Apple's App Store vital to iPhone success, say analysts

'Well-oiled' online mart needed to make the iPhone a platform, not just a phone

"I think the App Store has the potential to get to that middle number [US$777 in revenues]," said McGuire, "but it's not all about the App Store numbers." Rather, he said, it's as much about the value that the App Store provides iPhone owners, or even more specifically, what iPhone owners perceive as its value.

Howe, meanwhile, compared Munster's most aggressive projection to what Apple currently makes on sales of non-operating system software. "Apple has a [US]$1.5 billion software business, which is about 4 per cent of its revenues. App Store lets them add to that number without actually developing the software themselves."

If Apple can, with the App Store's help, push software sales to the 5 per cent mark when it's a US$50 billion company, it'll be happy, he added.

"The App Store may not be crucial to the success of the iPhone," Howe said. "I think a better word there is'important.' But it is crucial to the success of the iPhone as a platform."

McGuire agreed, but put the App Store's importance to the iPhone-as-platform idea in a different light. "Developers are asking themselves,'Which do I develop for? Android, Nokia, iPhone?' But if Apple is able to create the well-oiled App Store, that may be one of those decision points for developers."

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