An industry executive said to be familiar with the company’s plans tells Multichannel News that Netflix plans to extend its Watch Instantly video-streaming service to the Nintendo Wii and to the iPhone and iPod touch as well.

It’s not entirely clear how the company plans to bring Watch Instantly to the iPhone. Presumably, it will use a native iPhone app, since the device doesn’t support Silverlight, Microsoft’s (MSFT) Flash-esque also-ran.

That said, there are some hurdles to negotiate there since native video streaming on iPhone 3.0 doesn’t yet support digital rights management.

Another issue likely to prove problematic: Bandwidth. Watch Instantly streaming typically requires a fair bit of bandwidth and might prove problematic over 3G connections. AT&T (T), which hobbled SlingPlayer Mobile for iPhone over bandwidth concerns, will probably see things that way. Which means Netflix’s app, if it is indeed in development, will be limited to Wi-Fi like the SlingPlayer.

Beyond that and the DRM issue, there’s not much more I can think of to prevent such an app from being brought to the iPhone. There’s not much overlapping content between Watch Instantly and Apple’s iTunes service. And even if there was, there’s no real rivalry here that might inspire Apple to block Netflix’s (NFLX) service. iTunes is run pretty much at break-even to support sales of Apple (AAPL) devices. And a Netflix app for iPhone would arguably help Apple do that as well.

An industry executive said to be familiar with the company’s plans tells Multichannel News that Netflix plans to extend its Watch Instantly video-streaming service to the Nintendo Wii and to the iPhone and iPod touch as well.

It’s not entirely clear how the company plans to bring Watch Instantly to the iPhone. Presumably, it will use a native iPhone app, since the device doesn’t support Silverlight, Microsoft’s (MSFT) Flash-esque also-ran.

That said, there are some hurdles to negotiate there since native video streaming on iPhone 3.0 doesn’t yet support digital rights management.

Another issue likely to prove problematic: Bandwidth. Watch Instantly streaming typically requires a fair bit of bandwidth and might prove problematic over 3G connections. AT&T (T), which hobbled SlingPlayer Mobile for iPhone over bandwidth concerns, will probably see things that way. Which means Netflix’s app, if it is indeed in development, will be limited to Wi-Fi like the SlingPlayer.

Beyond that and the DRM issue, there’s not much more I can think of to prevent such an app from being brought to the iPhone. There’s not much overlapping content between Watch Instantly and Apple’s iTunes service. And even if there was, there’s no real rivalry here that might inspire Apple to block Netflix’s (NFLX) service. iTunes is run pretty much at break-even to support sales of Apple (AAPL) devices. And a Netflix app for iPhone would arguably help Apple do that as well.

“Customers are voting and the iPhone is winning,” Apple CEO Steve Jobs said a press release today. “With over 50,000 applications available from Apple’s revolutionary App Store, iPhone momentum is stronger than ever.”

An impressive showing. Particularly considering all the factors that could slow sales: The souring economy, competition from the Palm (PALM) Pre, the BlackBerry Storm, the T-Mobile G1 and, of course, the iPhone itself. After all, there is now a $99 iPhone on the market. Beyond this, there’s the fact that the 3GS was launched in eight countries. The 3G debuted in 21.

Interestingly, this is the first time we’ve seen Jobs quoted in an Apple release in some time now. As best I can tell, the last quote attributed to him was in a Jan. 21, 2009, earnings release. Since then, Apple (AAPL) has issued 22 more press releases. This is the first in which it is Jobs, and not COO Tim Cook or Phil Schiller, Apple’s senior vice president of Worldwide Product Marketing, who is quoted. Does this mean he’s officially back at work following his medical leave? I’ve put that question to Apple and will update if I hear back.

[Image credit: Gizmodo]

“Customers are voting and the iPhone is winning,” Apple CEO Steve Jobs said a press release today. “With over 50,000 applications available from Apple’s revolutionary App Store, iPhone momentum is stronger than ever.”

An impressive showing. Particularly considering all the factors that could slow sales: The souring economy, competition from the Palm (PALM) Pre, the BlackBerry Storm, the T-Mobile G1 and, of course, the iPhone itself. After all, there is now a $99 iPhone on the market. Beyond this, there’s the fact that the 3GS was launched in eight countries. The 3G debuted in 21.

