My bet is they have a few “launch titles” ready for to announce at the launch of the next iphone; probably ones that will be built around some of the hardware features. Games will probably drive it initially but productivity will come next.

I still agree with your point though; the core value to Apple for even these higher cost apps will be selling hardware; while the revenue from the apps won't be insignificant it will still be relatively small compared to the hardware margins.

Once people have spent a real amount of money on apps or invested time into them – this will be probably the biggest decider as to whether they buy the next iphone or jump ship to the latest Nokia phone. Once people have a collection of apps there will be considerable costs associated in moving platform – in exactly the same way there are significant costs for consumers or enterprises to move from Windows to Mac. I can already see myself buying the next iphone, even if the next Nokia is 'better' (which I think quite likely) because of software collection.

Apple tried this with the Ipod (which is one of the reasons I am sure they were quite happy with the music companies forcing them to encrpyt tracks). The biggest threat to Apple's model here will be tools that make it easy to move apps from one platform to another, and prevent you having to re-license content. I expect Apple to fight anything that enables that very hard.

In the future I am sure Apple will look to increase revenue generation from the App Store once $20+ applications start being developed. It will be interesting to see the success of the Slingbox app and whether other developers committ budgets to make higher value applications. Once they do, the revenues apple get could increase significantly.

Cnet/Munster reported that Apple make $565 unit profit (before fixed costs) over a 2 year period per iphone. That equates to close to $24 a month, so would require $80/month in software sales alone to match – and that assumes the app store has no costs which is clearly not the case.

So yes, it's about shipping hardware.

My bet is they have a few “launch titles” ready for to announce at the launch of the next iphone; probably ones that will be built around some of the hardware features. Games will probably drive it initially but productivity will come next.

I still agree with your point though; the core value to Apple for even these higher cost apps will be selling hardware; while the revenue from the apps won't be insignificant it will still be relatively small compared to the hardware margins.

Once people have spent a real amount of money on apps or invested time into them – this will be probably the biggest decider as to whether they buy the next iphone or jump ship to the latest Nokia phone. Once people have a collection of apps there will be considerable costs associated in moving platform – in exactly the same way there are significant costs for consumers or enterprises to move from Windows to Mac. I can already see myself buying the next iphone, even if the next Nokia is 'better' (which I think quite likely) because of software collection.

Apple tried this with the Ipod (which is one of the reasons I am sure they were quite happy with the music companies forcing them to encrpyt tracks). The biggest threat to Apple's model here will be tools that make it easy to move apps from one platform to another, and prevent you having to re-license content. I expect Apple to fight anything that enables that very hard.

In the future I am sure Apple will look to increase revenue generation from the App Store once $20+ applications start being developed. It will be interesting to see the success of the Slingbox app and whether other developers committ budgets to make higher value applications. Once they do, the revenues apple get could increase significantly.

Cnet/Munster reported that Apple make $565 unit profit (before fixed costs) over a 2 year period per iphone. That equates to close to $24 a month, so would require $80/month in software sales alone to match – and that assumes the app store has no costs which is clearly not the case.

So yes, it's about shipping hardware.

Once people have spent a real amount of money on apps or invested time into them – this will be probably the biggest decider as to whether they buy the next iphone or jump ship to the latest Nokia phone. Once people have a collection of apps there will be considerable costs associated in moving platform – in exactly the same way there are significant costs for consumers or enterprises to move from Windows to Mac. I can already see myself buying the next iphone, even if the next Nokia is 'better' (which I think quite likely) because of software collection.

Apple tried this with the Ipod (which is one of the reasons I am sure they were quite happy with the music companies forcing them to encrpyt tracks). The biggest threat to Apple's model here will be tools that make it easy to move apps from one platform to another, and prevent you having to re-license content. I expect Apple to fight anything that enables that very hard.

In the future I am sure Apple will look to increase revenue generation from the App Store once $20+ applications start being developed. It will be interesting to see the success of the Slingbox app and whether other developers committ budgets to make higher value applications. Once they do, the revenues apple get could increase significantly.

Cnet/Munster reported that Apple make $565 unit profit (before fixed costs) over a 2 year period per iphone. That equates to close to $24 a month, so would require $80/month in software sales alone to match – and that assumes the app store has no costs which is clearly not the case.

So yes, it's about shipping hardware.