Apple's plan to pave the planet with iPhones seems to be on schedule. The Cupertino, Calif.-based gadget maker sold 1 million of the latest version of its media-friendly smart phone during the first weekend of sales last month and seems on track to sell many millions more before the year is done.

But the new phone's most talked-about feature--the ability to download third-party applications that can turn the device into everything from a flashlight to a game platform--is also giving Apple's minions fits. On Wednesday, the company yanked a jokey $999 application dubbed "I Am Rich."

That application wasn't the first to vanish from Apple's App Store. Last week, both BoxOffice, an app that carries movie listings and sells tickets, and NetShare, an app that turns the iPhone into a wireless modem, were removed from the store, which is part of iTunes.

To be sure, Apple offers more than 1,000 applications from independent developers, with more popping up every day. The App Store allows users to select and download software from hundreds of independent developers to their iPhone with the touch of a button. The catch: Apple must approve which applications make it into the store, in addition to taking a cut of any sales.

However, the vetting doesn't stop there, apparently. Of the three applications that have disappeared from the store, NetShare is perhaps the most obvious target. It turns the iPhone into a wireless modem, making the device an alternative to the lucrative wireless-data services that iPhone carrier AT&T hawks.

"We're working with Apple to get NetShare back up on the App Store," NetShare developer Nullriver said in a statement posted to its Web site Monday.

Such snafus could create an opening for handset giant Nokia. While the Espoo, Finland-based company dominates the worldwide smart phone market, it commands just a thin slice of the U.S. market, trailing Research in Motion, Apple and Palm. That's partly because Nokia has made it easy to download all sorts of applications for its smart phones, industry observers say. Doing so, however, has irked some carriers, which have decided not to subsidize sales of some of Nokia's most popular models.

The iPhone, however, could change that. "They've raised awareness in the marketplace about what smart phones can do," says Victor Brilon, senior manager for technology collaboration for Nokia's NSeries of smart phones. But, unlike Apple, Nokia pushes handsets, such as the $533 N95, that aren't tied to carrier subsidies and are free of any restrictions on the kinds of applications carriers can build for the phone.

As a result, many of the applications go well beyond the sorts of freedoms afforded to iPhone users. For example, while Apple has pulled an application that turns the iPhone into a wireless modem, software maker Joikusoft takes that idea further. It turns a phone into a wireless hot spot able to share a high-speed wireless data connection with a roomful of computers.

And while it's hard to imagine a U.S. carrier getting terribly comfortable with such an application, the success of Apple's iPhone may persuade carriers to start subsidizing sales of more handsets able to pull off such tricks. "All roads lead to Apple," says Jim Zemlin, executive director of the Linux Foundation. "People don't like that situation." Least of all any carriers not selling iPhones right now.

Source:forbes.com