A year after opening App Store, Apple sitting pretty

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How can you tell that the App Store’s first anniversary is a big deal? Even Apple—which normally treats milestones the same stony silence divorced couples regard their erstwhile wedding anniversaries—has acknowledged the event.

Earlier this week, Apple opened a new section at its online emporium for iPhone and iPod touch apps that marks the App Store’s first year in business. That’s a modest amount of hoopla, to be sure, but for a company that barely uttered a peep earlier this year to mark the silver anniversary of the original Mac’s industry-changing debut, a page at the App Store is practically a ticker-tape parade.

Apple certainly has plenty to celebrate with the App Store, which officially opened its doors on July 11, 2008. (Of course, since that opening was timed to coincide with the iPhone 3G’s worldwide launch, the App Store actually sprang to life on July 10 here in the States.) The App Store debuted a year ago with 552 applications aimed at iPhone and iPod touch users.

And now? Macworld’s App Guide lists more than 58,000 apps available for download. Considering that the App Store topped the 20,000-app mark in early February, it seems that the pace of iPhone app development has only picked up in recent months.

These app aren’t exactly sitting untouched on the App Store’s shelves, either. The store passed the 1 billion download mark in April. (Whether those app are being used much after they’re downloaded is, of course, a subject for much debate.)

“Fifty thousand-plus apps and 1 billion downloads kind of speak for themselves,” said Michael Gartenberg, vice president of strategy and analysis at market-research firm Interpret. “The App Store is an unqualified success. It’s set the bar for the industry.”

Indeed, other smartphone players have decided that they wouldn’t mind an App Store of their own. As Gartenberg notes, Google, Palm, Research In Motion, and Nokia have all opened mobile application stores, with Vodafone and Microsoft planning efforts of their own. The App Store “has made everyone else scramble,” Gartenberg said.

Those companies will have a hard time matching Apple’s success. The App Store has thrived because, unlike many of the mobile software retail efforts that already existed, it delivered convenience to end users and app makers alike.

“Apple’s App Store is successful not just because it is easy to browse but because of the processes underlying it,” said Avi Greengart, research director for consumer devices at Current Analysis. “Developers know how to get to market and how much they will get paid, while consumers know there is a single place to obtain applications and a simple purchasing experience.”

Gartenberg agrees: “None of the other platform providers had ever taken the step of connecting users to third-party applications and showing what they can do.”

It helps that software makers have stocked the App Store with an impressive array of applications, everything from productivity boosters to games that rival what you’d see on a dedicated handheld gaming console. Critics of the App Store often cite the plethora of disposable 99-cent novelties—noisemakers, quizzes, and other diversions—but that ignores the significant portion of apps that actually extend the capabilities of the iPhone and iPod.

“Even if you apply Sturgeon’s Law [that 90 percent of everything is crud], that still means the App Store has 5,000 good apps, which is about 4,900 or so more than anyone will ever need,” Gartenberg says.

And Apple has used those good apps to its advantage, making them the centerpiece of its TV advertising for the iPhone. You can’t watch television for long these days without coming across a 30-second spot advertising that “there’s an app for that.”

Current Analysis’ Greengart says that the TV commercials has succeeded in convincing consumers that buying a smartphone means considering the applications that support it. And that’s good news for Apple as the iPhone faces stepped-up competition from the Palm Pre, BlackBerry Bold, and a host of Android OS-based devices.

“It is no longer enough to match the iPhone’s user interface and media capabilities,” Greengart said. “Now you need to compete with 50,000 applications.”

To be sure, the App Store faces some challenges in the near future. As the number of apps swells, it’s going to be harder for consumers to find programs as well as for app makers to get the word out about their software. “The sheer breadth of options on the App Store will become its own challenge,” Greengart said.

Apple is still struggling to perfect its oft-mysterious approval process for getting apps onto the store. Developers still chafe at the lag time from when they submit an app for approval to when it goes on sale. Meanwhile, Apple’s reasoning for rejecting some apps—while letting others with questionable content slip onto the store—remains a puzzle that a newly created parental rating system has yet to solve.

That said, Apple should be enjoying its perch in the catbird seat. “While these are problems for Apple,” Greengart said of the App Store’s increasingly unwieldy size, “they are problems Apple’s competitors would love to have.”

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