Apple’s App Store is open for business, and there’s a lot to see.

I count nearly 27 pages of programs, with 21 applications per page, for a grand total of 551 apps designed for the iPhone or the iPod touch.

Browsing this rich library of diversions, the first thing that strikes you is how many of them are games.

In Apple’s taxonomy, 10 pages of apps — 210 programs in all — are categorized as “Entertainment.” Not all of these are games, however. There are a lot of books in there. Charles Dickens and Edgar Rice Burroughs are heavily represented, as are Austen, Bronte, Conan Doyle, Conrad, Defoe, Dostoevsky, Hardy, Kipling, Maugham, Swift, Verne, Wharton, Wolfe, and “Leo” (sic) Tolstoy. There’s even a copy of Descartes’ A Discourse on Reason. That’s Entertainment?

The Bible, we’re happy to report, is not classified as Entertainment, although we’re not sure Reference is quite the right place for it.

There are 18 categories of programs in all, from Business to Weather. None is as heavily populated as Games or Entertainment. There are two and a half pages of Productivity tools (from Abacus to ZIPcodes), a page and a half of Business programs, a little over a page of Finance tools, and nearly five pages of Utilities.

There’s only a page and a half of Social Networking programs, but they look pretty interesting — especially the ones like Whrrl that take advantage of GPS to show your current location and that of your friends.

Travel is dominated by language programs, Sports by fitness and Golf tools.

Apple (AAPL) also sorts programs by What’s New, What’s Hot and Staff Favorites. The latter features Critter Crunch, iZen Garden and Chimps Ahoy.

Have you got a favorite or spotted a dog? Let us know in the comment stream.

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 was mid-May the last time FBR Capital Market analyst Craig Berger checked with his contacts in Apple’s supply chain, and what he heard then was bad news: orders for iPhones for the second quarter had just been been cut 25%.

But FBR went back to those same sources earlier this month, and on Thursday he and Robert Pikover reported “big positive revisions” in Apple’s so-called build forecast.

“Our latest checks show forecasted calendar 3Q and 2008 iPhone build volumes have been revised significantly higher, with more than 15 million 3G iPhones plus two million old 2G iPhones forecast for 2008,” they wrote in a note to clients.

Apple’s official target is to sell 10 million iPhones in 2008.

In other Apple (AAPL) supply chain news, Berger and Pikover report:

• More iPods: iPod builds were revised up 15% since their last report, with strong Classic and Nano builds offsetting slighly lower iPod touch builds — a surprise given the number of iPod touches being given away this summer in back-to-school sales.
• New iPods: “We hear a new, lower priced Nano may be coming, as well as refreshed versions of the Touch and Classic,” they write.
• More Macs: Apple’s 3Q notebook and desktop build volumes were revised up by 10% and 20%, respectively.

In summary, they like what they hear:

“For Apple, the firm continues to knock the cover off the ball in terms of product innovation, sleek designs, attractive price points, and effective global deployment plans. These checks confirm Apple’s product cycle momentum continues to gain steam.”

Via Seeking Alpha and Silicon Alley Insider.

Details of Apple’s 2008 back-to-school promotion have already leaked out and they sound like a smart way to spread interest in Steve Jobs’ growing family of hand-held wireless Internet devices.

According to both AppleInsider and MacRumors, the No. 1 incentive is a free 8GB iPod touch for any college student who purchases a qualifying Mac. That’s a $299 value to the student - in addition to the usual educational discount. Alternatively, according to AppleInsider, the student can apply $299 credit toward purchase of a higher-capacity player or, for whatever reason, settle for a $199 iPod nano (last year’s top incentive).

Qualifying Macs, according to MacRumors, include the MacBook, MacBook Pro, MacBook Air, iMac and Mac Pro.

The promotion, which runs from June 3 to Sept. 15 and is expected to be announced Tuesday, is particularly well-timed. Not only will it seed campuses with multi-touch devices that tend to be their own best advertisements - especially in environments rich with free Wi-Fi - but it will, as MacRumors points out, give developers getting ready for the 3G iPhone launch an even bigger installed base for their games and other apps.

And remember, although the device is worth $299 to the student, it costs Apple (AAPL) a whole lot less to build.

No, it’s not ready for download, but here’s a sneak peek at the future of gaming on Apple’s (AAPL) iPhone and iPod touch, via HermitWorks Entertainment, a casual game developer based in Grande Prairie, Alberta.

It’s a port of Quake III Arena, modified for the new platform. Note the use of the accelerometers to control movement through the arena and the touchscreen to fire weapons. Note also that with two iPod touches, you can blow yourself to smithereens.

Click on the image to watch the YouTube video.

Thanks to 9to5 Mac for the tip.

Three days ago it seemed as though the world had finally opened up for would-be iPhone developers.

After eight months of pent-up demand, the pieces were in place to begin exploiting the new platform in earnest. Getting hold of the free software developers kit (SDK) was as simple as entering your iTunes name and password. The tools were powerful. The support was rich.

