Apple Inc. has made changes to the iPhone to make it work better with business e-mail, a move made to address what was considered a major shortcoming of the popular consumer device.

The company said Thursday the next software update would support the widely used Microsoft Exchange ActiveSync software, giving the iPhone better security and a number of features common on other smartphones and personal digital assistants such as Research in Motion's popular Blackberry handheld device.

Apple said it would be testing the new software and invited IT departments from corporations to apply to be part of the test. A public release of the software update is expected in June, the company said.

The iPhone had been criticized since its launch in the U.S. in 2007 for the lack of security and functionality of its e-mail software, particularly its lack of "push e-mail," a delivery system where e-mail is automatically forwarded to the device without prompting from the user.

The software update will give the iPhone the ability to "push" e-mail, contacts and calendar information directly to the device, Apple said. It will also allow more security features, such as more Virtual Private Network (VPN) protocols, enforced security policies and certificates and identities.

The planned changes to the software put the device more squarely in competition with business smartphones like the Blackberry or Palm Inc.'s Treo.

The iPhone currently has 28 per cent of the U.S. smartphone market, according to market analysis firm Canalys. Apple said it has sold four million iPhones since June 2007, and has set a target of selling 10 million iPhones by 2009.