Conventional wisdom in the computer industry holds that Apple lost the PC market to Microsoft not for technological reasons but for ideological ones. Apple was closed while Windows was open. In the 1980s and '90s, Apple made beautiful, innovative machines, but Microsoft made something more valuable: a "platform" that worked on any company's hardware—an operating system whose very ubiquity was its biggest feature. Programmers wrote applications for Windows because that's what most people were using. And most people were using it because that's what programmers were writing for. Economists call this sort of feedback loop a "network effect." For Microsoft, it was as good as a license to print money.
When Apple CEO Steve Jobs launched the iPhone last year, he appeared to be repeating his earlier mistakes. He offered no way for software companies to create add-on programs for the phone, and each time hackers managed to "jailbreak" the iPhone to get their apps on it, Apple worked hard to lock it up again. The strategy seemed insane: Apple had created the first practical mobile computer, but by shutting out other people's programs, Jobs was limiting the device's utility—and arguably its future sales.
But with the release of Version 2 of the device and its operating system, Jobs has brought a measure of openness to the iPhone. Apple calls the system the iPhone App Store, a geeky collection of hundreds of add-on programs with which to pimp your phone or iPod Touch. On the iPhone's main menu, the store is represented by an unassuming blue icon, but a more accurate rendering would include a huge pot of gold and an exploding volcano of dollar signs. That's because the simple and elegant App Store might do for Apple what Windows did for Microsoft—it gives the company a chance to cash in on the network effect for mobile phones. The App Store ensures that programmers around the world make Apple's device the main object of their innovation, and all that innovation virtually guarantees that the iPhone will remain a mobile device that customers keep lusting after.
You can install apps on competitor phones, but that often involves finding them online, downloading a file to your computer, syncing, and other technical rituals. The new App Store is a dream in comparison. It collects the hundreds of available programs in one place (right on your phone) and neatly divides them by type, popularity, or price. Many of the programs are free, and almost all of the others sell for less than $10. (The most expensive—a utility for pilots to plan their routes—goes for $70.) To get an app, you simply tap it, type in your iTunes password (for billing purposes), and wait about 20 seconds for the program to download. That's it—the icon materializes on the iPhone's menu, ready to run. Uninstalling is even easier: Tap the delete button, and the unwanted app disappears.
The best apps here are like little potions that imbue your iPhone with superpowers it didn't have yesterday. For instance, a big gripe among iPhone early adopters was the device's lack of instant-messaging software. Now, with AOL's free AIM app, all iPhone users can chat. They can also use the fantastic Apple-produced app that turns your iPhone into a wireless remote control for iTunes. Where you once had to trudge five or six feet to your computer in order to search through your music library, now you can do it from the couch. I'm waiting for a whole family of such remote apps—soon we'll use our iPhones to control multiroom music players, wireless security systems, and unmanned Predator drones.
At the moment, the App Store's pay offerings are dominated by games, with Sega's Super Monkey Ball (a version of the classic ball-in-maze game Labyrinth) at the top of the most-popular list. The game certainly looks slick—its graphics are superb, and it taps into the iPhone's accelerometer to move the characters as you tilt the phone in your hands. But I found the mechanics too difficult to master and quickly abandoned it. I did spend many hours playing Enigmo, a physics puzzler in which you guide droplets of water through various obstacles. (It's more fun than it sounds.) Enigmo is computationally intensive, and at times it seemed to overwhelm the iPhone's processor—but that didn't detract much from the game. More problematic was the iPhone's piddling battery. Don't expect to spend more than an hour or two of your cross-country flight playing iPhone games.
Many programs in the App Store access the iPhone's GPS chip (or, on the first iPhone, the cell-tower data) to feed you information about your immediate neighborhood. These are promising but so far more gimmicky than useful: It sounds like fun to shake your phone for random restaurant recommendations—but I rarely wanted to eat at any of the ones that came up.
One program did strike me as being truly revolutionary and worth every hassle you go through just to get an iPhone these days: Pandora radio. You may know Pandora from its many years on the Web; the much-beloved Internet radio service analyzes your musical taste according to a rigorous music-theory system and offers up songs it thinks you might like. Often, it's frighteningly accurate: Play Pandora on your computer for a few hours, and you start to suspect the software's tapped into your frontal lobes.
Like other Internet radio stations, Pandora has been trying to offer a mobile service for many years but hadn't had much luck convincing cellular carriers to play along. Last year, AT&T and Sprint signed up with Pandora, but both carriers required a monthly fee ($9 on AT&T and $3 on Sprint). Tim Westergren, the composer who founded Pandora, says that he's always wanted to offer a free, ad-supported streaming mobile radio station. The new iPhone lets him do just that.
When you load up Pandora, music that you love—some songs you know, some you don't—streams from the Internet and into your earbuds at no charge. You can tell the app what you like by pressing a thumbs-up or -down button, and you can always skip a track. (Buying songs you like is also very easy.) Do this for a few minutes, and you begin to wonder how you'll ever live without it.
Streaming radio is the perfect complement to an MP3 player—you could say it's the part of the iPod that's been missing all along. While your iPod plays music you already own, Pandora gives you music you don't know but will probably like. Now, with the iPhone and its built-in iPod, you've got both: a full library of songs you've purchased and the entire Internet of songs you might like.
Not everyone is happy with the new App Store system. The iPhone, to the consternation of some developers, is still not completely "open" to outside apps—at least not in the way your desktop machine is. Apple takes a cut of every app sold, for example, and imposes its own user-interface guidelines and technical limitations that some say are meant to stifle competition.
But the doors may have been opened just far enough to change everything. Since the store launched, iPhone users have streamed 3 million tracks through Pandora, and Westergren says they're listening for an average of nearly an hour a day. It's been up for less than a week, and the iPhone App Store has already killed Top 40 radio. What's next?