Software
An optimized version of the OS X operating system (without unnecessary components) runs on the iPhone, although differences between the operating system running on Macs and the iPhone have not been officially explained in detail. The iPhone's version of OS X includes the software component "Core Animation" from Mac OS X v10.5 which is responsible for the smooth animations used in its user interface. The operating system takes up considerably less than half a GB of the device's total 8 GB storage. It will be capable of supporting bundled and future applications from Apple.
The iPhone is managed with iTunes version 7.3 or later, which is compatible with Mac OS X version 10.4.10 or later, and 32-bit Windows XP or Vista.
The iPhone's CPU is an ARM-based processor instead of the x86 and PowerPC processors used in Apple's computers. This means applications can not simply be copied from Mac OS X and have to be written and compiled specifically for the iPhone. Additionally, the Safari web browser supports web applications written with AJAX, which, by design, are platform agnostic applications.

Applications
There are several applications located on the "Home" screen: Text (SMS messaging), Calendar, Photos, Camera, YouTube, Stocks, Maps (Google Maps), Weather, Clock, Calculator, Notes, Settings, and iTunes. Four other applications delineate the iPhone's main purposes: Phone, Mail, Safari, and iPod.
The YouTube application streams videos over Wi-Fi and/or EDGE after encoding them using QuickTime's H.264 codec, to which YouTube has converted about 10,000 videos. They are expected to convert the entire catalog by the third quarter of 2007. As a result, the YouTube application on iPhone can currently only view a certain selection of videos from the site. Also, because YouTube displays videos using Flash, the iPhone can only view videos through the YouTube application as opposed to accessing the YouTube website using Safari.
At WWDC 2007 on June 11, 2007 Apple announced that the iPhone will support third-party "applications" via the Safari web browser that share the look and feel of the iPhone interface. The applications must be created in Ajax or JavaScript to maintain device security. The iPhone cannot officially install full programs from anyone but Apple, although Steve Jobs has hinted that future third-party applications are in development. Dozens of homebrew applications are now available, although they are completely unsupported by Apple. Such applications could be broken by any software update, but Apple will not design software updates specifically to break native applications other than applications that perform SIM unlocking.
On October 17, 2007, Steve Jobs, in an open letter posted to Apple's "Hot News" weblog, announced that a software development kit (SDK) would be made available to third-party developers in February 2008. Due to security concerns and Jobs' praise of Nokia's digital signature system, it is suggested that Apple will adopt a similar method. The SDK will also allow application development for the iPod touch.