July 10, 2008: Apple launches the App Store, an online hub that lets iPhone owners browse and download apps made by third-party developers.
Transforming the iPhone from a locked-down platform to a generative one, the App Store means that every iPhone user can have his or her own “killer app” depending on the software they want — from social networking to composing music to playing games.
It’s one of the most significant launches in Apple history, and opens up a whole new revenue stream for Apple. It’s hard to believe that Steve Jobs was originally dead set against it!
Refusal to launch
Apple had already proven its store for paid downloads concept five years before the App Store launched, courtesy of iTunes. Launched in 2003, by 2008 iTunes was already well on its way to becoming the largest music vendor worldwide.
A software-based version of iTunes therefore made all the sense in the world. It wouldn’t even require Apple to broker deals with giant companies, because developers would submit their apps to Apple, rather than Apple having to persuade entertainment industry titans to take a gamble on a new way of selling their product.
For a while, the idiosyncratic Steve Jobs refused, though. His main fear was that allowing third-party apps on the iPhone risked watering down Apple’s level of control. Part of this was the potential security threat of third-party apps, but part of it was just that he hated the idea of poorly-designed software on his beautiful new creation.
However, others inside Apple — particularly Phil Schiller and Apple board member Art Levinson — saw the potential of the App Store, and lobbied for Jobs to change his position. Eventually they were successful and, in March 2008, Apple announced the start of what became the iPhone Developer Program.
Developers who wanted to launch apps on the iPhone had to pay a standard $99 annual fee. (A higher-priced enterprise tier was initially available only to companies with more than 500 employees.) Developers received 70 percent of the sales revenue from their apps — with Cupertino taking the other 30 percent.
By the time the App Store opened on July 10, 2008, 500 third-party apps were available, with 25 percent of them being free to download. It was an immediate success for Apple, garnering a massive 10 million downloads in its first few 72 hours.
Developers who were ready to jump on the App Store train from day one were richly rewarded for it. For example, a 28-year-old programmer named Steve Demeter created a sliding blocks puzzle game called Trism, which made use of the iPhone’s accelerometer. Selling Trism for $5, within the first two months of the App Store he made $250,000.
A few months later, Demeter’s story was trumped when another indie developer, Ethan Nicholas, earned $600,000 in one month with his tank artillery app, iShoot (sadly now vanished from the App Store.)
The odds of succeeding decreased as more and more apps were added to the App Store, but the growing number of iPhone (and later iPad) users meant that the App Store was a whole new way for developers to make a living.
Strength to strength
Since its launch, the App Store has gone from strength to strength. By September 2008, it had received 100 million downloads, and 1 billion by April 2009. Here in 2017, we can pick from around 2.2 million apps, which have been downloaded an astonishing 180 billion times.
Today, the idea of an App Store is no longer an Apple only offering. Thanks to a July 2011 court case with Amazon, Apple lost proprietary use over the term “App Store” — opening up the possibility of other rival services calling their own app stores by the phrase Apple had helped popularize.
Nonetheless, Apple’s App Store continues to be ridiculously profitable for the company — and a major selling point for Apple users. No wonder co-founder Steve Wozniak has called it Apple’s most important invention— which, for a company that made the Apple II, Mac, iPod, iPhone and far more, is high praise indeed.