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July 10, 2008, 8:34 am

Apple’s App Store opens for business

Four months after Steve Jobs first announced it, Apple’s App Store — the showcase for third-party developers writing new software for the iPhone and iPod touch — has opened its doors, at least for some users. (More on that below.)

The timing of the launch was apparently driven by New Zealand, where the iPhone 3G was set to go on sale at 12:01 a.m., Friday July 11. Given the time difference, that dictated an opening in the United States no later than 8:01 a.m. EDT on Thursday.

What will you find in the App Store? There are already 26 full pages of programs, with 21 applications on each, and according to Apple (AAPL) there’s a lot more to come.

In interviews with the New York Times and USA Today, Steve Jobs offered a few statistics:

  • More than 500 programs
  • 90% of them $9.99 or less
  • 25% of them free
  • One third of them games

In addition to games, the store is expected to offer lots of educational programs, mobile commerce and business productivity tools.

Matt Murphy, a partner in the fund set up by Kleiner Perkins Caufield & Byers to invest $100 million in iPhone apps, told the Times that he expects games, health care, social networking, mobile commerce and location-based services to be the most popular types of software.

“An application that would allow Bay Area surfers to check tides and network with other surfers failed to past muster” with the fund, according to the Times. (link; log-in required)

Most applications written for the iPhone 3G are expected to run on the original iPhone and the iPod touch. The App Store is available as a free download for owners of the old iPhone and will cost $9.99 for iPod touch owners.

The store requires that users first download iTunes 7.7, which Apple’s Software Update describes as follows:

Use iTunes 7.7 to sync music, video, and more with iPhone 3G, and download applications from the iTunes Store exclusively designed for iPhone and iPod touch with software version 2.0 or later. Also use the new Remote application for iPhone or iPod touch to control iTunes playback from anywhere in your home — a free download from the App Store.

The iPhone 2.0 software update is required to actually run programs for sale on the store, so it’s only fully functional for owners of first-generation iPhones and iPod touches who have updated their devices or, presumably, New Zealanders who bought the first iPhone 3Gs.

But once your iTunes is up-to-date, you can browse the full array of 551 programs immediately available, arranged alphabetically from “A Christmas Carol” and “A Discourse on Reason” (there are a surprising number of books) to zintin and Zipcodes. Plus a handful of programs whose names start with numbers or are written in Chinese characters.

It kinda sucks that it’s easier to get apps for an iPhone, which I don’t own, than for a Mac, which I do own. I really don’t like where this is going. Are they going to call it iPhone OSX in 3 years?

Posted By Tony, Boston, MA : July 11, 2008 9:52 am

Well, the App store is definitely free for everyone in the UK. I have an iPod Touch (no iPhone yet) and was able to go into the App store and download some of the free apps without being charged a penny!

It’s a shame I can’t get the 2.0 firmware update though… and that MobileMe is still down… just hope the store hasn’t run out of iPohne 3Gs by the time I get there!

Posted By The Happy Space Invader, United Kingdom : July 11, 2008 1:34 am

25% of the apps are free; of the remaining 75%, 90% of those are less than $10, got it?

I’ve downloaded iPhone ver2, and iTunes 7.7 and about 20 free iApps. They’re great! You can get a direct link to the OS upgrade, right here:

http://appldnld.apple.com.edgesuite.net/content.info.apple.com/iPhone/061-4955.20080710.bgt53/iPhone1,2_2.0_5A347_Restore.ipsw

Posted By Ken C, Gardiner, Maine : July 10, 2008 8:44 pm

Technically, I didn’t buy my iTouch. I got it for free because of the back to school incentive. (I knew waiting to buy my MacBook would pay off one day…)

I’ll probably end up paying the $10. I looked around and there’s a lot of cool stuff on there (a lot of it is free, too!)

Posted By Steve, Omaha, NE : July 10, 2008 2:54 pm

Actually you can have the two statements that:

+ 90% of them $9.99 or less
+ 25% of them free

And still be logically true. How? Because $9.99 or less includes the price tag of $0.00 (the or less bit). So the 25% of them free is completely included under the 90% of $9.99 or less.

From this we can infer:

+ 65% are between $0.01 and $9.99
+ 25% are $0.00
+ 10% are $10.00 or more

If that’s true, Phil’s article is logically consistent and not incorrect.

Posted By John Doe, Cambridge, MA : July 10, 2008 1:51 pm

Posted By Elliot, NY,NY : July 10, 2008 10:18 am

I just got a touch and there is no way im paying 10 bucks just to get in the store. Ill stick to music and videos, thank you.

A one time $9.99 is too much for someone who lives in NY, NY? How much is a subway token and a newspaper or Starbucks coffee? Some people are just set to this “free” mindset that just boggles me… well, he could also be one of the RIMM trolls :/

Posted By Bobab, LV, NV : July 10, 2008 1:24 pm

I just got a touch and there is no way im paying 10 bucks just to get in the store. Ill stick to music and videos, thank you.

This is just sad. So you’ll deny yourself access to a veritable cornucopia of functionality, because it’s going to cost you another $10? If the Touch had cost an aditional $9.99 at the register, you would have paid it without a second thought.

Anyone who would bother to protest such a nominal fee hasn’t any business even BUYING an iPhone or iTouch. Clearly, you have financial concerns!

Oh, lordy.

Posted By Jeff - Yonkers, NY : July 10, 2008 1:15 pm

99% of the apps are $9.99 or less and 25% of the apps are free.

Doesn’t that equal 124%?

Just busting your chops Phil. :)

ex ped: That was 90% for $9.99 or less, not 99%. In any event, you can’t just add 90 to 25, because the two categories overlap. You remember Venn diagrams, don’t you Nodack?

