By Jorey Ramer

Twenty months after the iPhone was first released, and with more than 30 million iPhones and iPod touches sold through the end of 2008, Apple earlier this month previewed its iPhone 3.0 operating system at its headquarters in Cupertino, CA.

While there are many new features that consumers will find compelling -- cut and paste, for example " what effect will this development have on mobile advertising, both for the iPhone and the broader industry?

Apple has unlocked more than 1,000 APIs for developers with the new software development kit, enabling new features, functionality and business models.

For example, application developers will be able to offer subscriptions to content -- for example, newspapers, magazines, books and game levels -- termed "In-App Purchase" allowing for, as the name would imply, purchasing within an application.

Publishers with subscription business models on other media will surely appreciate this, rather than shoehorning into a fixed price model as they did before.

Application developers currently calculating the ROI of their performance-based mobile advertising campaigns will need to take into consideration not only the cost of customer acquisition and fixed application price, but now the average lifetime value of the customer. Unfortunately, Apple is not yet offering In-App Purchase for free applications yet, preventing "try before you buy" models, but I would anticipate that to come sooner rather than later.

Game-changers
Next, Apple will now enable peer-to-peer networking, allowing two iPhones or iPod touches to connect, supporting multiplayer games and other applications such as sending contacts.

The more Apple can do to support more advanced gaming on its platform, the more game developers will be able to charge.

Average games on the iPhone still range 99 cents to $9.99, compared to $10 to $40 on the Sony PSP or Nintendo DS.

New feature support for developers means more advanced games for consumers and more spending for mobile advertising. If developers can charge more for their applications, they can spend more to acquire their customers.

Application developers will also now be able to embed maps in their applications. This is beneficial to both publishers and advertisers.

Publishers want to allow advertisers to have a positive brand experience while still keeping users within their application. Previously, allowing developers to embed the browser within their application allowed publishers to achieve this objective.

But advertisers wishing to link to maps -- for example, dealer locator for automotive advertisers -- would remove users from the application. No more.

Notifications, overdue from last September, will now be supported, allowing developers to push content -- text, audio -- to the application, such as instant messages, news updates or sports scores.
Mobile messaging traffic is prolific, but can be difficult for advertisers to deliver a positive brand experience in, for example, 160 characters of an SMS.

This new messaging may represent a significant new traffic stream that advertisers can leverage independently or in conjunction with their existing in-application campaigns.

With 800 million downloaded applications to date, anticipate a surprising volume of application-related messages to emerge.

In addition to the APIs, there are 100 new features. Apple did not have time to present them all.

BuyPhone
But let me give you my wish for iPhone's future, one not requiring a new operating system but highlighted by the new functionality.

The iPhone will now be able to communicate more seamlessly with application-related accessories, such as blood-pressure cuffs, blood- sugar readers, speakers or stereo Bluetooth headsets.

Why not allow users to purchase physical goods approved by Apple, either related to applications or simply available in Apple retail locations, to be purchased from the iTunes store? This could allow physical goods to be ordered from the mobile device.

Including this widely expanded class of goods using an existing billing relationship would encourage participation from an entirely new class of advertisers, those who can spend much more in mobile advertising given the price of their product "$100 versus 99 cents.

Apple has already accelerated the mobile advertising industry development with a handset, operating system, ecosystem development and consumer awareness unlike anything previously seen.
While APIs, features and functionality may seem small when taken individually, keep an eye out for significant effects all together.

Apple's work has already been shown to be a catalyst for wireless carriers and handset manufacturers to accelerate comparable services on other platforms and should continue to feed into mobile advertising.

Jorey Ramer is founder and vice president of corporate development at JumpTap, Cambridge, MA. Reach him at .