Apps are changing the way we relate to our mobile phones. Photograph: Alamy

Easy to use mobile applications of the kind that Apple is pioneering are a huge economic opportunity to generate growth and jobs but also a conundrum. At a time when the whole world of computing is migrating into the “cloud”, with data stored out there on the web rather than on our computer desktops, the mobile world is moving in the opposite direction: nearly all of these games and services are being downloaded on to our mobile devices.

The result is that we are using our apps – and few more so than me – through dedicated silos rather than on the web. This has advantages, not least because data stored on your phone can be accessed more quickly, but also a big downside. This is partly because you are a prisoner of your service provider such as Apple, but mainly because if these apps were made for the web, then every phone would be able to access them, users would have big opportunities to share and developers wouldn’t have to spend money they haven’t got making multiple apps for incompatible phones.

At the moment, if you want to port an iPhone app to devices running Google’s Android operating system, you have to start building again from scratch. Apps would be much cheaper if they could be built to run across different platforms. Tom Hume, managing director of Brighton based FuturePlatforms, points out that Apple developers have to work in the Objective C computer language, whereas the HTML5 standard requires only minor changes between platforms.

FuturePlatforms operates a Google-style “gold card” system, allowing staff time off to do their own things. One developer used this option to produce an unofficial app of the Guardian for phones using Google’s Android operating system which in some ways is more flexible than the iPhone app (eg, it can download the paper during the night).

Make no mistake, something really big is happening with apps as this amazing device we still call a mobile phone extends its tentacles ever deeper into our lives. Today it is games, social networks, reading, search, location-based services; tomorrow health, work, painting, education, who knows what.

The stats are startling. According to technology research company Gartner, physical downloads of apps reached 2.5bn last year. These were overwhelmingly on iPhone and iPod Touch devices. But since iPhones amount to less than 1% of all phones, you don’t have to be a genius to realise the enormous potential. It could be that Gartner’s predictions of 4.5bn downloads this year and an astonishing 21.6bn in 2013, equivalent to more than three for everyone on the planet, will prove an underestimate.

The good – or bad – news, is that a staggering 87% of these downloads will be free for users. That’s great for you and me, but it is not an obvious way to encourage a growing industry to hire people to make up for the black hole caused by the banking collapse. Many of these “free” downloads will be supported by advertising and others will be corporations promoting their brands. But most will be free because creators don’t think they can charge for them.

At the moment, there is a grave distortion in the balance of power. Most of the money is going to the app shops such as Apple – which controls the gateway to the developers, who are often on £60 or more an hour – with the content providers squeezed in the middle of an increasingly crowded market.

I have been talking recently to developers – partly to research this column and partly because I am trying to do an app of my own to see how difficult it is (more of that at a later date, maybe). The overwhelming message is how difficult it is to make enough profit to justify the investment when costs are so high and the market flooded with freebies. Sure there are some who make good money, such as existing branded games being repackaged in mobile form and niche services. The most successful income-earning apps last year – satellite navigation guides at £30 a pop – have been undermined by Google bringing out a free turn-by-turn street navigation option.

Unsurprisingly then, ustwo of Shoreditch – maker of, among other things, mouthoff, an app that enables the phone screen to mimic movements of your mouth, which had mouth-watering publicity here and in the US – couldn’t make a respectable profit at 59p. Indeed, the company admits “the bottom line is that it’s impossible to make money at the 59p price point for 99% of studios”.

Toiluxe, a neat 59p iPhone app that uses satellite signals to tell you where the nearest toilet is in London – whether the Ritz hotel or a public convenience – got publicity in several newspapers but not enough to make a respectable return given that the developer only ends up with only 60% of income after Apple and Vat (levied at higher Irish rates where the servers are based).

The obvious answer is to raise prices, but that is easier said than done in an environment where so much is available for nothing – as newspapers in a different neck of the woods know full well.

It is all quite crazy, really. People who pay more than £2.50 for a cup of coffee that is gone in a few minutes are reluctant to pay £1 for a paper that will last for hours or an app that will be with you for ages, probably with free upgrades. It is also becoming increasingly difficult to find an app among the hundreds of thousands on offer on the iPhone despite the growth of apps helping you to do just this (ie, looking for relevant apps) such as Chomp, or Mplayit on Facebook or Apple’s Genius. There must be hundreds of great apps that hardly anyone has discovered. Goodness knows what it will be like in a few years time.

