New iPhone has App Developers Seeing Gold

By: From CNN
By: From CNN

NEW YORK CITY - Friday's launch of the iPhone 3GS could usher in an innovative and lucrative new era for those who create applications for the popular device, developers and industry observers say.

The phone's upgraded hardware, combined with a new operating system, will allow developers to design apps that wouldn't have worked on previous models of the iPhone.

For example, developers said, the iPhone 3GS is the first iPhone with a video camera, which could inspire apps that edit or mix video clips. Other developers are eyeing the new phone's built-in compass or its "push notification" feature, which pings users with messages even if its instant-message application is not open.

"Apple has given us all these new tools," said William Kasel, founder and CEO of Jumpfox, a San Francisco, California-based company that makes mobile apps. "And I can't wait to see what developers come out with in the next six months. The new features really take [the phone] to a whole new level."

Apple fans in the United States and seven other countries lined up Friday morning to be among the first to get their hands on the new iPhone 3GS, billed as the fastest, most feature-laden iPhone yet. iReport: Buying an iPhone 3GS?

Lines outside Apple's 211 retail stores in the United States were generally shorter than for last July's debut of the iPhone 3G, probably because owners of that phone balked at paying upgrade fees to wireless carrier AT&T or could simply update their devices by downloading the iPhone's new 3.0 operating system.

The buying process also seemed smoother than last summer's iPhone launch, which was marred by slow-moving lines and a flood of customers trying to activate their phones at once. According to reports on Twitter, many iPhone 3GS buyers were able to activate their phones faster and more smoothly than last year.

The new iPhone contains a processor that Apple claims is more than twice as fast as its 3G model, plus a video camera, voice control, longer battery life and a built-in compass. It comes with an upgraded operating system -- which Apple released Wednesday for download onto older iPhones -- with 100 new functions, including the ability to copy and paste text.

But the phone's biggest game-changer, observers say, may be new software that allows iPhone users to make purchases within applications.

On previous versions of the iPhone, applications linked users to Web sites where they could buy consumer goods or other items. With the new iPhone 3.0 operating system, users can shop entirely within apps designed specially for the phone, which promises to make for smoother transactions.

App developers love this new function. Until now, they earned money only when people bought applications through Apple's App Store, or from selling ads within the apps themselves. But now, for example, a game developer could charge users a few extra dollars to access higher levels of a video game. Other apps could allow users to locate the nearest movie theater, and then buy tickets.

"It's a whole new revenue stream," said Brian X. Chen, who writes about consumer technology for Chen believes the new feature could help iPhone app developers achieve long-term profits instead of hoping for an App Store "one-hit wonder" that sells well and then disappears.

"This could be absolutely huge for a lot of people," agreed MG Siegler, who writes for TechCrunch, a popular technology blog. "There's a lot of money to be made there, I think."

Siegler believes another bonus of the iPhone 3GS's new software is its ability to interact with special accessories via Bluetooth and the phone's dock connector. To cite one example that Apple showcased at a recent 3.0 event, a diabetes app could hook up with an insulin meter, allowing a diabetes patient to check his or her glucose levels.

Developers already are customizing apps for the new iPhone. Jumpfox is hoping to launch BuzzBuy, its PayPal-like e-commerce widget, as an iPhone 3GS app this summer. And ScrollMotion plans to introduce an upgraded version of its Iceberg reader, which will allow iPhone users to download more than 50 magazines, 170 newspapers and 1 million books to their devices for reading on the go.

"We love the new 3.0 functionality," said Josh Koppel, a ScrollMotion co-founder, who also believes the phone's copy-and-paste feature will help students and other readers get more use from the Iceberg app. "A new way to monetize on this magical device ... is the best thing we could have asked for."

The popular phone went on sale Friday in the U.S. and Canada plus six European countries: France, Germany, Italy, Spain, Switzerland and the United Kingdom.

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