High Bar Knocks Down Apple Shares

A keynote speech by CEO Steve Jobs fails to inspire investors.
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CEO Steve Jobs bowed to the company's growing base of independent developers by announcing Monday that Apple would allow them to develop applications for its forthcoming iPhone.

That news, however, wasn't enough for investors, who pushed the stock lower on the lack of a "wow" announcement.

Shares of Apple closed Monday at $120.19, off $4.30, or 3.5%.

Opening up iPhone application development marked the finale of Jobs' keynote speech, which kicked off Apple's weeklong annual Worldwide Developers Conference. Prior to now, Jobs had given developers little hope that they would have access to the iPhone.

His announcement reflects the growing influence of developers whose applications are seen as an important way to attract new Mac users -- and iPhone users -- and continue expanding Apple's share of the market for personal computers and mobile devices.

As expected, Jobs devoted most of his speech to new features available with Apple's latest Mac operating system, Leopard. Among Leopard's 300 new features, Jobs demonstrated a new desktop search tool, automatic data backup and recovery features and the new iChat video conferencing application.

Once Jobs concluded his review of 10 new features, he stopped and said, as he regularly does ahead of new product announcements: "One more thing." At that point, he announced that Apple's Safari Web browser would be available for PC running

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Windows. Safari holds roughly 5% share of the Internet searches, next to Firefox and Internet Explorer. It is available now for Microsoft's Vista operating system and XP as well.

"This is odd," said Jobs as he sat down at a Windows-based PC to demonstrate the new Safari application.

Afterwards, Jobs once again said, "There's one last thing," at which point a picture of the iPhone came up on the stage screen.

"We've been trying to come up with a solution to let developers in

to the iPhone platform, but keep it reliable and secure," said Jobs. "We think we have a solution."

Jobs said that Apple engineers have developed a way to integrate the iPhone's features with applications from the developer community. He then yielded the stage to Scott Forstall, vice president of iPhone software, who demonstrated an application developed internally at Apple.

The application displays the contact information of Apple employees, including their work email and desk phone numbers. Forstall selected a colleague by tapping on the iPhone screen. This called up the person's contact information and a photo. Forstall showed how the iPhone can use the contact information to send email, initiate a phone call or even call up

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mapping application to display a satellite image of the building where the person's office is located.

It was just a hint of what's available with the iPhone. Amine Khechfe of Endicia, which makes shipping software, said he emailed his colleague during the demonstration with an idea for a mobile application.

"We could write an application that lets shippers and senders track packages

in transit from their iPhone," he said.

Overall, Khechfe said he was happy with Jobs' presentation, though he said none of the announcements were "earth-shattering."

As it often does, Apple's stock has been moving higher into the Jobs speech, which has historically marked new products or alliances. On Monday, no significant product refreshes were announced, and speculation about a new partnership with Google -- that company's CEO, Eric Schmidt, is an Apple director -- didn't materialize.

"Jobs really showed us where he's taking Leopard," said Khechfe. "The presentation was all about business, which is what it should be."