The Federal Trade Commission has settled with Reverb Communications over fake positive reviews posted on behalf of its clients in the iTunes App Store. The company represents several developers who produce apps for iOS, and helped raise their ratings by posting the reviews.

FTC officials did not disclose which companies worked with Reverb to boost their ratings, nor did they say that those companies shared any fault. They ordered Reverb to have all comments removed within a period of seven days.

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As a lapsed musician, I find no comment about the iPad more off-base than “it’s a device for consumption, not creation.” Thanks to the App Store’s low price barriers, the ingenuity of app developers and the jumbo touchscreen, I’ve had a blast creating all kinds of music on the iPad, from instrumental compositions to far-out noise experiments.

I haven’t sifted through every musical offering on the iPad, but over time I’ve accumulated a handful of iPad music creation apps that satisfy the occasional urge to be creative. Read on for my favorites (click on the images for a larger view).

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Standing on the stage in front of thousands of developers at the 2010 Worldwide Developers Conference, Apple CEO Steve Jobs seem to take issue with the medias often negative characterization of the App Store process. Apple has repeatedly been criticized for using what seems to be an uneven standard when selecting which apps make it through to the store.

Jobs was having none of that. He claims that Apple approves 95% of the apps it receives for inclusion, most in less than a week. Some 15,000 apps are sent per day, he added. So what happens to the other five percent that don’t make it? Jobs says these are either buggy and do not do what they say they do.

Doesn’t seem to address the actual problem in my opinion, but I guess you can give Steve Jobs credit for attempting to get out in front of the issue?

Three days after the launch of Apple’s iPad, video games are dominating the app landscape, according to analytics company Distimo (via TechCrunch).

Distimo counted 2,385 iPad-specific apps as of April 6, and 833 of them were games. The closest behind were entertainment apps, with 260 specifically for the iPad. Games account for roughly a third of all iPad apps, compared to almost 60 percent on the iPhone.

It makes sense that games account for fewer total apps on the iPad than the iPhone, but the discrepancy is still shocking given what Apple tells us about the applications people are downloading. Looking at current top 10 charts on the iPad, there are only three games among the most downloaded paid apps, and none among the most downloaded free apps. For all the games in the iPad App Store, few are making a dent in overall sales, especially compared to the iPhone, on which games account for eight of the top 10 paid apps and seven of the top 10 free apps.

What are people downloading the most on the iPad? Productivity tools like Pages and GoodReader, informational apps such as The Weather Channel and USA Today, and entertainment portals such as iBooks, Netflix and the ABC Player. From the initial charts, it seems that people are not nearly as interested in playing games on the iPad as they were on the iPhone. Anecdotally, I’m not. I’m still waiting for a killer music creation app and a blogging tool that actually works.

Of course, things can change. The top download charts could eventually list more games as they flood the App Store — especially if developers get desperate and start slashing prices. As a gamer, I certainly wouldn’t complain, but I also hope developers see the need for more productivity, information and content apps, and fill it.

For a brief period last night, iPhone owners without jailbroken phones had access to a fully-functional Nintendo emulator. I’m kicking myself for not spotting 9 to 5 Mac’s story sooner, but it looks like the app got pulled very shortly, maybe a couple hours, after the news broke.

The app was called Nescaline, and its creator is Jonathan Zdziarski, who wrote iPhone Forensics. The $7 app included several homebrew games, but also allowed users to download more games by pointing the app to the URLs of ROM files. On his Web site, Zdziarski says an Apple rep told him the app was removed because it was an emulator. “Ironically, Apple currently has several emulators in the AppStore, so I am going with the belief that someone (likely Nintendo) probably pressured them about this particular application,” he wrote.

He’s right about the App Store having other emulators, but it’s more complicated than that. Currently, it’s possible to purchase C64, which lets you play classic Commodore 64 games, but it only found permanent footing on the iPhone after some drama involving the app’s BASIC interpreter and the ability to hack into it. More importantly, C64 maker Manomio has the rights to the games it sells. Nescaline, by contrast, opened the door to illegal game downloads.

