According to a report from iLounge based on several unamed sources, the upcoming iPhone Software Development Kit that is to be announced on March 6th will have limitations on application development and publishing.

As many expected, Apple plans to use the iTunes Store as "the hub" for distribution of iPhone and iPod Touch applications. This allows for added exposure for smaller developers.

The sources claim that Apple will approve or deny all SDK-based software releases. That would allow Apple to determine if an application is worthy of distribution. Only third party applications that meet their criteria will be included in the iTunes Store. In theory, this could help weed out the clutter, thus offering a solid library of useful applications. Just pure speculation on my part, but this type of control would indicate that the process could help in delivering stable applications. In a true free-market system, the success and or failure of an application would ultimately reside with the consumer. If a developer does not receive approval from Apple, it's unclear if they will be able to release their application in some form that does not require the end user to "jailbreak" their iPhone. From this report, one could surmise that either applications will be available through iTunes or require an iPhone that has been "jailbroken". Having to release an application that requires a "jailbreak" significantly reduces the market.

SDK developers will not be prevented from interfacing with the Dock Connector. This rules out software and/or drivers that would allow for adding iPhone accessories such as physical keyboard or GPS module. One of the sources described this limit as "a guarantee that SDK-developed applications would be nearly as limited as current web-based ones, while consuming more of the device