Piper Jaffray analyst Gene Munster has upped his estimate of the number of iPhones he expects Apple to sell in its 4th quarter, from 4.1 million to 4.47 million, according to a report to clients issued early Wednesday.

In the same period last year, Apple (AAPL) sold 1.12 million first-generation iPhones.

Munster’s new estimate is based 1) on Apple’s report that it sold 1 million iPhone 3Gs in the three days following the device’s July 11 launch and 2) on 25 hours of in-store checks across the United States conducted over the past two weeks.

His team counted sales in both flagship and “regular” Apple stores and concluded that Apple sold an average of 95 units a day in each of its 188 U.S. stores over the next 27 days. He combined these results with estimates of the number of iPhones sold at AT&T’s 2,200 outlets and the number sold by overseas carriers to get a grand total of 4.47 million.

On Tuesday, Fortune.com reported on the findings of an independent analyst, Michael Cote of the Cote Collaborative, who estimates that 3 million units were purchased worldwide during the iPhone 3G’s first 30 days on the market. (link)

Piper Jaffray’s estimate is probably conservative, says Munster, because it doesn’t take into account iPhone sales in the 22 additional countries scheduled to start carrying the iPhone on Aug. 22. Moreover, he reduced to 31 his estimate of the number of iPhones sold per day for the remaining 51 days in the quarter, which ends on Sept. 30, based on a 10% falloff in sales his team observed between the first week of observation and the second.

The charts below summarize his findings:

In a move that will significantly expand its retail presence in time for the holiday season, Apple has agreed to let retailing giant Best Buy sell the new iPhone 3G through its nationwide chain of Best Buy Mobile outlets starting early next month.

Best Buy markets cell phones in the United States through 970 full-size stores and 16 stand-alone Best Buy Mobile shops. All U.S. Best Buy stores will carry the iPhone except for a handful of outlets located in areas where AT&T does not provide cell phone coverage.

The deal, first reported on Tuesday by Apple Insider and confirmed by Best Buy Mobile president Shawn Score (see here), could serve both companies well.

For Apple (AAPL), which has been struggling to meet the extraordinary demand for its second-generation iPhone through its smaller network of Apple and AT&T retail stores, the deal puts its hottest-selling product in the hands of one of world’s savviest retailers. Best Buy, a Fortune 100 company, is the world’s largest consumer electronics retailer, with a 21% share of the U.S. electronics market and a 3.6% share of the cell phone market, up from 2% last year.

For Best Buy (BBY), which has been angling for the iPhone business for more than a year, the deal will add Apple’s cachet to its expanding smartphone offerings and help drive traffic to new Best Buy Mobile departments within its stores. Best Buy is aggressively marketing a variety of smartphones, from RIM (RIMM) BlackBerry Curves to Palm (PALM) Treos, and is the exclusive reseller, with Sprint (S), of the Samsung Instinct, one of the iPhone’s nearest competitors.

Apple and Best Buy have been slowly expanding their relationship since the retailer began carrying iPods in 2002. Best Buy started selling Macs in selected stores in 2006, and recently expanded the program to more than 600 outlets.

The deal can be seen as a victory for Best Buy’s “consumer centricity” marketing strategy, by which it caters to the needs of specific types of customers in specialty boutiques within its full-size stores. Last week Best Buy announced that it had completed a nationwide roll out of its Best Buy Mobile store-within-stores, a joint venture with Britain’s CarPhone Warehouse that began in 2006 and has led, according to Best Buy, to a 10-fold increase, year-over-year, in high-end multimedia phone purchases (link).

Best Buy, based in Richfield, Minnesota, operates more than 1,150 stores in the United States, Puerto Rico, Canada, China, Mexico and Turkey. Earlier this year it purchased a half-share of CarPhone Warehouse, which has 2,400 outlets in nine European countries.

