After the iPhone announcement, reports began to surface that Apple's first foray into the smartphone market wouldn't support third-party apps. Especially after Steve Jobs said "You need it to work when you need it to work. Cingular doesn't want to see their West Coast network go down because some application messed up."

Then a few days ago, Steve Jobs suggested the possibility of letting third party applications make it on the iPhone, but only after an audience member at a recent D: All Things Digital asked him about it:

In the open Q&A portion, Jobs was "asked by an audience member about writing applications for the iPhone, Jobs said that Apple ultimately wants both the iPhone to be secure and open without compromising either attribute. The last thing Apple wants, he suggested, is an iPhone that can be easily hacked or that crashes as a result of installing third party software," Cohen and Snell report.

"'I think sometime later this year we will find a way to let third parties write apps and still preserve security. But until we can find that way, we can't compromise the security of the phone. Nobody's perfect, but we sure don't want our phone to crash. We would like to solve this problem, if you could be just a little more patient with us, I think everyone can get what they want,' he said," Cohen and Snell report."

This was probably marketing lip-service, and a management of expectations. I don't think Steve Jobs is scared about the possibility of a poorly-designed third-party application bringing down entire cellular networks. After all, these networks are designed with fail-safes. And let's not forget that Mac OS X, which the iPhone will run on, has earned a reputation as a safer computing environment.

A more likely possibility is that Cingular AT&T want to limit (or even eliminate) the number of third-party apps running on the iPhone. The reason being they get to make more money off future iPhone users. Close out the competition, and people will have to avail of your services and applications--which you can price at whim.

So why is Jobs playing along? Here's an interesting passage:

Jobs himself once referred to the Cingulars, Sprints and Verizon Wirelesses of the world as "orifices." But a couple of years ago, he realized that he would have to deal with them. "We talked to several of them and educated ourselves..."

In other words, for the iPhone to take off, it needs the support of a big service provider. To a certain degree, Apple has to play by its partner's rules.