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Google has begun accepting paid applications into its Android Market mobile app store — a move that lays the groundwork for potentially following Apple’s lead in turning smartphone applications into a sizable moneymaker.

Initially, the Android Market offered only free applications. Now, however, the search giant confirmed plans to next week begin selling applications through Android Market after rumors began circulating earlier this week.

Users of the Android-based T-Mobile G1 smartphone can expect to see the paid apps available starting in the middle of next week, according to a Google (NASDAQ: GOOG) post on a blog for Android developers. The search giant said Google Checkout will serve as the payment and billing mechanism for the service.

The company started accepting paid applications from developers today, though it is limiting the program to U.S. and U.K. developers for the time being. Germany, Austria, Netherlands, France and Spain are slated to be added by the end of March.

The move puts Google more closely into competition for developers with Apple, and in particular, the PC maker’s popular App Store for its iPhone and iPod Touch.

Part of that motivation may stem from the fact that downloads at Apple’s (NASDAQ: AAPL) App Store are off the chart. During last month’s earning’s call, Apple’s CFO, Peter Oppenheimer, said there are 15,000 apps on the iPhone App Store, and downloads have surpassed 500 million.

App Store frenzy

The App Store concept has caught the attention of all the big mobile providers. In October, BlackBerry maker RIM unveiled plans for an App Store of its own, starting in March.

In mid-December, Palm launched its own mobile storefront, the Palm Software Store. The company’s storefront opened with 5,000 applications for over 25 existing Palm (NASDAQ: PALM) devices, with about 1,000 of the applications available for free.

The next month, the Treo manufacturer gave a first look at its upcoming smartphone, the Pre, which will hinge heavily on a sleek design, an iPhone-like touchscreen — and downloadable apps.

Microsoft (NASDAQ: MSFT) is also thought to be weighing an Apple-like storefront for mobile downloads. In fall, it began dropping hints about launching an App Store-like effort.

The software colossus is expected to detail some of its upcoming mobile efforts — including, potentially, a mobile storefront — during next week’s GSMA Mobile World Congress in Barcelona.

HP today announced HP iPrint Photo, a free application available on the Apple App store that gives iPhone and iPod touch customers the ability to easily print photos anytime, anywhere.

HP iPrint Photo is the first photo printing application of its kind and allows for quick and easy wireless printing of 4 x 6-inch photos from an iPhone or iPod touch to most HP inkjet printers connected to a local Wi-Fi network. The application is fully compatible with Apple’s Bonjour technology and uses the innovative Multi-Touch interface for the easiest and fastest wireless iPhone or iPod touch print experience.

“Today’s news demonstrates how HP is enabling customers to turn special moments captured on the go into high-quality photos,” said Vyomesh Joshi, executive vice president, Imaging and Printing Group, HP. “More than any other company in the world, HP has re-imagined, re-engineered and re-invented the power of printing with exciting new technologies that address real customer needs.”

The HP iPrint Photo application provides customers the freedom and flexibility to wirelessly print the millions of photos that have been captured on iPhone or iPod touch devices. It will be showcased for the first time at the 2009 Macworld Conference & Expo and the 2009 Consumer Electronics Show (CES).

“There’s a major shift happening in the mobile domain today,” said Rob Enderle, president and principal analyst, Enderle Group. “Annual camera phone device shipments are exploding on a worldwide basis, and mobile photo printing is quickly growing. Until now, customers had no easy way to print the special moments captured on their iPhone or stored on their iPod touch. “

HP iPrint Photo is available at no charge from Apple’s App Store on iPhone and iPod touch or at itunes.com/appstore.

A cheaper version of Apple’s iPhone will be sold at Wal-Mart Stores Inc for $99 later this month, the New York Post said.

Two models of the popular device will hit shelves at the retail giant, the paper said, citing employees at several stores.

Employees also told San Jose-based Mercury News that the $99 iPhones would be 4-gigabyte models, and that Wal-Mart (NYSE: WMT) was attempting a pre-Christmas launch.

The iPhone went on sale starting July 11 at $199 for the model with 8 gigabytes of storage and $299 for the 16-gigabyte version.

However, iPhone users need to sign up with data service provider AT&T (NYSE: T) for a plan that costs at least $30 a month for unlimited Web access and another $5 for 200 text messages or $20 for unlimited texting.

Wal-Mart has been gaining market share and clout in the recession as cash-strapped shoppers seek out its low prices.

Neither Apple (NASDAQ: AAPL) nor Wal-Mart were immediately available to comment.

Source: Reuters

AT&T (NYSE: T) and Apple (NASDAQ: AAPL) want a New York court to dismiss a class-action suit claiming allegations about iPhone 3G problems don’t belong in a federal court and should be moved into an arbitration hearing.

In their filings, both Apple and AT&T disputed the lawsuit’s charges that they misrepresented the device’s performance on AT&T’s 3G network and said the case ought to be taken up outside of court. They said doing so would comply with AT&T’s user agreement, which stipulates that handset complaints would be handled in an arbitration process.