There is an elephant in the room even though it is invisible at the moment: the bedroom programmer, shorthand for individuals working on their own. The reason is that it is very difficult to write code for a phone in the way that kids could program their BBC or Spectrum computers in the 1980s, a phenomenon that led the same kids to create a thriving computer games industry. Uncle Steve won’t let you near his phones except on his own terms. It may start to change with Google’s Android operating system based on open source, and I know of at least one developer working on an app to enable people to do their own coding on a phone in a (relatively) simple way.

If that happened maybe a new generation of cloud coders could send the apps revolution off in a whole new – and much cheaper – direction. The best things in life are not always free.

twitter.com/vickeegan

• Charles Arthur, technology editor and Richard Wray, communications editor

guardian.co.uk, Thursday 28 January 2010 17.43 GMT

Article history

While Steve Jobs has announced US pricing for the iPad, Apple is keeping the UK prices under wraps untl the launch in March. Photograph: Ryan Anson/AFP/Getty

Apple has surprised would-be buyers of its new iPad touchscreen computer, saying it will not announce UK prices before it launches at the end of March.

Although it announced US prices for all six versions of the touchscreen “tablet” device with and without 3G connectivity at the launch on Wednesday night by Apple’s chief executive Steve Jobs, the UK office said today that there will be no UK prices offered until the launch, expected in 60 days’ time – or 90 days for the 3G versions.

However, the MacWorld magazine website takes an “educated guess” at UK pricing for the iPad, which it predicts will range from £388 to £591 for the Wi-Fi model, and £490 to £693 for the Wi-FI and 3G model.

The iPad is a 9.7in tablet computer with a virtual keyboard which can surf the web, do email, display ebooks and play video. US prices start at $499 for a basic version with Wi-Fi wireless networking but no 3G connectivity, rising to $829 for a 3G version with 64 gigabytes of storage. However iPad users in the US will have to pay separately for 3G data plans being sold separately by Apple’s exclusive mobile partner there, AT&T, which already supplies the iPhone there.

Mobile phone companies in the UK – O2, Orange, T-Mobile and Vodafone – are looking to strike similar deals in Europe ahead of a launch later in the year. The Guardian understands from multiple source that no choice has been made.

Apple initially sold the iPhone through exclusive partners in the US, UK, France and Germany, but for the iPad the British mobile phone networks are not expecting Apple to offer exclusivity. None was willing to comment on the iPad.

Andrew Harrison, UK chief executive of the Carphone Warehouse, Europe’s largest independent mobile phone retailer, commented: “To me, the really interesting thing is what we are seeing is devices designed with how the consumer uses the internet very much in mind, rather than just a computer that was made for business use trying to fit the consumer.”

Bloggers and commentators had mixed reactions to the device. It cannot run Adobe’s Flash software, used by many advertisers and games companies online to create eye-catching motion on web pages, which some see as essential to web browsing. Many women were dismayed by the name: the San Francisco Examiner pointed out that “for North American women the word ‘pad’ means but one thing, a sanitary napkin”. But Nick Carr, author of The Big Switch, about the move towards cloud computing, described the launch as “the day the PC died”, saying that Apple “wants to deliver the killer device for the cloud era, a machine that will define computing’s new age in the way that the Windows PC defined the old age.”

Without a price ahead of the launch it may be difficult for retailers to judge the public’s interest – and so whether the device will sell in large or small numbers. Amazon’s Kindle, which includes mobile networking in the price, only launched recently in the UK, and Amazon has never disclosed sales numbers, though it is reckoned to have sold only about 500,000 to the end of last year.

The decision to keep the UK price under wraps is unusual for Apple, which usually announces UK pricing simultaneously with any launch, and could either indicate concern about exchange rate fluctuations, or a desire to keep people intrigued about the device, or that non-US networks are seeking to sell it with some sort of subsidy.

Already several UK mobile phone companies subsidise the cost of laptops to persuade customers to sign up for long-term mobile broadband contracts. Anyone signing up to a two-year mobile broadband deal with T-Mobile at £40 a month, for instance, gets a free Sony Vaio laptop worth £499.

However, Apple has forced AT&T to give up persuading customers to sign long-term contracts in order to subsidise the iPad; instead, it will effectively be available on what in Europe would be seen as a 30-day rolling Sim-only contract such as those offered by O2 and Vodafone.

“It does not look as though it has the traditional subsidy model,” said Harrison. “If you put Wi-Fi and 3G in it, it is actually more expensive not less expensive.”