Apple operates 219 stores, 187 of them in the United States, where customers have been queuing up for the iPhone 3G since early July. AT&T (T) sells iPhones in some 2,000 stores, but the current waiting period for customers who want to buy one from AT&T is 7 to 10 days.

It’s been a month since the iPhone 3G and the App Store made their debut, and Steve Jobs used the occasion to offer up some selected facts and figures:

• Users have now downloaded more than 60 million programs for the iPhone and iPod touch, or roughly 2 million per day.
• Revenue from those applications came to about $30 million. 70% went to the developers; Apple kept 30%. (Free apps apparently accounted for the vast majority of the downloads, since average revenue per download is 50 cents.)
• If sales continue at the current pace, Apple stands to clear at least $360 million a year. “This thing’s going to crest a half a billion, soon,” Jobs told the Wall Street Journal. “Who knows, maybe it will be a $1 billion marketplace at some point in time…. I’ve never seen anything like this in my career for software.”
• Of the $21 million that developers cleared in the first month, roughly $9 million went to the creators of the top 10 best sellers. Sega Corp., for example, says it sold more than 300,000 copies of its $9.99 Super Monkeyball game in 20 days.
• Jobs believes a rich array of applications is what will distinguish the iPhone from competing cell phones. “Phone differentiation used to be about radios and antennas and things like that,” he told the Journal. “We think, going forward, the phone of the future will be differentiated by software.”

Apple had earlier reported that 10 million apps were downloaded in the first three days after launch. By July 21, that number had reached 25 million (see here). The latest number suggests that downloads have accelerated in the last 10 days, from July 21st’s 1.25 apps per day to the current 2 apps per day.

Relations between Apple (AAPL) and its developers have not been smooth, however (see Trouble in the App Store). Jobs commented on one of the hot-button issues: He confirmed that the iPhone operating system contains a kill switch that gives Apple the capability to reach into an iPhone (presumably during a sync operation) and remove a malicious application.

“Hopefully we never have to pull that lever, but we would be irresponsible not to have a lever like that to pull,” he said.

Separately, an Apple spokeswoman defended the decision to pull a program called I Am Rich, which cost $999.99 and did nothing but display the image of a ruby on the iPhone’s screen, off the App Store shelves. She characterized it as a “judgment call.”

Jobs did not use the occasion of the iPhone 3G’s one-month anniversary to report how many of the devices Apple has sold. He may be saving that number for another day — and another round of headlines.

[Fortune's Scott Moritz reported Monday that at least one analyst puts iPhone sales for the first month at 3 million units. See here.]

UPDATE: Gigaom’s Om Malik, who says he has downloaded three dozen apps but only likes four of them, adds some interesting data about how many of those 60 million apps are in active use. He cites research by New York-based Pinch Media, which reports that free downloads to paid downloads is about 10 to 1. Moreover:

“According to data collected by Pinch Media, on average, less than 20% of an application’s overall unique users return to an application each day. [CEO Greg] Yardley also pointed out that people are using the apps for just under five minutes at a time, on average. The majority only use the applications once per day - average number of uses per day is around 1.2.” (link)

It’s been a confusing week for both sellers and buyers at the App Store — the venue for third party software that is the best thing to happen to the iPhone (except maybe the price cuts) since it arrived more than a year ago.

The iPhone 3G is OK, if you manage battery consumption very carefully. And Mobile Me is slowly getting up to speed (see here). But the App Store — with 1,574 programs as of Saturday morning, from Abacus to Zxilophone — is a runaway hit, a software candy store that offers iPhone and iPod touch owners a fresh tray of tasty treats nearly every day.