The programmers were “excited,” Apple’s PR department assured us more than once. On Wednesday, the company issued a press release to announce that an astonishing 100,000 copies of the SDK had been downloaded in just four days. Said Apple (AAPL) product marketing VP Phil Schiller: “Developer reaction to the iPhone SDK has been incredible.”

Developer reaction today is somewhat more muted. “The twitterati,” writes Erica Sadun at TUAW, “are reporting widespread disappointment and anger,”

It turns out that it may be easier for a camel to get through the eye of a needle than for a third-party developer to get into Apple’s iPhone Developers Program.

By week’s end, almost everyone who had downloaded the SDK and offered to pay the $99 ($299 for enterprises) to become an official iPhone or iPod touch developer had received Apple’s polite but firm rejection letter:

Dear Registered iPhone Developer, Thank you for expressing interest in the iPhone Developer Program. We have received your enrollment request. As this time, the iPhone Developer Program is available to a limited number of developers and we plan to expand during the beta period. We will contact you again regarding your enrollment status at the appropriate time. Thank you for applying.

What stings for the developers who got what reads like a pink slip is that they know Apple has already let its favorite partners under the tent. In addition to the companies that demoed at the March 6 event (EA, Salesforce, AOL, Epocrates, Sega) Apple quoted a quite a few more the press release (Intuit, Namco, Netsuite, PopCap, Rocket Mobile, Six Apart and THQ Wireless).

“The articles going around saying Apple is ’stalling for time,’ implying that everyone is getting ‘rejection’ letters, are false,” writes David Schroeder, who manages Apple support at the University of Wisconsin-Madison, in a MacRumors Forum. “Select developers and enterprise customers are already included in these programs.”

One the bright side, he adds: “When June arrives and iPhone OS 2.0 is final and the App Store is rolled out, everyone will be able to participate in all developer programs. Also, to be clear, NO ONE has to wait to begin developing and testing their iPhone apps today. Anyone can download the iPhone SDK beta for free, and there is nothing stopping you from developing iPhone apps now.”

Well, not quite. Despite Schroeder’s assurances, U.S. developers have no guarantee they’ll ever be accepted into the program (developers outside the U.S. need not apply at this time). Meanwhile, without Apple’s blessings they are reduced to working on an iPhone or iPod touch simulator, unable to test the devices’ touch screen or accelerometer — key features for game developers.

Besides, who wants to be the second — or 100th — developer to introduce a particular kind of app, especially when the first to market has deep pockets and an inside track at Apple.

“In other news,” writes Daniel Jalkut to TUAW’s Sadun, “it looks like the Jailbreak Developer Program still has open slots, and people are getting approved as I type.”

As predicted, the version of the long-awaited iPhone software developers kit (SDK) being released today is still in beta, or test mode. According to Steve Jobs, the finished software will be shipped to developers as a free software update in June. (See Apple’s press release here.)

These and other details of the so-called iPhone software roadmap were revealed today at an Apple (AAPL) special event on the company’s Cupertino campus.

After several demonstrations of what third-party developers were able to create with only two weeks notice — including a preliminary version of Electronic Arts’ Spore — Jobs spelled out the terms by which iPhone programs will be distributed.

• The developer picks the price and keeps 70% of the revenue, paid monthly
• There’s a one-time $99 iPhone developers fee
• Most developers will pick “free,” says Jobs, and Apple will host their software for free
• Apple distributes the software on the iTunes store
• Apple absorbs the credit card and hosting fees
• There are some apps Apple will not distribute (porn, malware, duh)
• iPhone update 2.0, due in June, will contain the enterprise support and the SDK
• iPod touch will also get these features, but for a “nominal” fee to be set in June
• Kleiner Perkins has created a $100 million iFund to support iPhone developers

It’s perhaps a measure of how badly Apple (AAPL) investors needed to hear from someone — anyone — high up at the company, that all it took to move the stock nearly 4% in after-hours trading on Wednesday was for COO Tim Cook to answer a few questions.

The stock had fallen more than 80 points since December and has been getting pummeled in recent weeks by rumors of falling component orders and reports from bearish analysts — chief among them Bernstein Research’s Toni Sacconaghi, who estimated last week that Apple would miss its 2008 target of 10 million iPhones by more than 2 million units. With nobody from Apple stepping up to speak to these issues, the stock had nowhere to go but down.

But yesterday afternoon Cook talked for 45 minutes before at packed house at the Goldman Sachs Technology Investment Symposium, answering the questions that had been piling up — about inventory levels, iPod sales, unlocked iPhones, the timing of price cuts and the growth potential of the Mac.

There wasn’t much news — for the most part, he reiterated the company line — but for investors there was clearly something reassuring about hearing Apple’s strategy laid out clearly, calmly and for the most part without hype. That is to say, by someone other than Steve Jobs.

The main news to come out of the session was Cook’s repeated assurances that Apple is committed to hitting that 10 million iPhone target in 2008 and will do whatever it takes to make it — even if it means offering the iPhone to multiple carriers in some countries and selling unlocked phones. “We’re not married to any business model,” Cook said.

He also described the surprisingly large number of hacked iPhones turning up around the world as a good problem to have. When users are “stepping over each other” to get to a device, it’s a sign of pent-up worldwide demand.

