best video experience based on connection you have. Adjusted for 3G or WiFi connections. No more need to deliver video for lowest common denominator. 10:43 a.m. And now, Lifescan, a Johnson & Johnson (JNJ) company that does glucose monitoring. Demo by Anita Mathew. Prototype for diabetes management. Diabetics doing glucose checks 6x a day. Glucose meter can transmit reading to iPhone wirelessly or via connector. Can mark as fasting, before meal, after meal. Can also add a note. Meal builder app makes it easier to estimate glucose levels. Insulin dose then automatically calculated for her. 10:50 a.m. AAPL stock update: up $2.62, or 2.8%, to $98.04. 10:51 a.m. Next ngmoco, demo by Neil Young. (No, not that Neil Young.) Potential of network connectivity excites game makers. Demos: First Touch Pets, Second, Live Fire, first person shooter. Touch Pets is virtual pet game with social networking feature. You can have play dates for your dogs with other virtual dogs. Can earn "puppy points" during the game. Can purchase item packs - in game commece API. Live Fire, first-person shooter. Can call for help, calls friends list, send push notification to friends in the game. Can also use in-app commerce, and buy, say a rocket launcher. Exclusice to app store later this year. 10:57 a.m. Next is Smule, which makes the Ocarina music application. New application. Demo from Dr. Ge Wang. Computer music researcher. Co-founded Smule in 2008. In November 2008 converted iPhone into Ocarina. More than 700,000 users. New application: Leaf Trombone World Stage. New instrument. 3 odtaves. Blow into microphone at the right time. Added new face to face feature for duet play. He and another guy are doing a demo of Phanton of the Opera on Leaf Trombone. Uh, now this is exactly why people buy iPhones. Wild applause! 11:03 a.m. Now for new customer features. Cut, copy and paste, at last. Users have been clamoring for this from the beginning, of course. Forstall is doing the demo this time. He launches mail. Double tap on the text. Cut, copy, paste bubble above selection. Drag to select larger selection. Works not just within apps, but also across apps. Can select all, copy, paste into antoher app. Can copy plain text, but all Web content. Analytics engine analyzes layout to choose right text selection. Creates "grab points" at top and bottom and side of content to set the right block of text. Can shake to undo paste. Shake again to redo. Works with Apple apps, but also third party apps. 11:09 a.m. Can also copy multiple photos, copy and paste into an email. 11:10 a.m. Next: Landscape mode. Good for reading stories on the web. Or for typing in text. New: taking it to all key applications, starting with mail. Mail auto relays out in Landscape mode. Also support for landscape keyboard to compose new messages. Same in Notes. 11:12 a.m. Messages. Enhancement for text messaging. Can now forward and delete single or multiple messages. But big news for Messages is support for MMS. Can send photos, vCard, audio files inside the application. Even locations. 11:14 a.m. New application: Voice Memos. Can use built in microphone, or external mike. Can trim it, or share it. 11:15 a.m. Calendars: Already supported personal calendars. Last year, in 2.0, added Exchange support. This year, added support for CalDAV, calendaring standard used by Google, Yahoo, Oracle, others. Useful for shared standard. Next, support for subscriptions. Team schedules, holidays. 11:16 a.m. Stocks, adding support for news, company detail. Also chart support in landscape. One figure for stock price on chart, two fingers for delta between two prices. 11:17 a.m. Search. Adding search to all key apps including mail. Can search messages from someone, to someone, messages, headers. Also can continue to search on server even if message not on your phone. Also can serach in calendar. And search in music, video, notes. Created new home screen, called Spotlight, to search across the phone. Allows you to search across multiple applications, and take you directly into the other applications. 11:21a.m. More new stuff for users. Shake to Shuffle. WiFi auto login. Stereo Bluetooth support added. Extended parental controls. Language support enhanced. Auto fill. YouTube accounts. 11:23 a.m. Forstall is wrapping up, reviewing all the stuff they discussed over the last 83 minutes or so. 11:24 a.m. Developer beta available today. Will host developers forums on the Web. Compatible will the apps on the App Store. Start testing now, they say. App Store has been in 62 countries; adding 15 more to the list. Will be in 77 countries around the world. 11:26 a.m. Will ship 3.0 this summer. Free to all iPhone 3G customers. And will even work on original iPhone. But not all features work on original iPhone. Also for $9.95 update for iPod Touch customers. 11:28 a.m. And that's it; though short Q&A with media comes next. 11:29 a.m. Stock update: Up $1.23, or 1.3%, to $96.65. 11:32 a.m. Q&A time with the Apple execs, including Phil Schiller 11:33 a.m. Someone is asking why it took so long to get cut and paste. The answer seems to be that they wanted to create the right interface. 11:34 a.m. Question on Adobe Flash; they have nothing new to announce on Flash. 11:35 a.m. Q: on peer-to-peer, will it work with non-iPhone devices? A: Really about Bluetooth and Bonjour to make IP connection. For accessory piece, third party apps can talk to accessories through Bluetooth. For peer-to-peer limited to Bonjour devices. For Bluetooth, limited to made for iPod devices. 11:37 a.m. Q: On tethering? (Which is ability to share internet connection with phone to your computer.) Two pieces needed for that. Client side piece; and second is working with carriers. We are supporting client side tethering. Nothin to announce, but building that support into iPhoen 3.0. 11:39 a.m. Hardware? Nothing to announce today. Netbooks? Nothing to announce today. 11:39 a.m. Bluetooth external keyboards? Nothing to announce. 11:40 a.m. With peer-to-peer, can you access someone else's iTunes library? A: Technically, could you serve audio files, and second, can you play them. Schiller says built in app does not do that. Schiller says "I'd have to think about that" on whether you could do that. 11:45 a.m. Question on what apps might NOT be OK in the App Store. Schiller isn't directly answering the question. They do check that applications technically work well, and don't crash. That is majority of the communication, on technical issues. We watch for profanity, porn, privacy violations. And that's in developer agreement. Some about content suitable for children; can solve that with parental controls. But end of the day, the solution is working.

11:47 And now, we're really done.