So what are we to make of the fact that Apple (AAPL), without explanation, has started pulling programs from the store, leaving both the people who wrote them and the customers who bought them scratching their heads and wondering who’s in charge? At least five apps have disappeared so far, but three dominated the tech news this week:

• BoxOffice: This free application, which listed movie times, locations and links to reviews, was one of the first programs available when the App Store opened on July 11 and offered worthy competition to Movies.app, a must-have program from the early days of the original iPhone. BoxOffice disappeared from the App Store on July 31. “Apple pulled the app yesterday without giving my (sic) any notification that they were doing it, or what their justification was for removing it,” its developer, Metasyntactic, wrote the next day on a MacRumor forum. “I’ve tried to contact them about the issue, but it’s been a complete dead end. If anyone has a useful contact number for apple, please let me know.”
• I Am Rich: This one is a little easier to understand. The priciest app in the store — it sold for $999.99 — was also the most useless: it did nothing but take your money and display a red gem on your screen. “The red icon on your iPhone or iPod touch always reminds you (and others when you show it to them) that you were rich enough to afford this,” the information page on iTunes warned. “It’s a work of art with no hidden function at all.” Apple, which was collecting $300 for every copy that sold (and at least eight did, developer Armin Heinrich told Silicon Alley News), may well have received complaints and felt obliged to protect unwitting customers. But what kind of screening process approved I Am Rich in the first place?
• Nullriver: This may be the most bewildering case of all. The application allowed Mac owners to use their iPhone as a wireless modem to reach the Internet over AT&T’s (T) cellular networks — either 3G or EDGE, whichever was available. It was removed from the store on August 1, briefly reinstated, and then pulled for good. According to Nullriver CEO Adam Dan, technicians at Apple told him it was pulled the first time by mistake. “They want to get NetShare back up, but they want to do some technical analysis that they couldn’t explain to us,” Dan told Wired.com. As iPhone Savior pointed out at the time, AT&T’s user agreement clearly forbids unauthorized tethering (see here), but it’s not clear why AT&T would object to the extra revenue stream. “Apple runs the app store, so you’ll have to ask them about the availability of this and other apps,” an AT&T spokesperson pointedly told Gizmodo. “For customers looking for a smartphone with tethering capabilities, AT&T has a number of other options to choose from.” Perhaps it was Apple that had a problem with Nullriver. They may have their own tethering plan in the works, and Nullriver might well have offended someone in Cupertino’s sense of how easy-to-use an iPhone app ought to be (tethering is never easy, and the instructions included in Nullriver were hopelessly inadequate.)

Apple has not responded to requests for comment, so nobody really knows for sure what’s going on. But it sounds like they were overwhelmed by the initial flood of applications and may be trying, by fits and starts, to develop a rational policy.

“From what I can tell their approval process is not very strict at all,” Nullriver’s Dan told Wired.com. “I think they run it, start it up and if it doesn’t crash they approve it. They brainlessly click through, and if there’s problems they remove it.” (link)

Even more troubling, for some observers, is the discovery of what seemed to be a blacklist mechanism buried in iPhone OS 2.0 and unearthed last week by Jonathan Zdziarski, author of iPhone Forensics. It consists of an URL that points to a page of unauthorized programs.

“This suggests that the iPhone calls home once in a while to find out what applications it should turn off,” writes Zdziarski. “At the moment, no apps have been blacklisted, but by all appearances, this has been added to disable applications that the user has already downloaded and paid for, if Apple so chooses to shut them down.”

For an extensive discussion of the significance of this list, see Techmeme here.

The number of offerings on the App Store — the venue for independently produced programs that helps distinguish Apple’s smartphone from all others — hit 1,001 on Monday night.

That’s roughly double the number that were available when the store opened just over two weeks ago (on July 11, the same day the iPhone 3G went on sale), and includes popular games like Texas Hold’em and Crash Bandicoot, business tools like Bloomberg News and Salesforce Mobile, and social networking programs like Facebook, MySpace and AIM. Roughly 20% of the apps are free; 90% cost $10 or less. Most also work on the iPod touch.

Many consider this flood of software to be a bigger deal than the phone itself. Among smartphones, only the RIM (RIMM) Blackberry has created a comparable platform for so-called third-party programs (see its application store here), but because the Blackberry lacks a touch screen and accelerometer, its apps don’t compare with the iPhone’s in terms of features and ease of use. [Several readers note that Microsoft's (MSFT) Windows Mobile and the Palm (PALM) OS also provide rich software platforms. You can view their offerings here and here, respectively.]