He touched on most of the hot topics, saying among other things …

• There is “huge headroom” in the Macintosh market
• Apple TV is still a “nichey” product but has “enormous opportunity”
• iPod shuffle sales were down 17% globally last Q, thus the price cut
• 40% of iPod sales in U.S. are to new customers; that doesn’t feel like a saturated market to him
• The iPod touch is the beginning of a new mobile platform
• The $200 iPhone price cut last September was in part to grow the user base and attract developers
• No more detail about the SDK until next week to keep “the element of surprise”

Nothing terribly surprising there. But for some investors tuning in to the webcast, what he had to say was less important than how he said it.

“I was just impressed as I could be,” wrote one listener on TMO’s influential Apple Finance Board. “I am always haunted by the vulnerability of Apple’s shareholders like myself if something should happen to Steve Jobs. For the first time, listening yesterday to Tim Cook made me feel confident that in him was a person who could ably step in if Jobs fell off the earth.” (link)

You can hear a replay of the webcast here. For more analysis, got to Techmeme here.

The iPhone software developers kit (SDK) promised for February may not have materialized, but Feb. 26 turned out to be a busy day for Apple(AAPL) nonetheless. The big news was the refresh of the MacBook and MacBook Pro lines (see here), but there were these items as well:

Frequent flier:Morgan Stanley’s Kathryn Huberty rooted through Apple’s 2007 10K and discovered that the company reimbursed its peripatetic CEO $550,000 in airline expenses for the December quarter — three times the average over the previous six quarters (see here). She cites these expenses — presumably incurred on the Gulfstream jet the company gave Jobs in 2000 — as a reason to buy the stock. A better reason would be if Jobs brought home signed iPhone deals with new carriers in Europe and Asia.

iPhone 1.1.4:The latest firmware update for the iPhone and iPod touch, released Tuesday afternoon, was a big one (162.1 megabytes) that except for unspecified bug fixes seems to have added zero functionality. The prevailing theory is that the update is setting the stage for the release of the SDK some time in the weeks ahead.

iTunes rising:The NPD Group reported Tuesday that iTunes has edged aside Best Buy (BBY) and Target(TGT) to become the No. 2 music retailer in the U.S., behind only Wal-Mart (see Apple’s press release here). With 50 million customers and more than 4 billion songs sold so far, Apple will likely overtake Wal-Mart (WMT) before the end of the year, according to Russ Crupnick, NPD’s president of music (see here).

News out of overseas chip factories this week cuts both ways for Apple (AAPL), the world’s No. 3 buyer of NAND flash memory.

The report getting the most attention — and stirring the most controversy — is the one published Wednesday by iSuppli Corp. Based on what chip makers are telling it, iSuppli is cutting its outlook for revenue growth in NAND flash memory (the chips used in MP3 players and USB drives) from the 27% it had expected for 2008 to “single digits.”

“NAND suppliers are likely to go into the red in the first quarter,” warns Nam Hyung Kim, iSuppli’s chief memory analyst, “and are not likely to recover in the second.”

Grim tidings for the chip makers, no doubt.

The controversy comes from what the iSuppli report had to say about Apple’s role in the shortfall:

In an early warning sign of consumer weakness, Apple Inc. has slashed its 2008 NAND order forecast significantly and has informed suppliers that its demand growth will slow in 2008 compared to 2007, according to iSuppli sources. … Before word of Apple’s warning, iSuppli had predicted the company’s NAND flash purchases would rise by 32.2 percent this year, helping drive significant market growth. (link)

Sounds pretty ominous, and the paragraph may have played a role in shaving a couple points off Apple’s share price on Thursday.

But several commentators have taken issue with the use of the word “slash” to describe Apple’s order forecast. As Tom Krazit at CNET points out, Apple’s demand for flash is still growing rapidly, despite the broader slowdown in consumer spending. In fact, by his calculation, Apple is still planning to purchase 27 percent more flash memory this year than last year — just not the 32 percent iSuppli had expected.(link)

[UPDATE: Krazit now says that his calculations were wrong. "This was an error on my part," he writes in a corrected blog. "The 27 percent increase in flash memory spending in 2008 was iSuppli's previous expectation for the global market, not the revised expectation for Apple's spending. Right now, iSuppli doesn't have an estimate of how much Apple plans to spend on flash memory this year, and won't until more data becomes available."]

Moreover, what’s bad for memory makers may actually be good for Apple. Chip prices were already plummeting (4GB flash memory fell more than 73 percent since last August, according to IDG), and a memory glut could drive them even lower. As Richard Hyde writes in Seeking Alpha:

Here is where the story gets interesting for Apple. Not only do they reap the benefit of huge decreased pricing, the difference between the 8GB and 16GB modules is only $11, even though the iPhone models differ by $100. Similar savings are seen in the 16GB and 32GB iPod touch. (link)

No wonder Apple can afford to cut the price of the iPod shuffle from $79 to $49. If it wanted to drive up demand, it could probably afford to cut prices all across the iPod and iPhone product lines.

Below the fold, iSuppli’s breakdown of the chip makers’ NAND revenue market shares for 2007.