Interestingly, this is the first time we’ve seen Jobs quoted in an Apple release in some time now. As best I can tell, the last quote attributed to him was in a Jan. 21, 2009, earnings release. Since then, Apple (AAPL) has issued 22 more press releases. This is the first in which it is Jobs, and not COO Tim Cook or Phil Schiller, Apple’s senior vice president of Worldwide Product Marketing, who is quoted. Does this mean he’s officially back at work following his medical leave? I’ve put that question to Apple and will update if I hear back.

[Image credit: Gizmodo]

That’s when Apple (AAPL) is expected to roll out iPhone 3.0, an update that will bring a number of long-anticipated features to the iconic device. Among them: voice memos; a landscape keyboard for Mail, Messages, Notes and Safari; a phone-wide Spotlight Search; push notifications; the long-overdue cut, copy and paste; and MMS and Internet tethering–neither of which is currently supported by AT&T (T).

Let’s hear it for carrier exclusivity!

That’s when Apple (AAPL) is expected to roll out iPhone 3.0, an update that will bring a number of long-anticipated features to the iconic device. Among them: voice memos; a landscape keyboard for Mail, Messages, Notes and Safari; a phone-wide Spotlight Search; push notifications; the long-overdue cut, copy and paste; and MMS and Internet tethering–neither of which is currently supported by AT&T (T).

Let’s hear it for carrier exclusivity!

Forstall invites Gameloft to the stage to demo its new app for iPhone 3.0. Asphalt 5, a 3-D racing game. With media player access, users can access their iPod music via a “car stereo.” Developer describes Asphalt 5 as a console gaming experience. Doesn’t seem to quite live up to that description, but it’s still impressive.

Onstage now, Airstrip Technologies, a medical app developer. Airstrip Critical Care. Wow. Realtime medical data delivered remotely to iPhone. Measurable, viewable with zoom, searchable.

Next up: TomTom for iPhone. Looks great, but likely difficult to drive and use at the same time. Enter: TomTom Car Kit. Uses iPhone 3.0’s accessory framework to offer a hands-free experience. Also keeps your phone charged.

Check out our WWDC 2009 Full-Coverage special feature for more WWDC news.

Moving on now to Spotlight search and iTunes. Spotlight search across the entire device and all apps. Apple (AAPL) iTunes store on iPhone will soon offer videos for purchase. Audiobooks, too. Support for iTunes U has also been added.

Tethering: Works on Mac or PC, Over USB or Bluetooth. Seamless. No need for additional software. This is also carrier-dependent and…well, look at that. I don’t see an AT&T logo on the list of carriers supporting iPhone tethering. More groans from the audience as Forstall glosses right over this.

Safari for iPhone now boasts improved performance, HTTP audio and video streaming, Auto-fill and HTML 5 support. Also support for 30+ languages.

Check out our WWDC 2009 Full-Coverage special feature for more WWDC news.

Welcome back to Weekend Update, where we showcase some of the highlights from this site over the past week.

In the umpteenth round of the old media versus new media match, the Associated Press in its annual meeting this week played into the stereotype of the grizzled no-nonsense editor who shakes his fist at the new interweb thing (or was it intertube?) and its feisty friend Google News, who are running amok on his lawn. In addition to trying to “protect news content from misappropriation,” AP board chairman and MediaNews group CEO Dean Singleton emphasized that print was the “meat,” while online was merely the “salt and pepper.” Unimpressed, BoomTown thought Singleton was singling out the steak while missing the sizzle.

In response, Google (GOOG), or He Who Was Not Named, posted a polite, if rather ambiguous, statement on its public policy blog, which was just begging for translation. Also doing some interpreting of his own, AP executive Jim Kennedy spoke with MediaMemo on just what all the fire and brimstone was about. In quieter newspaper-related news, The Wall Street Journal continues on its quest to spread pay content online, possibly through niche content, according to WSJ.com Executive Editor Alan Murray. Also experimenting online is the recently opened news Web site, True/Slant, a heady combination of journalism, social networking and advertising.

Another news item that’s gotten people talking is the fallout from the collapsed IBM-Sun merger, aka Sun pulls a Jerry Yang. (Oh Jerry, the Internet kids because it loves… loves to kid! Pwn-age.) Following the news of the collapse, Sun (JAVA) shares dropped more than 27 percent, leading analysts and Digital Daily to predict difficult times ahead for the company, here and later here as the stock continued its fall over the week. Besides quashing its own stock price, Sun also quashed rumors that chairman and co-founder Scott McNealy would replace CEO Jonathan Schwartz.

