The Apps Battle Heats Up

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RIM co-CEO Lazaridis is set to open App World on Apr. 1. Norm Betts/Bloomberg News

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voracious consumers

Still, it will be difficult for any company to match Apple's momentum in mobile software. The company's App Store has grown into a sprawling bazaar of software, with 25,000 apps for everything from calculating tips at restaurants to monitoring your blood pressure. Developers have flocked to Apple in part because its customers are far and away the most voracious consumers of mobile software. The average iPhone owner has downloaded more than 20 applications, several times that of competing phones.

Apple is trying to build on its lead with a software upgrade called iPhone OS 3.0. On Mar. 17, Apple revealed new capabilities that developers can build into their programs. For the first time, iPhone owners will be able to cut and paste text and pictures, as they do on PCs. The company added peer-to-peer networking that makes it dead simple for people within a few feet of each other to trade contacts or music wirelessly. And while business people are used to the "push" technology that allows e-mail to pop up on a BlackBerry in real time, Apple has extended the technology so any application can deliver relevant information in minutes. One iPhone app from Oracle (ORCL) delivers an alert to salespeople if inventories run low, so they can push alternatives on their rounds.

Apple also unveiled new ways for developers to make money, including subscription pricing. Many developers say Apple's real edge is in providing the tools to help them build cool, innovative programs. Oracle offers its software for both the iPhone and the BlackBerry. But Mark Woolen, an Oracle vice-president, says the Apple approach provides a smoother experience for users. "It's just very, very elegant," he says.

The competition among Apple, RIM, and other rivals is likely to fuel innovation on all mobile phones. Microsoft plans to offer Windows Mobile phones that work more easily with Windows PCs. Nokia, the world's largest mobile-phone maker, is taking a creative approach with its Ovi Store, scheduled to open in May. Rather than just listing available apps, each consumer will be offered content based on personal tastes, location, and friends' recommendations. "No two users will get the same lineup of content," says George Linardos, a Nokia vice-president.

Still, some developers say the sheer number of competitors gunning for Apple may actually work to the company's advantage. Without a clear No. 2, many developers say they'll focus on the proven Apple market. "The distance between Apple and the others is huge," says Satoshi Nakajima, president of a photo-editing startup called Big Canvas. "We don't have time to look at other platforms seriously."

Jana is the Innovation Dept. editor for BusinessWeek. Burrows is a senior writer for BusinessWeek, based in Silicon Valley.