Software developer Dylan Schiemann used Apple CEO Steve Jobs' own words against him in a presentation on developing third-party software applications for Apple's iPhone.

"You can write amazing Web 2.0 and Ajax apps that look and behave exactly like apps on the iPhone," Jobs said at an Apple Worldwide Developers Conference in June in San Francisco.

"It depends on your meaning of the word 'exactly,'" Schiemann said on Monday at the AjaxWorld 2007 Conference and Expo in nearby Santa Clara.

Jobs says Apple will allow third-party software developers to write applications to run on an iPhone, but not be installed on it. Instead, the apps can only be delivered through the device's Safari web browser. While an endorsement of Ajax from Jobs is welcome, Schiemann and others at the Ajax conference say there are limitations on how their apps can run on Safari, and there is a vibrant community of developers writing apps to install directly on iPhone, contrary to Apple's wishes.

Schiemann's iPhone has 40 applications running on it, including those Apple ships, but also some unauthorized apps installed directly on the device. Christopher Allen, another AjaxWorld presenter who runs iPhoneWebDev.com, has 50 apps on his iPhone, including several unauthorized ones.

The Ajax conference devoted five breakout sessions to developing iPhone apps using Ajax, a development tool for writing web-based applications.

Schiemann, CEO of web-based applications developer SitePen, promoted the Dojo Foundation's open source Dojo Toolkit for writing iPhone applications but says even it can't overcome all the limitations in trying to work with the current iPhone version of mobile Safari. Notably, he said, web-based apps can't react to the iPhone's signature feature, which is the ability of a person to use finger-touch commands, such as the "pinch" to zoom in on a web page.

Allen adds: "When the user pinches, the web-based application is not notified that the end user is doing that, because the browser does not tell them."

Allen makes a distinction between hackers who add software apps and those who break into the iPhone to avoid using AT&T's wireless service. Jobs says Apple will take action to prevent unlocking.

Asked to comment on this story, an Apple spokeswoman emailed a company statement that makes no such distinction: "Apple strongly discourages users from installing unauthorized unlocking programs on their iPhones. Users who make unauthorized modifications to the software violate their iPhone software license agreement and void their warranty."

Apple did not reply to attempts to clarify the statement.

Schiemann argues that adding apps to the iPhone does not constitute "unlocking" it, and doesn't consider this a violation of the terms of service. "It is, after all, still my iPhone."

The developers hope Apple improves support for developers and fixes other glitches when it introduces an updated version of Safari, expected in October, and when its long-delayed Leopard operating system is released.

Still, Schiemann and Allen understand why Apple is being protective of its platform, agreeing that if someone installs an unauthorized application and it breaks some other part of the iPhone, the customer will blame Apple, not the developer. They recognise that if an iPhone software upgrade somehow disables an unauthorized app, Apple can't worry about apps it doesn't support in the first place.

Despite the frustrations, the iPhone app market is worth pursuing, the pair say. Given the robustness of the iPhone experience, its expansion into markets abroad and Apple's sales forecast of 10 million units, it is a significant opportunity.

"This is a gold rush, but we're basically in the alchemy stage where we're trying to turn lead into gold," Schiemann says. "We're trying to do all these things with the device because it's so freaking fun to use."