AT&T added in court documents that its arbitration process has been cited by at least one legal expert as excessively generous and open.

“To [our] knowledge, [our] provision is the most pro-consumer arbitration provision in the country,” AT&T said in its court filing, which notes that it pays all legal fees in arbitration, offers a minimum $5,000 settlement, limits penalties on a finding of a “frivolous” complaint to $125 and supports arbitration taking place at the plaintiff’s location.

The latest twist in the iPhone 3G’s legal travails comes as the holiday buying season arrives in full force — amid a depressed economic climate that has carriers and handset makers worried about end-of-year revenue. Last week, AT&T said that it would lay off 12,000 in a reorganization effort to save money. At the same time, however, the company said it is still banking on its wireless business remaining one of its healthiest.

The suit, filed Sept. 29 by Avi Koschitzki in New York State Supreme Court, initially alleged that Apple and AT&T misrepresented the device’s speed on the carrier’s network.

Koschitzki’s lawyers, who did not return calls by press time, amended the complaint on Nov. 12 to include a claim that the iPhone’s casing cracks too easily. The plaintiffs seek statutory, compensatory and punitive damages and want a jury trial.

Current court documents do not include a timeline for Koschitzki’s attorneys to respond to the arbitration and dismissal request.

Apple and AT&T did not respond with comments by press time. Both companies have told InternetNews.com they do not comment on pending legal action.

Since the iPhone 3G’s debut in June, there has been a smattering of court actions claiming faulty network connectivity issues. The New York suit is the lone lawsuit that includes AT&T as a defendant.

Two Alabama residents filed suit in last August claiming the smartphone does not fulfill promised performance and connectivity expectations. The court has since dismissed two of their three lawsuit claims but ruled the plaintiffs can move forward to seek compensation for what they claim are faulty devices.

But RIM remains optimistic on strong growth, despite missed launch dates and woes elsewhere in the sector.

Research in Motion (NASDAQ: RIMM) is now on the growing list of mobile handset vendors feeling a financial pinch.

The BlackBerry maker said third-quarter revenue will be less than expected, about $2.75 billion to $2.78 billion, as compared to projections of $2.95 to $3.10 billion.

The updated forecast, which still represents a 65 percent jump over third quarter in 2007, is due to currency valuations, the weak U.S. economy, lower shipments and missed product launch dates.

Yet Co-CEO Jim Balsillie remains bullish on what the year’s end will bring.

“Customer response to the new BlackBerry products launched this quarter has been exceptional and RIM has experienced particularly strong momentum in recent weeks,” Balsillie said in a statement.

RIM did not return requests for additional detail or comment by press time.

The news marks the latest in a turbulent series of developments for RIM, which, like many of its peers in the mobile device space, is looking ways to fight back against an influx of new rivals, like the Apple iPhone, amid a grim economic climate.

The company faltered earlier this year when its BlackBerry Bold shipped six months late, arriving in November — well after Apple (NASDAQ: AAPL) debuted its iPhone 3G on June 9.

The Bold reportedly suffered delays due to problems in network testing by its exclusive carrier, AT&T (NYSE: T).

More recently, RIM’s new BlackBerry Storm — seen as its best attempt yet to thwart the challenge posed by Apple’s strong push into the market — is meeting with lackluster reviews.

It’s unclear precisely how many products RIM wound up shipping during the third quarter. The company had previously said it expected to ship over 7 million units during the quarter, a comment that came during its second quarter earnings report in late September. The company shipped 6.1 million units in the second quarter, it said at the time.

But RIM and its peers may still fare better than other sectors of the economy.

How so? A recent J.D. Power and Associates report said mobile device users are paying more for handsets and services this year, with the average purchase price hitting $107 — an increase of $15 from last year.

It’s also undeniable that RIM continues breaking milestones. It said its daily net subscriber accounts hit a record level with the launch of the Storm on Nov. 21, and that it set a record number of weekly net subscriber additions during the last week of the third quarter.

“Initial sales of new products have been very positive and we believe we have the strongest smartphone portfolio in the industry by far,” Balsillie said. “RIM is well positioned to capitalize on the increasing smartphone market opportunity and we remain focused on driving growth in the fourth quarter of fiscal 2009 and beyond.”

A cloud over the industry?

Yet RIM’s warning comes on the heels of lowered projections by smaller rival Palm.

The company said revenue for the second quarter of its 2009 fiscal year would land way below analysts’ expectations of $299 million to $363.4 million, based on Reuters Estimates. Instead, Palm (NASDAQ: PALM) said revenues would hit somewhere between $190 million and $195 million.

Recent Gartner research showed Motorola (NYSE: MOT) struggling as well during the second half of this year. The company fell to fourth place in global mobile handset sales, trailing behind Nokia, Samsung and Sony Ericsson, in that order.

The only handset maker that doesn’t appear to be suffering is Apple.

A Piper Jaffray analyst reported last week that the iPhone will continue its meteoric rise into the New Year.

According to the report, the smartphone will represent nearly 20 percent of the Mac maker’s overall sales in 2009 — up from 5.7 percent of the company’s total sales this year.