In a note relating AT&T’s financial prospects following the news, Jonathan Schildkraut, analyst at Jefferies & Co investment bank said the tariffs are “in line with the current data add-on options available with voice packages, and well below the roughly $60 plans currently offered by wireless carriers for a laptop card. The prepaid plan can be activated directly from the iPad and, because there is no contract, can be canceled at anytime.”

Meanwhile anyone who already has a wireless broadband “dongle” under a long-term contract and is thinking about installing its SIM card into an iPad will be disappointed. The iPad is the first mass-market mobile device to use micro-Sim cards, which are smaller than the current range of Sim cards and were designed for small consumer gadgets such as Birmingham-based Lok8u’s range of wireless-enabled wrist watches.

The iPad is also likely to prove a major headache for makers of similar devices, especially Taiwan’s Asus which recently announced plans for its own tablet, and Nokia which last year unveiled a “booklet” computer with built-in 3G. There are also understood to be several tablet computers running Google’s Android software in the works, with France’s Archos rumoured to be planning to release one in March.

A London street map on the Nokia N97. Photograph: Ray Tang/Rex Features

Nokia is taking the dramatic step of making its satellite navigation software free to all current and future owners of its smartphones as the world’s largest mobile phone manufacturer intensifies its fight against Apple’s iPhone and handsets using Google’s Android platform.

The Finnish company, which makes roughly four out of every 10 phones sold worldwide, spent €6.5bn (£5.6bn) on map firm Navteq in 2007, but from today will let anyone with a GPS-enabled Nokia device – such as its N95 or N97 handsets – download its navigation service and maps for free from its Ovi mobile application store. To date, Nokia has sold more than 80m compatible handsets worldwide.

Full satnav direction services – for both road users and pedestrians – will be available across 70 countries from today, with extensive maps available in more than 100 others.

The move is likely to infuriate satnav companies such as Garmin and TomTom, which charge up to £100 for in-car satellite navigation systems and will see their market effectively undercut by Nokia. It will also threaten companies that currently charge for downloadable satnav mobile phone applications – such as US-based ALK Technologies, whose CoPilot UK product currently costs £26.99 for iPhone users.

Nokia executive vice president Anssi Vanjoki denied that the decision to give its satnav service away for free is a defensive move against companies such as Google, which are increasingly encroaching on the company’s turf.

“It is a very offensive move if you will,” he said. “We are not talking one product for one country, we are talking map coverage in 183 countries, launching simultaneously globally in 76 countries with 46 languages and with millions of devices already out there, plus with all of our new products being equipped with this. So it does not sound too much like defence to me.”

But giving away sophisticated turn-by-turn car and pedestrian satnav direction services to entice customers to choose one of its smartphones over devices such as the iPhone and Google’s Nexus One is symptomatic of Nokia’s desperation to get back into the high-end mobile phone market.

The company has seen its share of the lucrative smartphone market come under sustained attack. It was slow to create a viable touchscreen rival to the iPhone while bitter rival Rim has successfully moved its BlackBerry line of mobile devices from the boardroom to the classroom, enticing a new generation of younger users. There have also been successful touchscreen launches by Samsung, which has already overtaken Nokia in the UK market. After more than two years of development, Google’s Android platform is starting to become a major force in the mobile market.

Google recently unveiled its first own-branded Android device, the Nexus One, to rave reviews. The internet company already has an extensive maps business and offers turn-by-turn directions in the US.

Outside North America it relies upon mapping data from Tele Atlas, owned by TomTom, and is not able to give full satnav services. But it is rumoured to be building up its own maps database outside the US with a view to launching turn-by-turn direction services at some point.

Vanjoki also denied that the dramatic volte-face suggests that the company know things Navteq is worthless. “Quite the contrary,” he said. “Right now, what is happening is we are unleashing all this power based on the Navteq acquisition which will help Nokia in three different ways: first of all this becomes a tremendous average sales price defender for our products because it will be completely unique – there is nothing similar available from anyone else; secondly this will be a demonstration of the capabilities and precision of the Navteq maps, so their business will be improved; and thirdly, there are all these developers that are developing applications based on the quality of the maps and then we can distribute those through Ovi store which is another business opportunity for us.”

Nokia is also making its maps available to any third party developer that wishes to build applications on top of them. These applications will be sold through the Ovi store and already Nokia is offering its customers free Lonely Planet and Michelin Guide information on its maps.

“It becomes a giant environment for mash-ups,” Vanjoki said. “Where people can deliver new applications and immediately they will have a huge customer base available to them”.