Other nonthematic highlights this week:

BoomTown got the exclusive on the anticipated talks between Yahoo’s (YHOO) Carol Bartz and Microsoft’s (MSFT) Steve Ballmer in which the two CEOs discussed the possibility of a search and advertising partnership. Speaking of exclusivity, Google and Microsoft like totally want to be Twitter’s new bff, or maybe go steady if Twitter’s interested.

Digital Daily ruminated on speculations of Time Warner (TWX) doing an AOL spinoff, especially after its hire of former Google exec Tim Armstrong and its attempts to amend debt agreements as per an SEC filing. Also in the rumor mill: The iPhone 3.0 may support onboard video editing. Less of a rumor and more of a slap in the face, to Apple (AAPL) at least: Elan Microelectronics has taken off the gloves (and taken up the lawsuit) because it believes that Apple’s products infringe on its touchscreen patents.

MediaMemo goes over the facts about Vevo, the new online music video hub that’s a partnership between Google’s YouTube and Vivendi’s Universal Music Group, with interesting ramifications for both. Meanwhile, iTunes has put in place its new tiered-pricing system, in which songs will now cost 69 cents, 99 cents, or $1.29. But in a question that shocked no one: Where are the all the lowest-tier songs? Don’t worry your pretty little heads, said Big Music, they’re on their way.

In a new Mossblog, Walt Mossberg reports from the battlefield of the growing Smartphone Wars, in which iPhones, BlackBerries and others are engaged in mortal combat. In the Mossberg Solution, Katherine Boehret reviews BumpTop, an application that takes your flat, plain old X-Y plane of a desktop to the next dimension, that is, the third dimension.

More next week!

Also making the rounds today are reports claiming iPhone 3.0 will support on-board video editing. Seems there are some resources in the latest beta of the OS suggesting that video capture and manipulation will figure large in the next device–things like “UIMovie Scrubber Editing Right,” “UIMovieScrubberMaskLeft” and whatnot. Now, while these resources could be pointing to something else entirely, it seems plausible that they are referencing some sort of video tool (iMovie Mobile? iMovie Light? iMoviePhone?)–particularly when considered with the MobileMe “Publish Video” feature also found concealed in the 3.0 beta. That said, no mention of video editing was made during Apple’s recent iPhone 3.0 event. Perhaps Apple (AAPL) hopes to keep it under wraps until the device’s official debut. Or perhaps there’s nothing to keep under wraps in the first place.

The suspense is building. In a few moments Apple will preview its iPhone 3.0 operating system and a new software development kit at an invitation-only event at its headquarters in Cupertino, Calif. Soon we’ll find out what to expect in the next iteration of the iPhone’s OS and, more importantly, whether the reality distortion field created by Apple execs Greg Joswiak and Scott Forstall can match the one often conjured up by their boss Steve Jobs.

At 10 AM sharp Greg Joswiak takes the stage to kick things off. First a brief overview of the iPhone/iPod Touch ecosystem. Over 30 million iPhone and iPod Touch devices have been sold to date. Clearly, the platform is much larger than anyone had thought. The iPhone is now in 80 countries, says Joswiak, who also notes that the iPhone developer program now has some 50,000 members. Many of those members are entirely new to app development, attracted by the SDK’s ease of use and the simplicity of the App Store. The App store appeals to big developers and small. Currently there are 25,000 apps in the store.

Exclusive photos from the event by AllThingsD’s Adam Tow can be found at the end of this post, and in their own post as well.

96 percent of all apps submitted are approved and 98 percent of those are approved within a week of submission. That seems to run a bit contrary to the stories often told about Apple’s byzantine approval process. To date, there have been 800 million downloads from the App Store. Impressive, given the store’s just 8 months old.

iPhone 3.0 SDK

Joswiak invites Scott Forstall to the stage for a look at OS 3.0. Forestall says Apple (AAPL) has been ‘blown away” by the breadth and quality of app development its seen. So it’s making the SDK even better. It’s adding more than 1000 new APIs and more flexible developer business models to the App Store, which right now relies on one-off transactions.

iPhone 3.0 will support “in-app purchases” and subscriptions. Magazine renewals or additional game levels, for example, can be purchased via a simple transaction performed within the game or app itself. Developers still set their own prices. They still collect 70 percent of revenues and there are no credit card fees. Free apps, of course, remain free.

