In an interview Steven Levy reported in Newsweek, Steve Jobs said:
You don’t want your phone to be an open platform,” meaning that anyone can write applications for it and potentially gum up the provider's network. You need it to work when you need it to work. Cingular doesn’t want to see their West Coast network go down because some application messed up.
Either he's never heard of the Palm Treo which has supported independently-developed software applications for years without gumming up anyone's network, or the iPhone is peculiarly vulnerable to malware.
John Markoff in the New York Times observed that Jobs may have forgotten that a similar attitude about keeping the Macintosh closed led to his ouster from Apple in 1985:
Indeed, when the Macintosh Computer — which, like the iPhone, was designed by a small group shrouded in secrecy — was introduced in January 1984, it was received with the same kind of wild hyperbole that greeted the iPhone this week. But a year later, the shortcomings of the first-generation Macintosh cost Mr. Jobs his job at the company he had founded with his high school friend Stephen Wozniak nine years earlier.
In light of the iPhone’s closed, appliance-style design, it is worth recounting the Mac’s early history because of the potential parallel pitfalls that Mr. Jobs and his company may face.
Despite its high price of $2,495, the Macintosh initially sold briskly. But Mr. Jobs’s early predictions of huge sales (on Tuesday, in a similar fashion, he set a goal for the iPhone 1 percent of the world’s cellular phone market, or 10 million phones a year, by the end of 2008) failed to materialize.
The Mac’s stumble was in part because of pricing and in part because Mr. Jobs had intentionally restricted its expandability. Despite his assertion that a slow data connection would be sufficient, the gamble failed when Apple’s business stalled and Mr. Jobs was forced out of the company by the chief executive he had brought in, John Sculley.
Of course, Apple did open up the Mac. With the addition of a hard-drive (something Jobs had fought against) and software from Microsoft (notably Excel) the Mac became a huge success.
One can hope that a similarly enlightened approach will obtain with the iPhone.