Apple Opens the App Store

Apple opened the iPhone App Store on July 10, 2008 alongside iPhone OS 2.0, launching with approximately 500 applications — roughly 200 free and 300 paid — after Apple had announced the iPhone SDK (Software Development Kit) on March 6, 2008. The announcement reversed Steve Jobs’s original iPhone software strategy: at iPhone’s launch on January 9, 2007, Jobs had said the way to deliver third-party applications on iPhone was through web apps accessed in Safari, stating “the full Safari engine is inside of iPhone, and it runs on the Objective-C run-time, so you can write amazing Web 2.0 and Ajax apps.” Developer community pressure and the commercial opportunity of a native application platform led Apple to reverse course; the SDK was announced eight months after the original iPhone launch. The iPhone OS 2.0 SDK required Xcode (Mac only) and used Objective-C with Apple’s UIKit framework — the same framework used for Apple’s own iPhone applications — giving third-party developers access to the same UI components, animation APIs, multitouch gesture recognizers, and hardware interfaces (camera, accelerometer, GPS, Bluetooth) that Apple’s own engineers used. Apple provided code signing certificates through its iPhone Developer Program ($99/year for individuals, $299/year for enterprise), and all App Store applications had to pass Apple’s review process before being listed — the first time a mobile platform had implemented systematic pre-distribution review of applications.

The App Store’s commercial structure defined the modern app market. Apple took 30 percent of every paid app purchase and in-app purchase, with developers keeping 70 percent — a split that became the industry standard after Android Market (launched October 22, 2008) adopted the same ratio. Free apps were distributed without revenue sharing. Payment processing, tax collection, fraud prevention, and refunds were all handled by Apple, eliminating the infrastructure burden that had made software distribution expensive for small developers previously. A developer in a single country could immediately offer their app for sale in dozens of countries simultaneously through Apple’s storefront in each App Store region. In the first year, Apple reported 1 billion App Store downloads by April 2009, with $1 billion in total developer payments. The leading revenue categories in the first year were games (Super Monkey Ball at launch, then apps like Tap Tap Revenge, Trism, and iShoot), productivity tools, and reference applications. The App Store also provided discovery infrastructure through category browsing, search, ratings and reviews, and editorial featuring — replacing the carrier-controlled deck (the small menu of applications wireless carriers had historically curated and taken large revenue cuts from on feature phones) with a system that scaled to hundreds of thousands of applications by the end of 2008.

The sandboxed application model Apple implemented was more restrictive than desktop application distribution but more secure than the model it replaced. Each iPhone application ran in its own sandboxed container with access only to its own data directory and explicitly granted system resources — it could not read files from another application’s sandbox, could not access contacts without permission, and could not run background processes except through explicitly defined modes (audio playback, location updates, VoIP). Distribution as signed packages through a centrally reviewed channel meant users could trust that installed applications had been examined by Apple for malware and policy compliance, though the review process was criticized for inconsistency and for rejecting applications for vague or changing policy reasons. Android Market took the opposite approach — allowing sideloading and requiring users to grant permissions at install time rather than undergoing pre-distribution review — providing greater developer freedom at the cost of more malware exposure. Apple’s App Store model was subsequently adopted or adapted by every major platform: Google Play (Android), Steam (PC games, 2003 but expanded dramatically after App Store’s success), Windows Store (Windows 8, 2012), PlayStation Store, Xbox Marketplace, and eventually the Mac App Store (December 2010) brought the single-storefront review-and-revenue-share model to platforms that had previously used traditional software distribution. The 70/30 revenue split became a central issue in platform regulation: Epic Games’ August 2020 challenge to both Apple and Google’s 30 percent take, and subsequent litigation and legislative activity in multiple jurisdictions, traced directly to the commercial structure Apple established when the App Store opened in July 2008.