As expected, Apple Thursday unveiled a software development kit for its iPhone. The SDK dramatically expands what business users and consumers can do with their phones and iPod Touches.

What is the iPhone SDK?
The iPhone SDK is a software development kit that will allow third parties to create applications that can run directly on the iPhone and the iPod Touch. The kit is significant because Apple can't possibly anticipate, nor produce, all the applications that people might want to use on an iPhone. And some of those applications will convince people who weren't sure about the iPhone to buy it -- in countries where it's sold, anyway.

When will it be available?
A beta version is scheduled to be released Thursday. The official iPhone SDK and the update for the iPod Touch will ship in June 2008. Certain types of enterprise developers will apparently have access to the official SDK prior to its formal release, although details are sketchy on exactly how that will work.

How much does it cost?
The iPhone SDK beta can be downloaded for free today. Developers will be required to join the iPhone developer program, which allows developers to test their code, get tech support, and distribute their applications. This will be initially available in the US, with other countries to follow in the next few months. It costs US$99 a year. A separate developer's program for developers that want to build in-house corporate applications will cost US$299 a year. Apple will charge for the update to the iPod Touch as a result of the accouting treatment used for that product but hasn't said yet how much that will cost.

Have any applications already been developed for the iPhone?
Over a thousand Web applications are listed on Apple's Web site. And perhaps hundreds of unofficial applications have been created using so-called "jailbreaking" software. But the applications demonstrated today are the first official third-party applications shown by Apple.

Apple gave an advanced copy of the software development kit to developers from various companies to see what they could build in a few weeks. Apple showed off several of the resulting applications during Steve Jobs' speech on Thursday. Those applications appear to be conceptual models for now, as the companies will probably go back and take more time before releasing final versions.

They include Touch FX, which adds Photo Booth-style effects to a photo using your finger on the iPhone touch screen; Touch Fighter, the first official game for the iPhone; a mobile version of Electronic Arts' video game Spore; a Salesforce.com management application; an iPhone version of AOL instant messenger; a medical records app from Epocrates; and an iPhone version of Sega's video game Super Monkey Ball.

How will development for the iPhone work?
Anyone can download the SDK and develop an application, but you have to join Apple's iPhone Developer Program, and Apple is only accepting a "limited" number of applications at the moment. The application development process will be very similar to how applications are developed for Mac OS X.

Applications will be distributed through Apple's newly announced App Store, which will be built in to the iPhone but is also accessible through iTunes. Apple plans on personally approving every application destined for the iPhone.

The applications are wirelessly downloaded to the iPhone over either EDGE or Wi-Fi. Developers name the price of their applications themselves and get 70 percent of the revenue from sales of their apps; Apple gets 30 percent. Free applications will be listed for free on the App Store and iTunes.

Can developers work on a PC?
No, the SDK will only work on Macs.

Can developers distribute their own iPhone apps?
No, the only way to develop official applications for the iPhone and iPod Touch is to go through Apple's process.

When will the iPhone be available in Australia, and will it be 3G?
Apple said it wasn't addressing any hardware questions during today's event. Analysts expect a 3G iPhone to appear by midyear.

Will jailbreak still work?
The jailbreaking community will probably have to examine the new software update and revise their methods, but they will probably put in the effort to do so, because Apple does not plan to allow an official software application that would unlock the iPhone from its designated networks.

How will Apple address security?
Developers will have to electronically sign their applications to participate in the program, allowing Apple to track them down if a malicious application makes it through the gauntlet of Apple's approval process. Since the App Store is the only place where applications can be obtained, Apple can shut off the App Store if a malicious application is in the wild.

What new business features were introduced?
Apple has licensed Microsoft's ActiveSync protocol, which will allow the iPhone to wirelessly sync corporate e-mails, contacts, and calendar information quickly and safely with their corporate servers. The upcoming software release will also introduce Cisco's IPSec VPN for secure connections and the 802.1x security standard for improved Wi-Fi security.

What will this mean for Apple and the iPhone?
In foreign markets like the US, Apple will now be able to pitch the iPhone against the BlackBerry by emphasising the new business features. And the new applications could provide potential customers with all sorts of new reasons to buy an iPhone.