So, is Apple making money off of it? No.

Are many developers? It’s hard to tell. Although this lady is making $2,000 a day on a crossword puzzle game she created.

Most articles I’ve read suggest these apps — many which are free or near free — are great for promoting other services.

“It’s all good, thought [sic], as a sort of reverse razors-and-blades scenario: Instead of razors selling blades, Jobs theorizes that applications will help drive sales of the iPhone — just like iTunes helped propel iPod sales,” writes Wired blogger John C. Abell. Here, again, we have “free” making people money.

Free apps may also help sell the services behind them. Some are a teaser versions of full-blown programs, iPhone-optimized versions of a pay service, or promotions for beer or food.

The quality of these programs vary widely. By allowing the apps to be sold, Apple is opening up its phone to a “marketplace” of ideas, or programs, really, and enriching the user experience. Many will stink; fewer will be awesome. Quite a few will only be downloaded a couple hundred times but will find their niche down the Long Tail.

Apple has taken a risk by opening up its previously closed system, but could reap the rewards of increased phone sales (the company already has sold millions and plans to sell 40 million worldwide next year) and marketshare. When Google’s Android OS debuts this fall, it could be a battle of platforms.

I spent a good 10 minutes in the parking lot after picking up my new treasure a couple weekends ago messing around with this new gizmo. I even downloaded the Pandora application so I could have awesome streaming radio the whole way back home. Everything was great, or so I thought.

3G reception in my house and the immediate area around it is spotty. Oddly if I drive down the road in any direction maybe a half a mile, it improves. But phone calls are where the troubles begin.

During another frustrating session with Time Warner cable a few weeks ago, I made my series of calls to them in 3G, before knowing it is not a viable option in my apartment.

3G phone calls have been a bit like walking around my house with a cordless phone in the mid-1990s. Remember how you used to pick up radio waves or other people’s conversations? The iPhone will occasionally do something like this when it’s not dropping calls in 3G.

It’s not just me

CNET yesterday provided the best overview article on the subject to date. Basically I am not alone. AT&T and Apple have remained quiet about the subject, despite the massive number of posts on Apple’s own discussion forums. (It got so bad, that it spilled over into another thread after the original one hit the limit.)

Since Apple has been mum on it, many have speculated on what’s going on. In summary:

• It’s a 3G network thing. It’s being overwhelmed by new iPhone traffic, especially in big cities.
• It’s the hardware. Apple and its chip maker didn’t make the antenna and associated components strong enough.
• It’s the first batch of 3G iPhones and a SIM card exchange fixes this.
• It’s Apple’s first 3G phone and other cell phone manufacturers have had similar growing pains.

Help may be on the way, according to Business Week sources.

Apple will likely issue a software update by the end of September—if not by the end of this month—to resolve the issues. Apple and Infineon are currently testing the fix, which will be included in a broader update of the iPhone’s software. iPhone owners will be prompted to install the update when they synch their iPhones to a PC, just as they have on many other occasions. In its statement, AT&T said, “We urge our customers to synch iPhone 3G to iTunes frequently to ensure they have the latest software updates.”

USA Today’s mysterious “sources” put it as early as next week. The Wall Street Journal also chimes in, adding more software update speculation.

Back to customer service

I am not an expert on public relations. As a journalist, I’ve been trained to not trust those spinsters. But here’s a bit of free advice for Apple and AT&T: acknowledge the problem!

Yes, Apple has had to swallow its pride on the Mobile Me roll out. Steve Jobs even apologized. Now it’s time for the 3G.

I, like a lot of 3G owners, would be more understanding if Apple and AT&T issued status updates. What’s going on? When do you expect to address the problem?

So far the official word out of Apple/AT&T customer service has been for users to switch to the slower, but more reliable, EDGE service. Really? I’m paying quite a bit extra for 3G service in an area that supposedly has pretty darn good coverage. (Something AT&T will deny. This map is just an “estimation.”)

Here I am “saturated” in 3G coverage.

A bunch of whining fanboys?

Is this problem magnified by Apple’s intense following? Perhaps. But it’s these intense followers that make up Apple’s “fan base” and are the ones Apple should be very concerned about. It’s also the casual user, new to Apple products, that the company should also worry about. For a firm that churns out products that “just work” this is a mighty blow to its credibility.

I have until early September to return my phone and get out of the iPhone contract. I don’t want to, but I will, especially if Apple and AT&T remain quiet on fixing this problem.

Aside, the phone call/3G problems, the iPhone has some pretty cool other features that mean a lot for the future of journalism and communication. More soon!