Jobs changes course on iPhone

SAN FRANCISCO — Chief Executive Steve Jobs said Wednesday that Apple would let outside developers create software for its iPhone and iPod Touch gadgets, showing the company's increasing willingness to change course in response to customer demands and changing market conditions.

In a letter posted on Apple's Web site, Jobs said the company was trying to find a way to open up the iPhone to useful programs, but not to viruses and other malicious software. He said the company needed until February, when it plans to give developers tools to develop for the iPhone.

"We think a few months of patience now will be rewarded by many years of great third-party applications running on safe and reliable iPhones," he wrote.

Apple touts the iPhone as a minicomputer combined with a cellphone, but since its June release users have complained that they aren't allowed to install software like they can on a computer. Until Wednesday, Jobs had dodged questions about whether he planned to change that policy.

"Let me just say it: We want native third-party applications on the iPhone," he wrote. "We are excited about creating a vibrant third-party developer community around the iPhone and enabling hundreds of new applications for our users."

Some software developers didn't wait for Jobs, starting almost immediately to make programs such as Sudoku games and voice-mail management tools that users found online and added to their iPhones.

Others created programs to unhook the iPhone from its wireless carrier, AT&T.

But Apple fought back. Last month the Cupertino, Calif., company issued a software update for the iPhone that knocked out many programs, antagonizing developers and iPhone users. It also damaged some phones that had been unhooked from AT&T.

Wall Street has paid close attention to the power struggle among Apple, its users and software developers, said Pacific Crest Securities analyst Andy Hargreaves.

"If the device is locked down, there is only so much Apple can do with it," Hargreaves said. "You could look out in two years and say this is going to stagnate. Now you can look out and say, yes, this device will achieve more than it already has."

Apple's shares closed up $3.17 Wednesday, or nearly 2 percent to $172.75, a record high.