Another new addition to the platform: support for peer-to-peer connectivity. This will really extend the iPhone as a gaming platform. Automatic discovery through Bluetooth. No need to join a WiFi network. Nor is there any need for pairing. An excellent feature–and not just for games, says Forstall. He offers up an example of contact sharing among business colleagues.

Also include in iPhone 3.0, a new accessory API that will allow vendors to build applications that will talk directly to their accessories. An FM transmitter, for example, could be designed to find and tap into the best FM frequency in a particular area. Accessories can talk to apps via dock connector, BlueTooth, standard protocols and custom protocols as well.

Moving on to maps now. Developers have been asking for the ability to add the iPhone’s Maps application into their own apps. Apple has created an API that will allow them to do just that. The API supports pan and zoom. It also supports core location and cell tower triangulation so that developers can build their own turn-by-turn apps, something many have been calling for. There is one catch, however. Because of licensing issues, developers who hope to do this must provide their own maps. The API is BYOM (bring your own maps), says Forstall.

Onward. Also coming in iPhone 3.0, push notifications. We’re late to this, Forstall admits. Late, indeed. Forstall notes that developers and users have been calling for background processing, but says it demands far too much battery life and slows performance. Apple apparently tested background apps on rival mobile operating systems from RIM and Microsoft and found standby time fell by 80 percent when background listening was active. In contrast, Apple’s push solution reduces standby time by only 23 percent. So how does it work? Apple’s Push Notification Service will maintain a persistent connection to iPhones over which badges, audio and text alerts can be sent. It’s optimized for all mobile networks and more importantly, it’s scalable.

Forstall rattles off a few more APIs that can be 3.0: in-app e-mail, iPod library access, streaming audio and video, proximity sensor, in-game voice chat. This is indeed a big update.

Demos

Apple’s given early SDK access to a few developers who will now show off their new apps. First up: meebo and its multi-protocol chat client. Why did meebo wait so long to build an iPhone app? The developers say they needed push notifications to make the app experience and the Web experience seamless.

Next up: EA, the gaming outfit that’s had quite a few successes on the iPhone already, Spore, for example. EA’s Travis Boatman takes the stage to talk about Sims for iPhone. Impressive, particularly its use 3D. Game supports in-app commerce and media access. Boatman uses a Sim to puchase a stereo and then play a song on it demonstrating a new API that allows in-game access to the iPhone’s local iPod library for music playback.

Now comes Oracle. Hody Crouch takes the stage, noting that the company has already launched 5 very successful iPhone apps. Crouch demonstrates the lauch of Oracle Business Indicators directly from a push notification message. Yawn. Interesting. Forstall says iPhone ranks number 1 among business users according to a JD Powers Associates survey.

Next up: ESPN. Quick demonstration of push alerts. The company also intends to scale video quality according to connection type automatically using the new iPhone APIs.

Following ESPN, LifeScan with a new diabetes management app. Using the new accessory API, Lifescan’s glucose meter can transmit readings to the iPhone over Bluetooth. It also tracks historical glucose and insulin readings and graphs them as well.

ngmoco:)’s Neil Young takes the stage and takes the demo back to gaming. He’ll be introducing two games today: Touch Pets and LiveFire. First up: Touch Pets Dogs. A social network in which players adopt, nurture and play with their virtual puppies and those of others around the world.

Ridiculous.

Touch Pet demo is followed by LiveFire, a first person shooter. Game is multiplayer via global gaming server. Demoer pulls up first screen. Ha. Immediately shot dead. Game supports shake-to-jump and push notifications to friends. Seems destined for top app status.

Next up: Smule, the outfit responsible for the iPhone’s Ocarina app. Did I hear that correctly? Developer says Ocarina has more than 700,000 users. Smule’s used the new iPhone SDK to create what it says is “the first massively online social music gaming experience.” It’s called Leaf Trombone World Stage. Two demoers using the app play a pretty sweet version of Phantom of the Opera. Big applause for that.

