App developers race to get ahead of iPad launch

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SAN FRANCISCO — As early enthusiasts begin to line up to get their hands on Apple Inc.’s
latest gadget, application developers are looking to secure a foothold
in the potentially lucrative market opportunity presented by the iPad.

Ahead of the iPad’s market launch on Saturday, Apple
has said “well over” 1,000 apps will be available for the device.
Specifically, these are applications that have been specially designed
for the iPad, as opposed to the 150,000-plus apps that are already
available for the company’s iPhone and iPod touch devices, though the
company says most of the latter will still work on the iPad.

A spokeswoman for Apple would not detail the precise
number of iPad apps available. Some Web sites on Friday put the number
at more than 1,300.

Apps are considered key for the success of the iPad.
As a touch-screen tablet computing device, the iPad is geared in
particular toward media-oriented activities such as surfing the
Internet, watching videos and reading. So many of the early apps
prepared for the device are from media providers such as newspapers, TV
networks and game publishers.

“The number of apps may not be so important in the
short term, as the people lining up to buy the iPad now don’t need
convincing,” said Charles Golvin, an analyst for Forrester Research.
“In the long term, however, the value of this device is essentially
going to be a function of that growing ecosystem of applications.”

Expectations for the iPad are high. Many analysts expect sales to easily top more than 1 million units during the June quarter.

The iPad represents a shift for Apple, which
typically looks to take over established markets with cutting edge
devices, the way it did with the iPod and iPhone. By contrast, the
market for tablet-computing products is still relatively small and
untapped.

That said, the iPad will be building on the “ecosystem” that Apple established with both iTunes and the App Store. The company’s iTunes has become a dominant distributor of music, TV shows and movies for Apple devices, while the App Store
has helped keep the iPhone on top of the smart phone sector, providing
a marketplace for applications that rivals haven’t been able to match.

In addition, the iPad has the benefit of launching with the App Store fully in place. The store was not available until early 2008 — months after the launch of the first iPhone.

“We can’t overstate the importance of this distinction,” Bill Shope of Credit Suisse
wrote in a report last week. “This limits the period of
‘evangelization’ for the iPad, and it provides users with instant
content and functionality.”

Shope said that with the ecosystem already in place,
the total addressable market of the iPad “can potentially grow far
faster than most currently anticipate.”

For that reason, application developers are lining up fast, and they include some big names. Companies such as the New York Times Co., eBay Inc., Yahoo Inc. and Netflix Inc. all have developed apps for the iPad that will be available at the launch.

What’s unclear is whether developers will be able to
land a premium for their iPad wares. Most of the paid apps for the
device are being priced higher than their counterparts made for the
smaller iPhone.

Video-game publisher Electronic Arts Inc., for example, is charging $14.99 for its “Need for Speed Shift” game for the iPad, compared with $6.99 for the same game over the iPhone. ESPN is asking for $4.99 for its ScoreCenter app for the iPad, while the same app is free over the iPhone.

Golvin of Forrester
said the iPad has the benefit of launching when the value of apps are
well known, so developers may be able to succeed with higher prices.
“In early days, it was very critical that so many of the apps were
free. In this known environment,” he added, “I think there is a certain
premium that is justified because people already understand what they
want.”

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