Nokia’s maps service also allows people to share their location with friends on Facebook, adding pictures and status updates. Its maps also include information about local attractions and events within walking distance of a user’s location through a deal with San Francisco-based local information aggregator Wcities, which has data for over 350 cities worldwide.

Nokia will still allow other satnav companies to use Navteq’s data for their services. Navteq’s maps, for instance, are used by Garmin.

• Charlie Brooker
• The Guardian, Monday 18 January 2010
• Article history

Cause an almighty logjam by shuffling slowly along the pavements staring at your augmented-reality app. Photograph: Marcio Jose Sanchez/AP

According to technophiles, experts, and that whispering voice in your head, 2010 will be the year that augmented reality makes a breakthrough. In case you don’t know, “augmented reality” is the rather quotidian title given to a smart, gizmo-specific type of software that takes a live camera feed from the real world and superimposes stuff on to it in real time.

Being a gadget designed for people who’d rather look at a screen than the real world, the iPhone inevitably plays host to several examples of this sort of thing. Download the relevant app, hold your iPhone aloft and gawp in astonishment as it magically displays live footage of the actual world directly in front of you – just like the real thing but smaller, and with snazzy direction signs floating over it. You might see a magic hand pointing in the direction of the nearest Starbucks, for instance – a magic hand that repositions itself as you move around. It’s incredibly useful, assuming you’d prefer to cause an almighty logjam by shuffling slowly along the pavement while staring into your palm than stop and ask a fellow human being for directions.

The Nintendo DSi has a built-in camera with a “fun mode” that can recognise the shape of a human face, and superimpose pig snouts or googly eyeballs and the like over your friends’ visages when you point it at them. You can then push a button and save these images for posterity.

For a while, it’s genuinely amusing (“Look! It’s dad with a pair of zany computerised bunny ears sprouting from the top his head. Ha ha ha!”), until you realise there are only about six different options, two of which involve amusing glasses. If you could customise the options, you could make it automatically beam a Hitler moustache on to everyone in sight, which would improve baby photos a hundredfold – but you can’t customise the options, probably for precisely that reason. You could print the picture out and draw the Hitler moustache on yourself with a marker pen, but that wouldn’t be very 2010.

But while current examples of augmented reality might sound a tad underwhelming, the future possibilities are limitless. The moment they find a way of compressing the technology into a pair of lightweight spectacles, and the floating signs and bunny ears are layered directly over reality itself, the floodgates are open and you might as well tear your existing eyes out and flush them down the bin.

My goggles would visually transform homeless people

Years ago, I had an idea for a futuristic pair of goggles that visually transformed homeless people into lovable animated cartoon characters. Instead of being confronted by the conscience-pricking sight of an abandoned heroin addict shivering themselves to sleep in a shop doorway, the rich city-dweller wearing the goggles would see Daffy Duck snoozing dreamily in a hammock. London would be transformed into something out of Who Framed Roger Rabbit.

What’s more, the goggles could be adapted to suit whichever level of poverty you wanted to ignore: by simply twisting a dial, you could replace not just the homeless but anyone who receives benefits, or wears cheap clothes, or has a regional accent, or watches ITV, and so on, right up the scale until it had obliterated all but the most grandiose royals.

At the time this seemed like a sick, far-off fantasy. By 2013, it’ll be just another customisable application you can download to your iBlinkers for 49p, alongside one that turns your friends into supermodels and your enemies into dormice.

And don’t go thinking augmented reality is going to be content with augmenting what you see. It’s a short jump from augmented vision (your beergut’s vanished and you’ve got a nice tan), to augmented audio (constant reactive background music that makes your entire life sound more like a movie), to augmented odour (break wind and it smells like a casserole), and augmented touch (what concrete bench? It feels like a beanbag). Eventually, painful sensations such as extreme temperature and acute physical discomfort could be remixed into something more palatable. With skilful use of technology, dying in a blazing fireball could be rendered roughly half as traumatic as, say, slightly snagging a toenail while pulling off a sock.

Some people will say there’s something sinister and wrong about all of this. They’ll claim it’s better to look at actual people and breathe actual air. But then they’ve never lived in Reading. And anyway, even if they’re right, we’ll all ignore them anyway, because the software will automatically filter them out the moment they open their mouths.

In other words, over the coming years we’re all going to be willingly submitting to the Matrix, injecting our eyes and ears with digital hallucinogens until there’s no point even bothering to change our pants any more. Frightening? No. In fact, I’ll scarcely notice.