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    Apple’s App Store: the real key to the iPhone’s success

    by  Alan Zisman (c) 2008 First published in Business in Vancouver Ju;y 22-28, 2008 issue #978

    High Tech Office column

    The July 11 release of the updated iPhone — and its official release in Canada – got news coverage for lineups, complaints about Rogers’ Canadian plans and more. But the story with the biggest long-term effect got shuffled into the background.

    Sure, the new iPhone 3G connects to higher speed mobile networks. And it’s available in more countries. And, unlike their U.S.-counterparts, Canadian customers can’t buy an unlimited data plan. But this isn’t the first technology item that’s faster than last year’s model. And it’s not news that mobile data users in Canada pay more than in other countries.

    And even Rogers’ iPhone debut didn’t mean that the phones weren’t available locally before July 11. Approximately 30% of U.S. iPhones never connected to AT&T’s mobile network; many of these “unlocked” iPhones ended up in Canada.

    Along with announcing the second generation iPhone, though, Apple also opened the platform to software developers. Previously, like most mobile devices, the iPhone came with a fixed set of applications.

    Along with the software development kit, Apple promised a centralized distribution method. Owners of iPhones (and the similar, but phone-less iPod iTouch media players) would be given access to a new App Store, using the same iTunes software and iTunes music store that they already used. Software developers could set pricing for their applications (including offering them for free), with Apple taking a relatively reasonable 30% cut for promotion and distribution.

    Along with the new generation iPhones, Apple released a firmware update letting previously sold iPhones and iPod iTouch players access the App Store. And while one million iPhone 3Gs were sold worldwide in the first weekend (it took 74 days to sell the first million iPhones), 10 million applications were downloaded from the App Store.

    Users can download applications using iTunes on their computer (later synching it to their iPhone or iTouch) or directly on their phone when it is online.

    When it opened, there were 552 applications available for downloading. That figure had risen to more than 800 by the following Monday: 22% available for free, with free applications accounting for over half of the downloads. On the first weekend, the top five applications were Apple’s Remote, enabling an iPhone or iTouch to act as a wireless remote for a computer’s music library, America Online’s AIM instant messenger client, tools to connect to the online Facebook service and the Pandora personalized online radio client (not available in Canada) and the Weatherbug utility – all free.

    Other applications bore prices from $1 to about $50; 90% were priced at $10 or less.

    According to Apple, the top five applications sold on that first weekend were games; games accounted for about a third of all available applications. There was a sprinkling of more serious applications, as well, among them:

    •free news readers from the New York Times, Mobile News Network and other services;

    •the $5 FileMagnet, for transferring and viewing files between a user’s computer (currently Mac-only) and iPhone/iTouch;

    •foreign language phrasebooks and dictionaries with prices ranging from free to $30; and

    •a free eReader utility tying users into the online bookstore, which makes the iPhone a challenge to dedicated ebook readers like Amazon’s Kindle.

    Freebies from and Oracle are the first of more business-like and even industry-specific applications to come.

    One of the reasons for Window’s personal computing dominance has been the way Microsoft encouraged software developers. At the same time, the wide-open nature of Windows has helped make it vulnerable to so-called malware.

    Many Linux distributions use “repositories”: centralized locations where users can download software guaranteed to work – and not infect their systems.

    Apple’s new App Store may offer Windows-like nurturing for developers and Linux-like security for users. It could also help ensure that the iPhone becomes the dominant mobile computing platform. •

Alan Zisman is a Vancouver educator, writer, and computer specialist. He can be reached at E-mail Alan
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