2008 Year in Review: App Store revolutionizes mobile software distribution, sales

Without a doubt, the July 11 introduction of Apple's App Store virtual storefront was the signature event of 2008. Launched in conjunction with the U.S. retail debut of the iPhone 3G, the App Store opened relatively modestly--in an interview with The New York Times, Apple CEO Steve Jobs said the storefront would initially feature more than 500 applications including educational programs, mobile commerce and business productivity tools, with games representing about a third of the first-wave apps. But consumers downloaded more than 10 million iPhone applications in the App Store's first three days and 60 million in the first month, a $21 million windfall for Apple's developer partners. By early December, iPhone owners downloaded more than 300 million mobile applications, with the total number of apps available via the App Store topping the 10,000 mark.

It's still too soon to calculate the App Store's full impact, but it's already rewritten the rules of mobile industry economics. Where operators once called the shots by controlling all access to the subscriber, the App Store concept has given developers a direct-to-consumer channel that circumvents carrier domination: Developers must no longer bow down to operator whims and demands to reach consumers--nor must subscribers troll carrier decks and retailer web sites in search of mobile applications optimized for their particular device or operating system. No wonder Google, Research In Motion and Palm have all announced rival app shops of their own, and a like-minded Microsoft effort is reportedly in the works--sometimes the simplest ideas are the most innovative.