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Apple Inc. has set the stage for yet another rivalry with Microsoft Corp. by launching a Windows version of its Safari Internet browser and inviting developers to create Web-based programs for its upcoming iPhone.

Apple made the announcements at its annual Worldwide Developers Conference on Monday, where it mainly highlighted the features of its next upgrade to the Mac OS X operating system, dubbed Leopard and due to be available in October.

Some industry analysts viewed the moves as infectious ways for the Cupertino-based company to attract new converts to its products, but investors were apparently betting on more astounding news from the Wall Street darling.

Shares of Apple fell $4.30, or about 3.5 percent, to $120.19 Monday before gaining back $1.19 in after-hours trading.

Analyst Shaw Wu at American Technology Research called Apple’s news Monday ”underwhelming,” especially as Apple deflated speculation from Mac enthusiasts for the possibility of an OS X feature that would have let Mac users simultaneously run Windows and Mac programs on their machines.

Apple Chief Executive Steve Jobs also divulged little new information about the highly anticipated iPhone that will go on sale June 29.

”The announcements were more around user-interface changes (for Leopard) rather than something more radical,” Wu said. ”So I think that was disappointing and investors were hoping for more.”

Still, Apple made clear its ambitions to further encroach on Microsoft’s turf by making its Safari Web browser work on Windows-based PCs.

”Safari is another Trojan horse that introduces an innovation of Apple to the Windows community and entices them to the Mac platform,” said Tim Bajarin, an industry analyst at Creative Strategies, a technology consultancy.

The free program competes directly against Microsoft’s Internet Explorer browser and Mozilla’s Firefox.

It is the latest move by Apple to expand its reach beyond its Macintosh computers. The upcoming iPhone seeks to be another draw.

In fact, Apple said Monday it would run a full version of Safari on the iPhone, thus allowing developers to create Web-based applications for the hybrid smartphone-iPod. That new opportunity for third-party applications on the iPhone veered a bit from Apple’s earlier stance, when it said it wouldn’t support programs from outside developers due to security concerns.

Apple’s fortunes have surged in recent years as it has opened up its products to non-Mac users. Previously, Apple made its iPod media player and iTunes Store compatible with Windows, introducing Apple’s touch to millions more computer users.

The slickness of its gadget designs notwithstanding, the key to Apple’s success and reputation for ease of use is its software and how well it integrates with its hardware.

”There are a lot of connections between our products and here’s one more,” Apple senior vice president of worldwide marketing Phil Schiller said of the Windows version of Safari. ”And the more people who like our applications, the more it might mean they’ll buy other products from us.”

The strategy is apparently paying off. Mac sales have grown significantly over the past two years, pushing its slice of the PC market in the United States from 3.5 percent in 2004 to 4.9 percent in 2006, according to IDC, a market research firm.

If Safari wins over more users of Windows-based machines, the iPhone could also become more appealing.

Jobs’ announcement Monday of Safari on the iPhone essentially guarantees developers that any Web-based applications they build for Safari will also be accessible and compatible with the gadget.

”What we’ve got here is the most innovative browser in the world and the most powerful browser in the world,” Jobs said during his keynote speech at the annual conference.

Safari, which was released a few years ago for Apple’s Macintosh computers, has captured about 5 percent of the world’s market share for Internet browsers with more than 18 million users, Jobs said.

”We’d like to grow Safari’s market share,” he said.

Microsoft’s Internet Explorer is the predominant browser with a 78 percent share, while Firefox has rapidly climbed to gain about 15 percent of the market, he said.

Jobs claimed Safari performs twice as fast as its competitors.

Separately, three people familiar with negotiations between Apple and Hollywood studios told The Associated Press on Monday that Apple planned to launch an online movie rental service by the fall.

The people spoke on the condition of anonymity because the talks were ongoing.

Apple representatives declined to comment, citing the company’s policy to not discuss rumors and speculation.

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