The iPhone is a turning point in the industry, not so much for its popularity or features. But rather because, as the first popular handheld computer, it has spawned an app ecosystem:

Gone are the days when mobile developers had to negotiate with major telecommunications companies if they had any hopes of publishing their applications on a mobile phone.

“It took six to nine months to build a relationship with a carrier, maybe a quarter-million to get the infrastructure built, and the company took 50 percent or more from each dollar,” marketing executive Peter] Farago says, a process that limited access to mobile platforms. “Apple has helped create a much healthier middle class of developers and expanded the pie for everyone.”

Apple pockets 30 percent of the revenue earned by any App Store program, with developers keeping the balance. Although barriers to entry for software developers have dropped considerably, Mr. Farago acknowledges that “friction points have changed.”

Developers now cite instances in which applications have been held in approval limbo, neither accepted nor rejected for months. And as bigger companies begin churning out programs, the smaller, garage-size outfits worry that they will be squeezed out.

RELATED: David Pogue credits “the App Store Effect” for bringing down the price of Apple software. Business Week has also been very interested in the App Store. See here, here, and here.