ONLINE REVOLUTIONARY:Apple has struck gold with its iTunes-hosted App Store, allowing iPhone users cheap and easy access to software while increasing revenues through commissions on third-party sellers The first six months of business has seen 15,000 applications created, with more than 250 added every day, and more than half a billion downloads.

NEVER KNOWN as a company to hides its light under a bushel, Apple signs off its press releases with the following line: "Apple ignited the personal computer revolution in the 1970s with the Apple II and reinvented the personal computer in the 1980s with the Macintosh." On the back of the success of the iPhone 3G, which sold over 10 million units in 2008, Apple has reinvented the software industry in the noughties with its App Store, the area of the iTunes Store where third parties can sell their software applications (apps) for the phone.

Introduced in July of 2008, the first six months of business has seen 15,000 apps created, with more than 250 added every day, and more than half a billion downloads, which may have generated revenues of up to $100 million.

Sceptics said the venture would never succeed - it's unheard of for the owner of a platform to demand 30 per cent of revenues generated by a third party selling software.

In the history of the computer industry, Microsoft has been the master at creating what it calls the Windows "ecosystem" - the hundreds of thousands of software developers around the world who create programs that run on their system. While Microsoft encourages these individuals and companies to become certified and join its formal partner programmes, there are no restrictions on who can develop for Windows and what they can release.

Microsoft does not look for a flat percentage of all their revenues - in fact, it will often provide its partners with marketing dollars to help them sell their products as it believes sales of software that runs on Windows helps overall sales of the operating system.

Apple has kept things simple with its iPhone Developer Programme. The SDK (software development kit) you need to develop and debug apps is downloaded free. To distribute through iTunes you pay $99 to join the standard programme or $299 for the enterprise one.

But none of this explains the frenzy that has built up around iPhone apps.

"I never would have predicted the success," says Pat Phelan, a well-known blogger on the mobile industry and chief executive of Cubic Telecom. While admitting to being a "Nokia guy since the year dot", Phelan now uses an iPhone and believes the success of the phone and apps for it is down to ease of use.

"They are just so easy to download and play with - what's a quid between friends?" he asks, referring to the low cost of the software, which often retails for as little as €0.79. Phelan spends about €10 a week on iPhone software, estimating his total investment at about €500.

Phelan also points out that the App Store has changed the economic model for independent programmers. "In the past, they could write the code for a website and get €2,000," says Phelan. "Now there are guys who went away, learned how to do this and are pulling in €100,000 a week in their bedroom."

"An awful lot of developers had no route to market before the App Store came along," says Conor O'Neill, software industry veteran and managing director of online review site LouderVoice. He cites the case of Steven Troughton-Smith, a 20-year-old Irish student who has sold thousands of copies of his iPhone applications. In the first six days it was available, Speed, an application that shows how fast you're travelling, was downloaded 36,000 times. The application was free at that time, but now sells for €0.79.

"If someone like that had tried to set up on any other platform, no one would have taken him seriously," says O'Neill.

But app development is no cottage industry. Legendary Silicon Valley venture-capital firm Kleiner Perkins Caufield & Byers (which has backed Amazon, Google and Compaq in its day) has a $100 million fund to back app developers, while US university Stanford has an iPhone Application Programming course.

While the skills needed to write an iPhone app are not trivial and specialist iPhone development companies will charge up to €50,000 to create a fairly rich piece of software, finding and installing them is simplicity itself. The App Store is accessed through Apple's free iTunes software. Apps are purchased the same way as a piece of music. The next time you connect your iPhone or iPod Touch to your PC, the software is automatically installed.

Although there is plenty of software out there that runs on Nokia's platform, installing it is nowhere near as easy and there is no single repository where it can all be browsed. Google has taken note and launched the Android Market, a version of the App Store for programs that have been written to run on phones running its Android operating system.

O'Neill is developing a mobile review application for Android Phones and concedes that Google's version of the App Store is just "not as slick" as the original. "That said, Android is going to be huge," he says, and it is for this reason LouderVoice is developing for it rather than the iPhone. However, he says, if the Android version is well-received, LouderVoice is likely to release a version for the iPhone.

As well as taking a cut of revenues, Apple employs a strict vetting policy before software is included in the online store. In typical Apple style, the company doesn't discuss its admission policies and has been criticised for not giving enough information about what is and isn't allowable. Adult content is a serious no-no, much to the chagrin of the porn industry, while telecoms software applications, which may affect the revenues of mobile operators that have signed exclusive contracts to sell the iPhone in their country, also find it difficult to get included.

At Macworld (the annual Apple-fest) in San Francisco last month, FreedomVoice Systems, makers of an application which gives you a second "virtual" phoneline on your iPhone, were passing around a well-supported petition calling on Apple to provide more clarity on its policies and provide more detailed feedback to developers who have submitted applications.

While Apple applies quality control to what's included, a blogger at Fortune magazine recently estimated about 11 per cent of the half a billion downloads are trivial or gimmicky programmes. Sound Grenade, currently one of the top five free apps globally, illustrates the point. The work of a 22-year-old anonymous programmer who works for an iPhone app development company, it was a project to see if a bestseller could be written and uploaded in less than an hour. All it does is play an annoying high-pitched sound and is pitched as a way to get attention at a noisy gathering. Another bestseller at the end of last year was iFart, whose name tells you all you need to know about it.

Despite the criticisms, Apple has shown the way with the App Store, although questions remain as to how much real money is being generated. Things will become really interesting when competitors like Google and Nokia take its main innovations and apply them to their own platforms.