• Fortune, Wednesday, August 20, 2008 11:15 AM

Handset makers are battling each other for developers as well as consumers, Fortune reports. Mobile applications like mapping services and games are seen as the key to transforming mobile devices into pocket computers. The likes of Google, Apple and BlackBerry are actively trying to woo developers into their camp, which is precisely why earlier this year, Google kicked off a competition awarding cash prizes to developers who create innovative apps for its Android mobile operating system. Apple, meanwhile, has launched the $100 million iFund in conjunction with the venture capital firm Kleiner Perkins Caufield & Byers to invest in promising developers. Similarly, Research in Motion unveiled the BlackBerry Partners Fund, worth $150 million.

Even though BlackBerry is by far the most popular smartphone in the U.S. (Apple's iPhone is just one year old, and Android-powered phones have yet to hit the market), many developers say distributing their applications is tricky, because most BlackBerrys are used by corporate employees whose IT departments preload them with applications. Also, adding new applications on BlackBerrys isn't intuitive.

By contrast, apps are easily downloaded through Apple's App Store. They are also better, says Piper Jaffray's Gene Munster. "Mobile users haven't seen apps like this before," he says, estimating that as many as 91% of iPhone owners will download applications over the App Store, which could become a $1 billion market by 2009.

Read the whole story at Fortune »