Apple’s Billion-Download Baby

iPhone App Store

It’s official. After earlier reports the day was fast-approaching, Apple today announced the one billionth download at its iPhone App Store.

The news comes at a time when the unprecedented popularity of the App Store has earned Apple (NASDAQ: AAPL) a host of competitors in the mobile space, including Research in Motion (RIM), which launched its App World for BlackBerry online store last month. But Apple’s big download number will be hard to catch.

The number of applications available on the iPhone App Store has also grown steadily. Apple said during its earnings call yesterday that there are now over 35,000 applications available at the App Store, which went live nine months ago.

Thirteen-year old Conner Mulcahey of Weston, Conn., got more than he expected when he downloaded the application Bump from Bump Technologies, a program that lets you share contact information by physically “bumping” one iPhone into another.

It turned out to be the billionth download at the App Store, and Apple rewarded him for hitting that lucky number. The company said Mulcahey will receive a $10,000 iTunes gift card, an iPod Touch, a MacBook Pro notebook and a Time Capsule storage appliance.

Meanwhile, the application’s developer touted the news at its Web site with a note that the download was “the Bump heard round the world.”

Analyst Maribel Lopez said App Store’s latest milestone is part of a broader trend that applications and services are fast-becoming a key revenue stream for device makers.

“A billion downloads is a real business opportunity,” Lopez, CEO of Lopez Research, told

“When Apple launched the App Store there were a lot of speculation that no one was paying for anything because there were so many free apps,” she said. “But there are plenty of paid apps now. And Apple is making its platform and the device more interesting to business and consumers.”

“Think about how many things get better as time goes on. Not many. But every time a cool new app comes out, your iPhone gets better,” she added.

Analyst Roger Kay said Apple has established the App Store model as the new way to buy software for free or low cost.

“Over time, others may close the gap, but Apple has a nice lead of at least several years before anyone else can hope to catch up,” said Kay, president of Endpoint Technologies Associates.

Lopez agreed other App Store wannabes have plenty of catching up to do.

“I think it’s going to take a couple of iterations for the competition to reach the level of smoothness the App Store offers,” she said. “But the model is out there for all to see, and it should be easier to match or exceed the app store experience than say, matching the iPhone’s overall user experience.”

Apologies for controversial app

It hasn’t been all smooth sailing for the App Store, though.

Just this week, Apple apologized for having approved the application Baby Shaker after the app was roundly condemned by parents groups. The game shows a cartoon of a crying baby which becomes less animated as players shake their phone until red crosses appear over the baby’s eyes, indicating it is dead.

Apple removed the game and said it shouldn’t have been approved in the first place.

Despite Apple’s groundbreaking download numbers for the App Store, the company’s fans and customers are already looking for its next move.

What’s next?

iPhone developers and fans are anxiously awaiting news from Apple’s Worldwide Developers Conference (WWDC) this June, which may include the release of a new iPhone model.

Apple has already released a software development kit (SDK) preview of new operating system software, version 3.0, for the iPhone that’s expected to spark a new series of applications for the device.

Among the new features in iPhone OS 3.0 will be the ability to make purchases within an application, “push” notifications and application control of iPhone accessories. Users will also be able to use cut, copy and paste functions for the first time.

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