'App Store' will distribute iPhone software

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Apple said Thursday that it will control the sale and distribution of all iPhone software created by independent developers. The software will be distributed via a new program on the iPhone called App Store, as well as on Macs and PCs via a new section of the iTunes Store.

Unveiling App Store during Thursday’s iPhone briefing at Apple’s Cupertino headquarters, CEO Steve Jobs described App Store as “an application we’ve written to deliver apps to the iPhone. And we’re going to put it on every single iPhone with the next release of the software.”

That software—the iPhone 2.0 release—is slated for June and will also include the Software Development Kit announced Thursday. A beta of the SDK is available now from Apple.

The iPhone 2.0 release will be a free update for iPhone users. Jobs said the same software update will also be available to iPod touch owners, though they’ll be charged a fee, just as they were in January when Apple charged $19.95 for the 1.1.3 software update.

“The way we account for the iPhone is with subscription accounting, so we take the revenue over two years,” Jobs explained at Thursday’s briefing. “The way that we account for iPods is more normal accounting. And so, because of that, we have to charge a nominal fee… But we don’t look at this as a profit opportunity.”

The App Store

When it debuts, the App Store will borrow its look-and-feel from the iTunes Wi-Fi Store, the online retail outlet that allows iPhone and iPod touch users to buy music directly from their handheld devices. The App Store will break out items, categories, and top downloads into lists. A search function will help iPhone users find the applications they want.

Users tap the price of an application to download the software. A second tap will install it on the iPhone, either over a cell network or via Wi-Fi. Alternately, users can buy iPhone applications through iTunes running on a computer, installing them by synchronizing the iPhone.

Under the plan announced by Apple Thursday, developers will get 70 percent of the revenue from application sales, with the other 30 percent going to Apple. Developers will get their share of the revenue from Apple on a monthly basis.

“We don’t intend to make any money off the App Store,” Jobs said. “We’re basically giving all the money to the developers and the 30 percent that pays for running the store, that’ll be great.”

In addition to offering third-party apps for a fee, the App Store will also include free applications from developers.

The App Store will also handle updates to iPhone applications users have previously bought and installed, notifying users when updates are available. One tap of the Update button will download and install the updated version over the air.

While this opens the door to third-party software developers who want to create products for the iPhone, Jobs said their will be limitations on what Apple will allow to be published through the App Store. Apple executives specifically cited porn, privacy-breaching tools, bandwidth-hogging apps, and anything illegal as an example of the restrictions. The slide in Jobs’ Keynote presentation also listed “unforeseen,” leaving open the possibility that Apple could redefine what’s acceptable in an iPhone app at a later date.

The SDK itself is available for free. Developers can also run a simulator on their Macs. Developers who want their applications distributed through Apple pay a $99 fee to join the company’s new iPhone Developer Program.

Updated at 3:45 p.m. PT to add new information and comments from Steve Jobs throughout the article.

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