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IPhone Store Takes Off; Will Android Pay The Price?

imageApple (NSDQ: AAPL) has not only been successful at selling millions of iPhones, but its application storefront has been a runaway hit, too. That could complicate life for Google’s Android, which is just now coming to market, as developers become too preoccupied with Apple to focus on another new platform.

Launched in July, the iPhone App store is available in 60 countries, and is stocked with about 8,000 games, social networking sites, and other reference tools. The number of apps is rapidly rising, jumping by 45 percent in the past month. Downloads aren’t too shabby either. In the first 100 days, users downloaded 200 million applications, some of them free, some for a fee. At that rate, Apple is likely to hit 1 billion in the first year—an accomplishment that took iTunes five years to achieve online. At a press briefing on Wednesday, Apple invited developers to showcase a number of the applications they’ll be launching in time for the holidays. In attendance was EA, which showed off the new game “Need for Speed,” Gameloft (EPA: GFT), which demonstrated “Ferrari GT Evolution,” an ad agency which created promotional apps for both Gap and Target, and also Handmark, ngmoco and Loopt. In conversations with the developers, what surprised me the most was the dedication that they had to the iPhone. In fact, many of them were so focused on the platform, they said it was unlikely that they would develop for any new platforms, and specifically Google’s Android…

It may be partly due to the economy—if a company has limited resources, logically it may be more selective about which platform it develops for. To be sure, this may have been a biased crowd, but it’s worth asking the question: Will developers stick to the iPhone because they know it works, and hold-off developing for Android, which may present a risk? Or will Google (NSDQ: GOOG) also have a chance at success? I asked Google’s Group Manager of Mobile Rich Miner if this was a threat. Miner’s response: “I’m not worried.” He prefaced that with a few facts: Android has only been out for a few weeks, developers won’t be able to charge for applications until the New Year, and the phone is limited to one model, which is only being sold by T-Mobile USA and T-Mobile International.

But so far, it doesn’t seem that a big advocate is emerging on Android’s behalf, much like happened early on for Apple. The day the App store was announced, Kleiner Perkins Caufield & Byers, said it was setting aside $100 million to invest in companies focused on the iPhone. One of the VC’s first investments was in ngmoco, which was present at the event, and headed by fomer EA exec Neil Young. Young said so far, the company has launched two games, which have been downloaded 1.5 million times, and played for a total of 7 million sessions. They will launch five more games in time for the holidays, including one he demonstrated last week. Called Rolando (and pictured above), Young calls it the first premium game to launch on the iPhone, which would be comparable to a game launched on the Nintendo DS and Sony (NYSE: SNE) PSS, and cost $34.99. “This is the first of that class to appear on one of these device, and it will cost $9.99,” he said. When asked if the price was lower because he thought the volume would be higher, he said not necessarily. “It’s a different market. You can’t look at it as an established market, where you know price elasticity.” He figures they’ll do all they can to make Apple successful because if they do well, so will ngmoco. “We are trying to make sure that the market grows because what we want to do we can’t do on any other devices.” Other titles launching soon include: PhotoBoxer, which allows people to fight pictures of people from their photo album, and Topple Too, a sequel. Another nine games will be launched in January and February. Young: “We want to help make the iPhone the best gaming platform it can be.”

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Nov 22, 2008 2:47 AM ET

Posted In: Entertainment, Gaming, Technologies / Formats, Operating Systems, Companies, Apple, AT&T, Electronic Arts , EAMobile, Google, T-Mobile

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