Steve Jobs learns quickly from his mistakes.
When Apple Inc.'s chief executive officer unveiled the 3G iPhone at its Worldwide Developer Conference in June, he cited a lack of third-party applications as one of the weaknesses hampering the original version of the device.
The App Store is designed to change all that. It's an online marketplace for games and other software specifically designed to run on the iPhone. It's also a business strategy – and with it, Apple has fired the loudest shot in the rapidly expanding arms race to dominate smart phones, the next platform of computing.
“The applications that come out for the iPhone will do as much for Apple's success as Apple has done,” said Josh Martin, a technology analyst with Yankee Group in Boston.
The App Store allows developers to set the price of their applications – or give them away – and lets them keep 70 per cent of the sales revenue.
Apple has already rewritten the rulebook for the music industry with its iTunes music store and is well on its way to redrawing the map of movie and television programming distribution. But it could be the App Store, which went online Friday to coincide with the launch of the next-generation iPhone, that could have the most profound impact on the future of computing.
Thanks to meteoric leaps in power and processing speeds, the new generation of smart phones function more like mini-computers, with large hard drives, lightning-fast Internet connections and new features such as GPS.
The App Store launched with about 500 applications, including offerings from MySpace, Facebook, Major League Baseball and The Associated Press. About 25 per cent of the first batch of applications are free, and more than 90 per cent cost less than $9.99 (U.S.). One third of the new applications are expected to be games, including Sega Corp.'s Super Monkey Ball.
For the manufacturers, more applications mean consumers can do more with their devices, a strategy they believe will lead to an increase in sales. There are more than 850 independent software companies now designing applications for the BlackBerry while the iPhone software development kit has been downloaded by more than 250,000 potential developers.
Microsoft Corp. executives say there are more than 18,000 developers working on Windows Mobile applications while even Palm Inc.'s Treo device has a developer network that the company says exceeds 30,000.
Apple is not expecting to generate gobs of money from the sale of applications, Mr. Jobs said, but instead will use the App Store as a means of driving iPhone sales, the way the company uses its iTunes music store to help sell iPods.
But unlike the PC industry where there exists one omnipresent platform for which developers create applications – Microsoft's Windows – a dominant player has yet to emerge in the smart phone world.
That lack of a leader makes it all the more important for Apple, Research In Motion Ltd.and their competitors to create networks of software developersto help enhance the experience on their devices in an effort to outflank their competitors.