How you feel about Apple’s App Store seems to depend on what side of the virtual counter you stand.

MG Siegler, speaking for many App Store customers, declared it “simply sublime” in his Venture Beat column and described it as a new paradigm that would transform Apple as a company. “With each passing day I’m finding myself becoming addicted to it in the same way I was once addicted to the iTunes music store.” (link)

On the developer side, however, tempers are becoming increasingly frayed. The programmers who raced to create applications — hoping to be the first in their particular category — complain that Apple isn’t approving their submissions fast enough and that when their apps do get OK’d, they’re not getting promoted on the store’s New, What’s Hot or Staff Favorites sections or updated quickly enough. New versions sit in the queue at Apple for up to a week, leaving users to wrestle with bugs that have already been fixed. “If an update does make it into the store,” writes David Chartier in an Ars Technica article that summarizes the litany of developer complaints, “iTunes isn’t always listing the correct version. NetNewsWire, for example, is actually at version 1.0.7, but the App Store says only 1.0.1.”

But the programmers’ biggest gripe is the gag order imposed by Apple’s so-called NDA (nondisclosure agreement), which prevents developers from talking to the press, to the public and even among themselves about their programs and the SDK (software developers kit) they use to write them.

This can have real repercussions. Erica Sadun, author of “The iPhone Developers Cookbook,” (Addison-Wesley), has had to delay publication rather than risk running afoul of Apple’s legal team.  “[My publisher has] advance orders,” she told Ars Technica, “they have commitments.”

A “very polite petition” asking Apple to lift the NDA had drawn a couple hundred signatures as of Monday night. By then, a Web site called “[expletive deleted] NDA,” which keeps track of every time that phrase is uttered on Twitter, had collected 15,000 hits.

On Sunday, July 13, Apple (AAPL) issued a press release announcing that 10 million apps had been downloaded from the App Store in its first three days; by July 21, that number had risen to 25 million.

“The App Store is a grand slam,” said Steve Jobs. “Developers have created some extraordinary applications, and the App Store can wirelessly deliver them to every iPhone and iPod touch user instantly.”

Apple has not yet marked the 1,000 application milestone — or responded publicly to the developer complaints.

The barricades are still in place outside the glass cube of Apple’s (AAPL) flagship store on Fifth Avenue, and the line of customers still snakes down to 58th Street.

To the amazement of Apple staffers handling the crowd, hundreds of shoppers were lined up Thursday afternoon for a chance to buy  an iPhone 3G - 14 days after it first went on sale.

“I thought by now everybody who wanted one would have bought it,” said a clerk in an orange Apple T-shirt, as he processed transactions for Macs, iPods and various accessories. Customers not buying iPhones moved freely in and out of the store. The people in the iPhone queue waited patiently for a signal from security that it was their turn to shuffle in.

The last person in line, a young man in earbuds who had just arrived, said he’d heard there was a five hour wait but was pretty sure it wouldn’t take him that long.

At the head of the line was a young woman from Poland. No, she quickly added, she didn’t come just for the iPhone. But she had been standing in line for four and half hours.

After suffering severe product shortages — and frustrating untold numbers of would-be buyers — Apple by fits and starts seems to be getting its iPhone 3G supplies in order.

Thanks to a pair of free tools that have emerged to take advantage of Apple’s raw data feed of store-by-store availability, we’re getting a much better picture of the company’s supply and distribution problems than is afforded by the availability widget on Apple’s website.

The first is Chris Barnes’s real-time iPhone 3G Store Availability tool, which dips into the data feed every 15 minutes and displays all the information on one page — rather than breaking it up into state-by-state reports as Apple does. That way you can see at a glance that, as of Thursday 6:30 a.m. EDT, for example, the 16GB White iPhone 3G was in stock in 97 of 188 Apple stores in the United States, or 52% of all company shops.

