By itself, the Apple iPhone is an impressive piece of engineering, a sleek touchscreen device that has largely redefined the smartphone market. But much of the popularity of the iPhone can be traced to Apple's App Store, where iPhone and iPod touch users can obtain an estimated 27,000 applications.

According to analyst estimates (Apple doesn't release specific figures), the App Store is poised to become a billion-dollar business this year. That's a whole lot of 99-cent downloads. But despite the evident financial success of the store, Apple will have to move aggressively to solve some problems.

The Gated Community

Perhaps the biggest challenge is the perpetual backlog in app approvals. Apple maintains tight control over the apps it offers for sale, but the review process can often take weeks, frustrating both developers and end users.

Developers also complain that Apple's standards are overly restrictive. Apps are carefully screened for substandard performance, spyware or potentially offensive content, which makes the iPhone one of the few electronic devices not widely exploited by the adult industry. However, Apple's strict guidelines are blamed for limiting innovation and access to new features like video and Bluetooth.

Adding to developer irritation is the fact that many developer contracts are near expiration and new applications have languished without any action by Apple. Taken together, the developments raise questions about whether Apple is devoting enough staff resources to the App Store.

Competing App Stores

The threat posed by developer dissatisfaction is heightened by increased competition in the app market. Over the weekend, Jay Freeman, developer of the jailbreaking tool Cydia, announced the launch of the Cydia Store. Much like the App Store, Freeman's Cydia Store will allow users to purchase and install applications, but the iPhone needs to be jailbroken to run the apps.

Not surprisingly, Apple isn't pleased that Cydia is making it easier to...