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iPhone with Web app game

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Kai Ryssdal: Shares of Apple picked up another 2.5 percent today. That mainly because CEO Steve Jobs can figure out a way to make money almost without trying. We told you a couple of weeks ago about Apple's new App Store, where Apple lovers can buy fun new software for their iPhones and iPods. We learned it's pulling down a million dollars a day. Marketplace's Jeremy Hobson has the story.


Jeremy Hobson: The App store could easily be called the Game store. One of the most popular downloads is Sega's latest time-waster "Super Monkey Ball." (game music) For every software sale, the developer gets 70 percent; Apple gets 30. But analyst Ben Bajarin with Creative Strategies says Apple still comes out the winner, since it controls its own hardware and software.

Ben Bajarin: In a market that's as mature as we have right now with phones and PCs, differentiation is just absolutely critical. And you differentiate in hardware and you differentiate in software, and when you can combine those two together, you've got a very differentiated position.

And a way to stay ahead of the competition without creating a new iPhone every six months. Apps will sell more iPhones and iPhones will sell more apps.

Bajarin: The ability to customize through software will just add to the experience and make it fresh and new, and sort of keep up with the constantly changing consumer demands.

Apparently one consumer demand is for an app called iPint, where you can drink a virtual glass of beer. It's incredibly popular, but necessary?

Marc Flores: So far, I haven't found like any that I really really need.

That's iPhone owner Marc Flores at an Apple Store in Los Angeles.

Flores: I've downloaded maybe 16 to 20 apps, but they've all been the free apps.

Freebies aside, Apple CEO Steve Jobs says the App Store could eventually do a billion dollars in annual sales. Probably an over-statement, according to some analysts. But they say Apple's competitors are sure to copy the business model.

I'm Jeremy Hobson for Marketplace.

About the author

Jeremy Hobson is host of Marketplace Morning Report, where he looks at business news from a global perspective to prepare listeners for the day ahead.

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