Posted By Nodack Phoenix AZ : July 10, 2008 12:50 pm

Unfortunately they haven’t loaded all of the games yet. I personally have two that are listed in their connection system as ready for sale, but they haven’t been posted to the category - they are only available via search. It’s kinda depressing ’cause I worked for about two months non-stop on them.

Posted By JT, SF, CA : July 10, 2008 12:40 pm

Whether you have an iPhone, iPod touch, or not, you can browse the App Store via iTunes 7.7 and buy apps. (Altho I can’t see it iTunes US, I can see it just about in any other country’s iTunes store.)

You can only run the apps if you have the iPhone v2.0 software on your iPhone or iPod touch. For iPhone, it is a free upgrade, and it officially comes tomorrow, though there is a hidden link whereby you can download it and load it today (see AppleInsider if you really want to do it today). For iPod touch, the software upgrade is $9.95 (and it includes more than just access to the App Store) and it will probably be available on Apple.com or iTunes tomorrow.

And as ped said, it’s 9.95 due to accounting rules that prevent companies from recording revenue for a product sale if the product is “incomplete”, in other words, additional functionality for that product is to be delivered later (which v2.0 would be if it was free). But if Apple charges for the upgrade, then they can record the full revenue from the iPod touch sale at the time of purchase. For iPhone and AppleTV, Apple does not record the full revenue at time of purchase, but spreads it over the next 8 quarters, thus, the upgrade can be free. That’s what a conservative reading of the Sarbanes-Oxley act requires.

Posted By mark, boston, MA : July 10, 2008 12:14 pm

awesome! itarot, iscopes, photobucket, myspace, yellowpages, pangea vr, coolgorlla phrasebooks, jirbo arcade, a lot of nice free stuff but what about iGo and iPhysics? they have this crazy game on the unlocked phone where you draw sticks to make a ball roll towards another object.

I can’t believe quicklight is not free and meal splitter is 7.99, something a free calculator can do.

though it’s nice apple have texas hold’em for 4.99, I already have for the iPod.

Posted By Bobab, LV, NV : July 10, 2008 11:00 am

So AAPL comes out with a product last year that BLOWS away any competition from cell phone manufacturers, NOT because its a better phone, but because its a better integrated platform. Its basically a computer that can make phone calls.

Millions were sold, but untold millions were put off by the high price tag. “boy, if this comes down to oh say $200 a pop, Im in” they were saying….gotcha.

Once again AAPL marketing at its finest. Throw in the fact this will be peoples first foray into the OSX arena, and its a great trojan horse to get even more Mac sales. Long live the Halo effect.

Posted By John, Parma, Oh : July 10, 2008 10:54 am

“not free for iTouch” still does not make sense. I have a V2 iTouch. what else do I need to get for 9.99? and where is this. It would have been better to be able to browse the App Store through the iTunes store like everything else.

Posted By Colin, Halifax, Nova Scotia Canda : July 10, 2008 10:49 am

I just got a touch and there is no way im paying 10 bucks just to get in the store. Ill stick to music and videos, thank you.

Posted By Elliot, NY,NY : July 10, 2008 10:18 am

The Applications is why consumers will buy the iPhone. Reviewers should have waited until after the App Store launch. The iPhone was built to surf full internet not Mobile Web like other smartphones. iPhone is meant to be a portable internet device above the cellphone or iTune or camera usage.

Posted By d_st, ny, ny : July 10, 2008 9:52 am

Wait… the app store isn’t free for iPod Touch users? Whose crazy idea was this?! Hopefully I’ll at least be able to browse the apps to see if it’s worth paying for…

ex ped: The upgrade cost $9.99 for iPod touch owners for complicated accounting reasons that flow from the Sarbanes-Oxley Act. But access to the store is free once your software is up to date.

Posted By Steve, Omaha, NE : July 10, 2008 9:29 am

With a worldwide launch, the iPhone should sell more than 10 million units this year. More carriers will be added. China will be the most important because Chinese tend to buy the newest and best cellphones and China has the most cellphone users in the world. Russia and possibly India will be major carriers to add.

No analyst has projected the revenue from the App store. The App store and iPhone Applications have not been allowed to be marketed by Apple, because Apple wants it to be a surprise. The App store and iPhone applications will start to be marketed aggressively a few weeks after the 3G iPhone launch. You’ll see iPhone games on TV and in magazines. Also iPhone business and other applications on TV and periodicals.

3G isn’t wide spread in the USA and some countries with old cellular networks. But 3G is wide spread in Japan, and some Asian and European countries, that was why other countries wanted 3G. 3G is still new in the USA.

The App store and Full Internet will be the reason why the iPhone will be better than other smartphones. There are 4,000 approved developers so there should be 4,000 new applications. Thousands of other developers have not been approved but might be approved later. The iPhone will have applications from 3rd party developers that will make it better than the Blackberry. The Blackberry costs more to use and operate than the iPhone, so reviewers who say the iPhone is expensive don’t know what they are talking about. TomTom is rumored to have a navigational software for turn-by-turn with the iPhone GPS. iPhone owners will have to pay about $10 for the TomTom software. The iPhone GPS is the same with all other smartphones with GPS but the iPhone offers a cheaper price.

Posted By d_st, ny, ny : July 10, 2008 8:52 am
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Philip Elmer-DeWittSilicon Valley veterans like to joke that Steve Jobs must be surrounded by a reality distortion field; if you get too close to him, you start to believe what he's saying. Thanks to the success of the iPod, the launch of the iPhone and the renewed interest in the Mac, Apple has made believers out of millions of customers - and made a lot of investors rich. But Philip Elmer-DeWitt believes that an ounce of skepticism never hurts when writing about the company. He should know. He's been covering Apple - and watching Steve Jobs operate - since 1982, first for Time Magazine, then for Business 2.0, and now for Fortune.
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