More iPhone 3.0 Features

Forstall returns to the stage. “How can I possible follow that,” he says in a nod to the Smule guys who are so far the highlight of the event. Apparently by rattling off a list of new features in iPhone 3.0. The OS has more than 100 of them. Top among them Cut, Copy and Paste. Well, it’s about damn time, isn’t it?. Text is selected with a simple double tap. Beginning and end grab points are placed around the selected text and a little “cut, copy, paste” bubble appears. Cut, Copy, Paste works across all applications. It can copy plain text and Web content and multiple photos as well. Simple. And with a “shake to undo” feature, very slick.

And the features keep coming …

Landscape. iPhone 3.0 brings landscape and the big landscape keyboard that accompanies it to all apps — Mail, Notes, Messages, etc.

Also updated in 3.0, Messages, Apple’s text messaging app. As expected, it will soon support MMS, forwarding and deletion. Also some enhancements to Calendar: support for CalDev and subscriptions. Search has been added to all key apps — Mail, Calendar, iPod, Notes. And now an entirely new app: Voice Memos.

And another: Spotlight, a brand new home screen which allows a search across the entire device. Very nice.

And still more new features follow: Shake to Shuffle, WiFi auto login, stereo BlueTooth, Notes sync, and in Safari parental controls, auto-fill, and an anti-phishing feature. A veritable cornucopia of iPhone goodness.

The list clearly goes on, but Forstall cuts it short to talk about release dates.

Uh-oh. Bad news for Palm. The 3.0 SDK developer beta is available starting today. And iPhone 3.0 will ship this summer. It will work on all iPhones and the iPod Touch. It will be free for iPhone users and $9.95 for iPod Touch owners.

And now on to the Q&A

Q&A with Forstall, Joswiak and Phil Schiller, Apple’s senior vice president of Worldwide Product Marketing.

First question: Why did cut and paste take so long? Forstall says its far more complex than it would appear. Apple wanted to get it right the first time.

A question about video and Flash support. Schiller jumps in quickly and says the company has nothing to say about Flash today. Forstall talks up other video platforms, features.

Question about streaming music: Joswiak sacks it saying it would be confusing with iTunes.

Can you say anything about hardware? Netbooks?
Schiller: Nothing to announce today. Nothing to announce today.

Will 3.0 address performance issues iPhone users sometimes encounter? Lags, etc. Forstall says Apple’s very concerned about this and is working to address it. BS answer. Presumably the next generation iPhone will take care of such things.

Tethering? “We’re absolutely supporting tethering in the client side in iPhone 3.0,” says Forstall, “but we’re working with carriers around the world to see when they can add tethering support on their networks. But we are building that support into iPhone 3.0.”

Another question about peer-to-peer. Can it be used to access another user’s iTunes library? Not right now. Is there a way to use the SDK to do that? Forstall says probably not right now.

And that’s it …

John and Adam are on their way to the iPhone 3.0 event at Apple’s Town Hall Auditorium in Cupertino this morning. John will be liveblogging throughout the event on Digital Daily while Adam will be providing photos in real-time. Click any photo to launch a slideshow.

Apple’s (AAPL) plan to preview iPhone OS 3.0 tomorrow is a sure sign that the company is on track to debut the next iteration of the phone on which it will run this summer. That’s the word from Piper Jaffray analyst Gene Munster, who has high expectations for the OS and device both. “In the past two weeks Apple has introduced new Mac hardware and a new iPod shuffle, for which the company simply issued a press release,” Munster wrote in a research note. “The fact that Apple is hosting an event for the iPhone OS 3.0 shows that it will likely involve meaningful changes to the iPhone feature set. Apple may be settling into an annual summer hardware refresh cycle with the iPhone, similar to the iPod’s fall refresh cycle.”

Just what does Munster mean by “meaningful changes”? Like others, he anticipates the addition of universal search, background processing/multitasking and the long pined-for cut and paste.

Incidentally, Munster says he doesn’t expect Apple CEO Steve Jobs, who is on medical leave from the company until June, to attend tomorrow’s event. Tim Cook will be filling the Jobs role for the time being, he says–as much as possible, anyway. Said Munster, “During Jobs’ absence, the pace of innovation at Apple has continued, which we believe will reassure investors. Increasingly, we believe investors are considering the future of Apple under Cook’s leadership as a positive.”