Apple readies App Store for iPhone

Apple's iPhone.

TEXT OF STORY

Kai Ryssdal: Over in Japan, lines are already forming outside Apple Stores. The next generation iPhone -- the 3G, it's called -- goes on sale worldwide this Friday.

The 3G's not the only new new thing, though. Apple's new App Store is opening, too.

Janet Babin reports now from the Marketplace Innovations Desk at North Carolina Public Radio.


Janet Babin: Say you're out and about in a new town -- we'll pretend it's vacation to make it more fun -- and as usual, nobody can agree on where to eat. One wants tofu turkey, another filet mignon.

If you had the right mobile application, you could use your iPhone to pinpoint a nearby restaurant on the water that serves both.

You'll be able to download that application and hundreds of others at Apple's new App Store this Friday.

Mobile software developers like Donald McMillan at Schmap.com can't wait.

Donald McMillan: Just to have that distribution outlet is really enticing for a lot of developers, so everybody's very excited to see where it goes.

Nobody's more excited than Apple. Analysts say the App Store could be part of a billion-dollar iPhone universe by next year.

Third party programmers have already downloaded 250,000 copies of Apple's software kit. Many are enticed by the potential payoff. Programmers will earn 70 percent of what they sell, compared to the usual 20 percent they get elsewhere. Most of the software will be inexpensive; some of it could be free.

Analyst Gene Munster with Piper Jaffrey says Apple's new strategy will pay off down the line.

Gene Munster: Essentially what Apple's doing is saying, "If we motivate the developers to create world class applications, that's going to make our phone a better phone."

Munster predicts that Apple will sell 45 million iPhones next year, up from 12 million this year. That's a big jump, but still a small slice of the market. Nokia alone sold more than 400 million phones last year.

I'm Janet Babin for Marketplace.

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