Will the iPhone Remain The Fairest of Them All?

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Palm’s Pre is still months away from launch, but already it’s making the world a better place. Proof? Apple today announced that a raft of improvements is coming to the iPhone–including, at long last cut and paste.

That critical feature, along with a bunch of others, will help the world’s hottest smartphone (17 million sold to date) stay competitive with the Pre, which threatens to usurp the iPhone and become Silicon Valley’s newest Snow White. The 3.0 operating system will be available to iPhone users free this summer.

No date was given but you can be sure it’ll be around the time that Palm plans to release its highly anticipated Pre.

At a developers’ conference at 1 Infinite Loop today, Apple showed off all the new things its iPhone will be able to do with the upcoming operating system upgrade, and gave a sense of the direction the company is taking. For instance, Apple is obviously taking on Amazon by offering developers the ability to charge for subscriptions. Currently, bookseller apps can’t charge for new books within the app, and must point customers to the web. This is good news for the whole print business, as well: It means that if our beloved Time Magazine actually had an application, we could charge by the week, month, year or whatever. (Do I sound bitter? Don’t get me started.)

Clearly, the rumors that Apple is working on a reading-scaled iPod Touch or netbook are true. 

“In-app subscription” functionality will also be an even bigger revenue stream for games makers. Say you’re playing my fav game, Fieldrunners, and you’ve conquered the first 100 levels. Now the developer can charge you whatever he wants for the next 100 levels–all within the game. EA showed how they’ll be even charging Sims3 players for cool, virtual-world stuff, like stereo systems that will play your iTunes music within your room.

This will thrill the 50,000 developers whose apps have been downloaded more than 800 million times. So will the fact that Apple has opened up over 1,000 new APIs. Among other things, with the advent of the 3.0 OS, developers can build any kind of hardware accessory—a heart cuff was demo’d—and link it by wire to the iPhone. Even Bluetooth will soon be unlocked to tether all kinds of things, from wireless headphones to glucose detectors for diabetics.

Other new APIs announced: Turn-by-turn directions for maps; push notifications, which was delayed due to infrastructure scaling problems–and which will make social apps like Loopt useable at last); in-app email and streaming audio and video.

As for cut and paste, double tapping and dragging text will select and move it. You’ll also be able to select entire files and paste them into other docs. Finally!  Apple uses little drop pins to help you frame your selection; shake the iPhone to undo it, kind of like a virtual eraser.

Other cool stuff: MMS, so you can send photos, audio and contacts; forwardable MMS; voice memos; news feeds within stocks; and search across all apps–especially mail. You’ll even be able to find messages that are on your Exchange server but not on your phone.

In fact, Apple added a separate app, Spotlight, as an in-phone search page, which will look for key words across all apps, from email to iTunes.

All of this stuff goes a long way toward solidifying Apple’s lead in the smartphone market.

Executing it, of course, is much harder to pull of than talking about it, which, so far, has been Palm’s tactic. We’ll know by summer whether it can do all these things, too—and more, which they’ve promised. But for now, Apple’s princess looks like it’s still the fairest phone in the Valley.

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