[UPDATE: Apple seems to be having trouble with its data stream. As of Friday 7:00 a.m. EDT, its own widget showed no iPhones available anywhere in the United States. Barnes' TopMuffin site, using data updated at 3:53 a.m., reported that there are iPhones -- at least white ones -- in stock in most states.]

The second tool is a series of fever charts published by Sean Harding on his personal blog here. We’ve posted several examples below the fold. When the data are arrayed to show availability over time, some interesting patterns emerge. For one thing, you can clearly see where the iPhone supply nearly flatlined on July 20, when only three Apple stores in the United States had any in stock (see Comic relief: The world is out of iPhones!).

You can also see how supply varies during the day, as stores run out of units one by one, and then spikes in the morning as the stock is replenished. On Wednesday morning, for example, the percentage of Apple stores with iPhones in stock reached 80%, although by the end of the day it was down to just over 50%.

The charts also suggest that the black 8GB model is the most popular and the white 16GB the least — although that assumes that Apple (AAPL) is manufacturing the three varieties in roughly equal numbers.

Below the fold, as promised, Harding’s most recent charts.

Well, not quite. As of Sunday 9 p.m., according to Apple’s (AAPL) availability widget, there were three stores in the United States that still had iPhone 3Gs in stock:

• New York City, Fifth Avenue: White 16GB only
• Pleasanton, Calif., Stoneridge Mall: Black 16GB only
• Salem, N.H., Rockingham Park: White 16GB only

What would the world look like without that widget? Below the fold, Justine Ezarik (iJustine) gives us a peek:

Eight days after Apple’s new iPhone went on sale, an international team of programmers announced on Saturday that the device had been “pwned” — hacker jargon for “controlled” or “compromised.”

The loosely organized group, which calls itself the “iphone-dev team,” played an important role in the worldwide dissemination of the original iPhone, releasing a series of tools that allowed the device to run third-party software and to work in countries where Apple had not yet struck deals with local carriers. By February 2008, estimates of the number of unlocked iPhones in circulation around the world ranged from 800,000 to 1.5 million. (link)

But the value of the latest hack, dubbed Pwnage 2.0 and available for free download here, is not so clear.

For one thing, although it “jailbreaks” the new iPhone — meaning it allows it to use programs not authorized by Apple — it does not yet “unlock” it to run on unauthorized cellular networks.

Moreover, the very real needs that the iphone-dev team served in the first year of the iPhone’s release have largely dissipated.

Whereas there were almost no native third-party programs for the original iPhone, today there are hundreds available at Apple’s App Store, 25% of them free. (See here.)

And even if the iphone-dev team releases an unlock tool for the new iPhone — which it probably will soon enough — Apple (AAPL) and its partners have effectively shut down the black market for unlocked iPhone 3Gs by requiring that buyers either sign a long-term contract with a carrier or pay a prohibitively high price for the phone. The official price of an unlocked, pre-paid 16GB iPhone in Italy, for example, is 569 euros ($888).

The real value of the new tool — which can both jailbreak and unlock the original iPhone — may be for people who want to use the iPhone classic in countries with expensive calling and data plans (Canada and New Zealand come immediately to mind).

But there are risks to consider. Installing any unauthorized firmware on an iPhone voids the warranty and could “brick” the device. Even though the new jailbreak program has an easy-to-use interface and is supported by step-by-step instructions — with screen grabs — a high percentage of the user comments here and here are from iPhone owners who have run into serious problems.

Don’t be fooled by the friendly interface. Pwnage 2.0 is not for the faint of heart.

UPDATE: Erica Sadun, an iPhone developer and veteran jailbreaker, reports on TUAW that she has liberated her iPhone 3G with the new tool. “Without getting in details,” she writes, “I’d rate the new 2.0 Pwnage software as ‘for dedicated hackers only.’” (link)

Fasten your seat belts.

