iPhone update ahead, App Store going great guns

At an event in San Francisco on Tuesday, Apple frontman Steve Jobs unleashed the latest batch of iPhone and iPod updates ahead of the all important holiday shopping season.

On the menu was yet another firmware update for the iPhone 3G, which has suffered from bad press since its launch.

Version 2.1 of the device software, which is available from Friday promises to fix the numerous connectivity glitches which have dogged the device. The same update is already available for the iPod touch and also includes a Genius music playlist feature, improved keyboard support, improved contacts search and new mail management features.

The App Store was also in the spotlight, with Jobs revealing that iPhone and iPod touch users have downloaded more than 100 million applications since the store’s launch on July 11. To date, more than 3,000 applications are available through the App Store, with over 90 per cent priced at less than $10 and more than 600 offered for free.

There was an interesting development earlier this week, when Vodafone said Apple is prepared to meet it part way over branded iPhone apps. Ovum analyst Tony Cripps, reported that Apple may be willing to allow operator specific applications to run on the iPhone.

“At a briefing outlining Vodafone’s handset strategy, Jens Schulte-Bockum, global director of terminals for Vodafone Group, told analysts that Vodafone Italy is already experimenting with Apple to deliver a Vodafone-branded “portal experience” via its App Store. Other applications for other Vodafone operating companies could follow,” Cripps said.

While such a move would go at least someway towards addressing operator concerns over Apple’s walled garden approach, it appears unlikely that the iPhone vendor will allow operator applications that compete with its own.

Cripps believes that in reality, it would be unrealistic to expect Apple to back down completely to operator demands to make the iPhone a fully open platform for their own services. “Right now most operators, Vodafone included, are grateful to have the iPhone for the halo effect it brings to mobile data and web access in particular.

“But as iPhone numbers on operator networks grow this is sure to become a greater issue. Apple’s strict terms and conditions will start to erode the margin on operators’ own content services in meaningful amounts. This will lead them to make judgements as to whether they are happy to assist Apple in its goals long term or whether they should really look after number one,” he said.

At Tuesday’s event, Jobs also put paid to rumours of ailing health, which have recently unsettled the investor community. A recent survey by analysts at RBC Capital Markets found that of the 3,600 polled, 18 per cent would be less likely to buy Apple if Jobs was no longer CEO. RBC said that Jobs remains Apple’s greatest asset – and its greatest investor risk.