THE REAL REVOLUTION IS THE APP STORE

The Applications Store by Apple is an unparalleled daily revenue generator and truly a game changing concept from Apple. When the App Store first launched just 2 years ago in 2008, no one could have predicted just how successful it would become. Now it doesn't matter whether you're Sprint, AT&T, Verizon, TMobile, or any other telecom company in the world, if you sell a smartphone today, you have to have applications to run on the smartphone.

For smartphones (a concept pioneered by Apple with the launch of the IPhone), I give Apple a lot of credit for out of the box thinking on the business model for Apps. Apple knew they had neither the resources nor the personnel to devote to keeping applications within Apple's walled garden environment (ITunes Store). Rather than keep it as an internal software division, Apple agreed to a 70/30 (the developer gets 70%, Apple gets 30%) of the revenue from what is basically micropayments on a software license. Apple has created a business boom in the middle of a recession. There are now a lot of mini-applications start up companies whose business model is entirely built around ecommerce and not advertising. (Hey, that's how Bill Gates and Steve Jobs started their company's). And Apps are wildly successful. With over a 1 billion downloads, I wonder how much money Apps contribute to Apple's total revenue.

Now with the launch of the IPad, Apple will be charging more money for the apps and people will pay it. I was IMing a friend of mine who works for Apple, and he said that the Apps will really make the IPad standout from its competitive netbook devices, and he's right. In fact, with Apps going from IPhones to the IPad, what consumers are really signalling is that Apps could be the new way consumers interact with the web itself. Currently consumers interact with the web by typing an address into a browser, but more and more consumers are pressing an app, inputting information and getting a customized software response. As Tim Reilly put it, "cheap sensors are ushering in an era of user interface innovation."

Personally, I still have not paid for any of the apps on my IPhone, but I would if there was one I really liked or wanted. Who would have thought 2 years ago that apps would be the rage that they are today in the technology industry? Like my IPhone and the DVR, I can't imagine digital life without them.