Soon, we'll know whether Apple (NASDAQ:AAPL) CEO Steve Jobs is a genius or a moron when it comes to smartphones.

During yesterday's keynote address at the Mac maker's Worldwide Developer Conference, Jobs told developers hoping for direct access to the iPhone to instead build software for the Web. (Sorry, Skype.) He also said that Safari, Apple's signature browser for Mac users, which claims just 5% of Web surfers, would be made to run on Windows.

Translation: The iPhone will only run the software that Apple ships with it.

Looking for a few friendly neighborhood webslingers
That's not necessarily a problem, but it sure is a disappointment for developers. Press reports say that coders had hoped to be able to write custom-tailored iPhone software -- something you'd actually download and install.

Jobs has a different idea. He wants developers to be like Google (NASDAQ:GOOG) and create software that actually runs inside the browser, as Google Maps does. Not that any browser will do, mind you. Jobs wants coders writing for Safari.

How it could be magic
For some, especially those on our Apple discussion board, the move comes across as brilliant. For example, since Safari will run natively on Windows, Web developers will be able to test applications for the iPhone on their PCs, the thinking goes.

They have a point. If the iPhone is to be the universal device that Jobs wants it to be, it's probably best to turn to the Web, rather than the Mac OS, as the development platform. A Web browser, after all, doesn't care which operating system you use. All it cares about is the HTML code on the webpage that it's reading.

Also, by turning to the Web, Apple may be creating an unexpected technical advantage for the iPhone. Web apps need little or no disk space. Therefore, the iPhone won't encroach on the gigabytes reserved for your music and video files. It'll be as fully functional as any other iPod. Except, of course, that it will ring when someone calls you.

How it could be tragic
Sounds great, doesn't it? Conceptually, yes. It's an elegant, practical, and inventive design. Pure Apple, you might say.

Trouble is, everything hinges on Safari, which isn't even the best browser for the Mac. According to VersionTracker, a site that keeps tabs on how users rate Mac software, open-source Camino is the highest-rated Mac browser, earning 4.4 of five stars. (Safari gets 3.9, and Firefox gets 3.6.)

Then there's Microsoft's (NASDAQ:MSFT) Internet Explorer. IE may not be the best browser on the planet; it may not even be as good as Firefox. But unless Apple gives users a reason to switch from IE 7, they won't.

Don't say security, either. Reports are already surfacing of bugs that allow for remote execution of code and memory corruption. There's also a problem with Safari handling proxy servers, which are common in corporate settings.

Finally, Web applications, while cool, are notoriously lightweight and in their infancy as usable platforms for work and play. They're also entirely dependent on Internet connectivity. No signal, no software.

Should you bet on the black turtleneck?
My fear is that Apple is betting the iPhone on a browser that, in its current form, is underpowered and overappreciated. That's a dangerous combination that needs fixing.

My guess is it that it will be fixed. Legions of newly committed Windows developers will help. So will partners like Google, whose maps caused a stir among Mac addicts last week.

Nevertheless, the point remains: What we'll see on June 29 isn't really iPhone 1.0. It's more like iPhone 0.9. Let's hope that's worth at least $500.

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Fool contributor Tim Beyers, who is ranked 7,262 out of more than 30,000 rated investors in CAPS, didn't own shares in any of the companies mentioned in this article at the time of publication. Tim's portfolio holdings can be found at his Fool profile. His thoughts on Foolishness and investing may be found in his blog. The Motley Fool's disclosure policy just noticed that David Gardner shorted Apple in CAPS. What's your take?