Microsoft (NSDQ: MSFT) plans to offer software for the iPhone, saying in a recent interview that developers are considering a variety of possibilities that include offering Office functionality on Apple's smart phone.

Microsoft's focus on the iPhone stems from Apple's release of a software development kit this month. The iPhone SDK, released in beta, gives developers access to the same tools Apple developers use for building applications that run on the iPhone's Max OS X-based operating system.

In an interview with Fortune magazine, published online Tuesday, Tom Gibbons, corporate VP of Microsoft's Specialized Devices and Applications Group, said the software maker was looking closely at the SDK and considering its options.

"It's really important for us to understand what we can bring to the iPhone," Gibbons told the magazine. "To the extent that Mac Office customers have functionality that they need in that environment, we're actually in the process of trying to understand that now."

With the exception of Apple, Microsoft makes more software for the Mac than any other vendor. Among its most popular offerings is its Office suite for the Mac.

"We do have experience with that environment, and that gives us confidence to be able to do something," Gibbons told Fortune. "The key question is, what is the value that we need to bring? We're still getting comfortable with the SDK, right? It's just come out. So we had a guess as to what feasibility would be like, now we'll really get our head wrapped around that,"

Apple plans to release the final version of SDK in June, along with new versions of the iPhone and iPod Touch operating systems. The latter gadget contains the same platform as the iPhone, minus the cellular component. AT&T (NYSE: T) is the exclusive cellular provider of the iPhone.

One element of the iPhone upgrade that should prove helpful to Microsoft is support for the software maker's Exchange e-mail server. Earlier this year, Apple said it licensed Microsoft's ActiveSync protocol for connecting the iPhone's e-mail client directly to an Exchange server. As a result, e-mail, calendaring and contact items can be pushed directly to the smart phone.

Apple Offering unlimited Music on Ipod

Apple is in discussions with the big music companies about a radical new business model that would give customers free access to its entire iTunes music library in exchange for paying a premium for its iPod and iPhone devices.

The “all you can eat” model, a replica of Nokia’s “comes with music” deal with Universal Music last December, could provide the struggling recorded music industry with a much-needed fillip, and drive demand for a new generation of Apple’s hardware.

Apple would not comment on the plan, but executives familiar with the negotiations said they hinged on a dispute over the price the computer maker would be willing to pay for access to the labels’ libraries.

Nokia is understood to be offering almost $80 per handset to music industry partners, to be divided according to their share of the market. However, Apple has so far offered only about $20 per device, two executives said. “It’s who blinks first, and whether or not anyone does blink,” one executive said.

Detailed market research has shown strong appetite among consumers for deals bundling music in with the cost of the device, or in exchange for a monthly subscription, executives said.

One executive said the research had shown that consumers would pay a premium of up to $100 for unlimited access to music for the lifetime of the device, or a monthly fee of $7-$8 for a subscription model.

Apple, which is thought to make relatively little money from the iTunes store compared with its hardware sales, is also understood to be examining a subscription model.

Subscriptions would work only for its iPhone devices, where it has a monthly billing relationship with customers through the mobile phone operators offering the device, while the “comes with music” model would work with iPhones and with iPods.

The subscription models under discussion in the music industry include the provision for customers to keep up to 40 or 50 tracks a year, which they would retain even if they changed their device or their subscription lapses.

Other music groups are understood to be in talks with Nokia, which is keen to sign up as many of the major labels as possible before launching its first “comes with music” devices in the second half of this year.

Source: ft.com

iPhone ll support corporate e-mails

Apple is likely to introduce better support for corporate e-mail solutions such as Lotus Notes and Exchange next week, an analyst said Thursday.

American Technology Research analyst Shaw Wu made the prediction in his latest note to clients Thursday.

“Even before the iPhone was launched, our concern was its mediocre corporate email support even though it had strong consumer email capability (Yahoo Mail, Gmail, .Mac, AOL mail). Our concern stemmed partially from Exchange’s lukewarm support of Macs (understandably so as Microsoft needs to defend its Windows franchise),” the analyst notes.

The analyst cites his own industry and developer sources, who suggest that after “months of beta testing” this weakness will be addressed with improvements in iPhone’s ability to work with Exchange server and IBM’s Lotus Notes.

“What isn’t as clear to us is how Apple will accomplish this, whether this is from internal development (most likely), third-parties including MSFT (next likely) with its ActiveSync technology, or RIM Blackberry Connect (possible but less likely), or a combination of two or more.”

The analyst also predicts Apple will also deliver improved security, better support of Virtual Private Networks, and enterprise applications such as Customer Relationship Management systems.

“We still have high conviction that Apple will ship 10 million iPhones by the end of 2008. To a degree, what gives us confidence is the large number of hacked phones signaling strong intrinsic demand,” Wu wrote.

Source: Macworld