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IPhone Software Sales Take Off: Apple's Jobs - WSJ.com

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"Phone differentiation used to be about radios and antennas and things like that," Mr. Jobs said. "We think, going forward, the phone of the future will be differentiated by software."

That view is shared by rivals, including Microsoft Corp. and Google Inc., which are working to popularize their own software platforms for cellphones.

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Apple raised hackles in computer-privacy and security circles when an independent engineer discovered code inside the iPhone that suggested iPhones routinely check an Apple Web site that could, in theory trigger the removal of the undesirable software from the devices.

Mr. Jobs confirmed such a capability exists, but argued that Apple needs it in case it inadvertently allows a malicious program -- one that stole users' personal data, for example -- to be distributed to iPhones through the App Store. "Hopefully we never have to pull that lever, but we would be irresponsible not to have a lever like that to pull," he says.

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