The iPhone application store is a business model game changer. It is the first time that an entire cottage industry has been built around a smart phone, ensuring the phone will never become obsolete and that the customer will never get bored.

Think about it. Until the iPhone and app store, when you bought a smart phone you were limited to the number of programs you could download. Certainly Microsoft and Palm offer a fine selection of downloads, but neither can match the feel of an app store so deep and wide with so very many categories of applications, not to mention so many being free of charge.

The application store model allows smart and clever start ups to build exciting applications for iPhone users, creating a win-win that rivals anything yet done by Canada's top carriers such as Rogers and Telus, and US carriers such at Verizon and ATT. Verizon's "Get it Now" application, for example, simply cannot compete with the app store. It isn't as easy to navigate and it offers only a fraction of the applications.

When one considers just how much of an impact iTunes has had on downloading music, it is easy to see how quickly an application store dedicated entirely to a single device could play an enormous role in consumer decision making when it comes time for a new device.

Another strength of the app store is that it does not nickel and dime you, as has so often been the case in the past. The old business model charged for EVERYTHING, but the app store offers many free and meaningful selections. This, again, is very similar to iTunes, where they offer many free podcasts, free song of the week, etc.

Apple has changed the game again by building an application department store for the iPhone. It brings new meaning to "value-added" and will pose still more challenges for other manufacturers as the smart phone market continues to gather new users.