Apple's App Store opens new world for programmers

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BY RAYMUND FLANDEZ / The Wall Street Journal

Modality Inc.’s big break came calling via mobile phone.

Right after Apple announced in March that it would allow software developers to build applications for its new iPhone 3G, Modality got busy.

On July 11, when Apple launched the phone and the Apple App Store to hawk those applications, Modality’s product — digital medical terminology flashcards — was among the available downloads.

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Apple's App Store creates a new venue for businesses trying to get products on the market. (Screen shot)

Apple's App Store creates a new venue for businesses trying to get products on the market. (Screen shot)

One taker was Jeff Midgley, a physician assistant at the Yale New Haven Hospital in New Haven, Conn. He says he wanted something in his pocket that he could show to patients when they ask him about a sprain or fracture. Rather than showing them an X-ray, he can call up the cards on his iPhone and zoom in on the bone in the correct anatomical position.

“It’s a little expensive,” Midgley says, referring to the $39.99 he paid to download the application, called Netter’s Anatomy. “But I’m going to give it a shot, instead of lugging 1,200 flash cards around.”

Apple says about 25,000 software developers have tried their hands at creating applications that can be downloaded onto both the iPhone and iPod — all trying to jump on the bandwagon of the tech gadget of the moment.

It’s too soon to gauge whether any of these applications will prove successful. On the one hand, the Apple App Store, which can be accessed through iTunes, provides a captive consumer group — many of whom already are inclined to buy an Apple-approved application.

But software developers don’t have a say in where their applications are displayed in the App Store. So products can easily get lost in the myriad applications if they don’t offer features and functions that catch consumers’ attention.

“It’s “a powerful business model,” says Allen Kupetz, executive in residence at the Crummer Graduate School of Business at Rollins College in Winter Park, Fla. “Very low cost of doing business, and very high margins. That’s kind of the sweet spot for any business.”

A software-development kit is available free from Apple’s Web site. There also is a $99 version, which includes technical support from Apple.

Greg Joswiak, vice president of worldwide iPod and iPhone product marketing at Apple, says developers are responsible for quality assurance, but Apple does review the application before putting it on the App Store.

“We don’t want any misbehaving applications,” he says, such as ones containing viruses or pornography.

Modality, a 12-employee company, has been turning print titles into digital reference guides since 2006, selling the programs on its own site, Raybook.com. Titles include CliffsNotes, Betty Crocker cookbooks, Brain Quest and Mr. Boston: Official Bartender’s and Party Guide.

Modality declined to give sales figures for its digital guides. But the company is now betting it will get a big boost in sales from the Apple App Store.

“We were clearly interested in extending our business model to this device and were excited about the opportunities for further interactivity,” says S. Mark Williams, Modality’s chief executive. He says he has yet to receive any download and sales numbers from Apple.