Although Apple should report better-than-expected quarterly earnings after the close Monday — it almost always does — its shares could be in for a bumpy ride on Wall Street.

Apple’s (AAPL) stock price — having bungee-jumped from $200 in late December to below $120 in mid-March and then back up to $190 in mid-May — has been drifting lower ever since, despite the high-profile launch of a new iPhone and the expectation of sharply higher earnings.

According to Thomson Financial’s survey of analysts, Apple is expected to report net income of $972.6 million, or $1.08 per share, on sales of $7.4 billion. In the same period last year the company earned $818 million, or 92 cents a share, on sales of $5.4 billion.

But these days, even 18% earnings growth from Apple is unlikely to impress the Street. The company could report its best third fiscal quarter (our calendar Q2) yet and still lose market value.

By most accounts, Q3 was a strong one for Apple. In a report to clients issued Friday morning, Piper Jaffray’s Gene Munster saw good news in all three of its key divisions:

• Macintosh: He believes Apple will announce quarterly sales of 2.35 million Macs — 33% year-to-year growth in an industry that is growing at half that rate. (On Wednesday Gartner reported that Apple is now the No. 3 computer maker in the United States. See here.)
• iPhone: Munster is expecting Apple to report that it sold 730,000 iPhones in Q3 — slightly better than the 700,000 Apple already reported. (The 1 million iPhones that Apple claims flew off the shelves in three days last week don’t count until next quarter.)
• iPod: Although many had predicted that the iPhone would cut into iPod sales, Munster is seeing little cannibalization so far. He expects Apple to report 10.5 to 11 million iPods sold — up from his previous estimate of 10.25 million.

But Wall Street’s antennae are finely tuned for disappointment. Although Apple just had a record-breaking, made-for-TV product launch — with people still queuing up for the iPhone 3G a week after it went on sale — none of that produced much traction in Apple’s share price. Investors seemed to concentrate instead on the fact that Apple’s iPhone activation servers melted down, that most of their stores ran out of product and that the new MobileMe suite of Web services is a mess that the company still hasn’t cleaned up (see here).

Shaw Wu, the top Apple analyst at American Technology Research, is focused on the company’s gross margins, which came in surprisingly low last quarter for reasons that were never adequately explained. He’s expecting gross margins of 33.5%, slightly higher than the company’s 33% guidance. But he notes that lower component prices last quarter did not translate into higher gross margins. “Investors chose to ignore this and gave AAPL a ‘free pass,’” he writes. “Given the macro environment, this quarter investors may not be so forgiving.”

In an article entitled “Why I’m Shorting Apple Ahead of Earnings” that got a lot of attention on the Seeking Alpha website last week, investor Ben Shuleva ticked off a litany of reasons he expects Apple’s share price to get punished after Monday’s earnings report, from cutbacks in education budgets that could eat into Apple’s back-to-school sales to the way Apple books iPhone revenues over 24 months, an accounting complexity the Street still doesn’t understand, no matter how many times Apple explains it.

“I am not bearish on Apple long-term,” Shuleva wrote. But… “I am willing to make a significant bet that on a short-term basis, Apple’s share price will deteriorate.” (link)

Finally, there’s the matter of Apple’s guidance for its fourth quarter, which ends in September. Peter Oppenheimer, Apple’s chief financial officer, has been known to send the stock into a tailspin by issuing numbers that are miles below Wall Street’s expectations. “We believe AAPL will likely continue its tradition of conservative guidance,” writes Wu, with considerable understatement.

The question is, how conservative? If it’s the usual 9% or 10% below expectations, it shouldn’t make much difference. Anything lower could damage the stock. And if Oppenheimer offers guidance that’s better than expected, who knows, the stock might actually go up.

Apple executives will discuss the company’s Q3 quarterly result and offer guidance for Q4 in a conference call Monday at 5 p.m. EDT (2 p.m. PDT). Apple plans to webcast the call (click here). We’ll be dialing in — and live blogging — at Apple 2.0.