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Reports show that Apple plans on a restrictive policy for application development. According to iLounge, the iPhone SDK will limit what kinds of iPhone and iPod Touch applications can be developed, where they can be sold, and what types of peripheral devices they can access.

Since iTunes is the primary means for getting software updates onto or off of the iPhone, Apple would most likely, require all iPhone or iPod Touch applications to be sold through the iTunes store. Smaller developers would have an advantage of getting noticed as a result of the visibility of the iTunes store.

Apple will also prevent developers from accessing the iPhone or iPode Touch dock. In other words, the developers’ software would be unable to talk to third-party peripherals such as keyboards or audio equipment. Developers would essentially have access to only the basic iPhone functions meaning the phone, Wi-Fi, and camera.

And the issue that will probably receive the loudest feedback would be Apple’s plan to serve as the clearinghouse for all proposed applications. The company would have complete authorization power over the number and types of applications that could be installed on an iPhone.

Developers could be faced with some challenges if this plan is implemented. Apple plans to release the actual details next week.

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