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iPhone Application Store Already a Hit

Posted on: Thursday, 10 July 2008, 06:20 CDT

Apple CEO Steve Jobs expected to launch his App Store -- the online venue for third-party iPhone and iPod Touch applications -- with 200 software offerings; he ended up with more than 500.

"The reaction has been so strong," he says. "So many developers responded."

With 500 programs launching internationally tonight, "This is the biggest launch of my career," says Jobs.

The App Store is a way for owners of the iPhone and Touch (like the iPhone without the phone) to add games and other software and Web shortcuts to the devices. Heavyweight participants include Facebook, MySpace, AOL, eBay, Major League Baseball, Sega and Bank of America.

The App Store is timed to spur sales of the new iPhone, which goes on sale at 8 a.m. Friday with a lower price ($199 from $399) and faster network. The App Store is available as a free download for owners of the old iPhone and $9.99 for Touch owners.

Consumers initially will buy the new iPhone for its price and speed, but later on applications will make the sale, says Tim Bajarin, an independent analyst at Creative Strategies.

"When IBM introduced the PC, it was good, but it didn't take off until people started discovering the software," he says. The breadth of the applications "dramatically differentiates the iPhone" from competing smartphones such as the Treo and BlackBerry, he adds.

"The games are what you'd find on a computer, not on a phone," he says. "You'll end up with PC-class applications that fit in your pocket."

Having an application on the device -- instead of going to a website to use it -- makes it a quicker, more robust experience, says Chris DeWolfe, CEO of social network MySpace. His app instantly updates you on friends' activities. You can post directly to MySpace photos taken with the iPhone's camera.

"You do more of the work on the device than over the Net, so the load time should be quicker," he says.

Another new application is from Pandora, which lets you create customized Internet radio stations. Pandora is already available on other phones from AT&T and Sprint, for a monthly fee. On the iPhone, it is free. That makes it "a credible alternative to broadcast (radio)," in part because iPhones can be plugged into car stereos, founder Tim Westergren says.

The new offerings aren't only from the big guys. Xavier Carrillo Costa, CEO of Digital Legends, a Barcelona game company, had never worked with Macs before but wanted to develop games for the phone. "You forget that it's a phone," says Costa, whose action game Kroll will launch in September for $9.99. "It has all the power of a computer."

Jobs says 25% of the apps will be free, and 90% of the ones for sale will be $9.99 or less. Apple gets 30% of the revenue.

Source: USA TODAY

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