It’s certainly possible that Apple’s trying to avoid legal hot water — Nokia attracted some unwanted attention by advertising that capability on the N900 — but I also think Apple is inclined to reject NES emulators in order to protect the App Store’s business model. When you have games that can make $1 million per month, why give people a bountiful source of free, classic games?

Given that Apple and Nintendo are now competing, I think an official NES iPhone app is unlikely. As for why Nescaline was approved in the first place, I’m thinking it was a simple blunder. I doubt Zdziarski was the first developer to submit a Nintendo emulator.

When the App Store first launched last year, there was a lot of uncertainty around just how much it could viably contribute to Apple’s bottom line. Many said the offering would just be a minor blip on the revenue sheet — but now it appears it may be set to become a significant revenue driver.

Take for example Tapulous. The creators of “Tap Tap Revenge” among other titles now says the App Store is responsible for $1 million in sales per month, Reuters is reporting. This is a staggering figure for a company that only has 20 employees, and makes its entire living off of creating iPhone/iPod touch applications.

An estimated one-third of all App Store users had installed TTR, according to comScore research released earlier in the year.

How much is Apple making off of merely hosting Tapulous’ wildly successful applications? Using the 70/30 revenue split, Cupertino is raking in a cool $400,000 plus a month. That’s not only profitable to Tapulous, but also to Apple, whose hosting costs for the App Store for those applications are definitely nowhere near that.

Tapulous is also making some Apple-fee free revenue too. Although it won’t give specific numbers, the company has additional revenue streams through selling songs for its games, and in-game advertising.

We should be fair here though. This company’s success is probably the exception rather than the norm — there are about 100,000 apps in the store produced by thousands, if not tens of thousands of developers. It’s very tough these days in the App Store to compete and make a large amount of money, but Tapulous is quickly proving that its quite possible to do very well with the right application.

Supposedly fed up with “the tide of fake App Store reviews,” iPhone game developer G5 entertainment wants your honest opinion, and plans to get it by giving away free games.

For its latest release, Judgment Day War, G5 is looking for reviews in exchange for a chance to win one of its earlier games. Before submitting your review to the App Store, you send it to reviews@g5e.com, along with your App Store user name, and the developer picks the 50 reviews that it deems most “interesting.”

I’ll note that the press release skillfully avoids defining what an “interesting” review might entail, lest that definition be interpreted as “thumbs up.” It doesn’t say whether overly negative reviews and enthusiastically positive ones will be judged equally, but there isn’t any encouragement to stay fair and balanced either.

Fake App Store reviews aren’t unheard of. In August, MobileCrunch ran an exposé on Reverb Communications, whose staff was caught writing positive reviews of clients’ games (Reverb insisted that the reviews were written on the staffers’ own time, based on their own experiences, and said that if Reverb didn’t like the games to begin with, “we wouldn’t take them on as clients.”) Other instances abound, as reported by BusinessWeek.

Are G5′s tactics as sleazy as the rest? Not quite, because the developer isn’t soliciting positive opinions and directly compensating for them, but something about it still stinks. If G5 really wants to contribute to an App Store that’s free of fraudulent reviews, it can do its part by butting out.

In the same way that Booyah Society is rooting for me, I’m really hoping the new iPhone app can do better than it has.

It’s an idea with a lot of promise, which is why I was excited to meet with one of the creators, Keith Lee, for lunch last week. The “social game,” as he bills it, offers “achievements” — like the accolades you get within Xbox 360 or Playstation 3 games — but for real-life accomplishments.

In other words, instead of getting a symbolic pat on the back for becoming a Level 40 Sword Master or scoring five headshots in 10 seconds, you’re congratulated for going to the gym or eating organic food. Or so it goes in theory.

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Xbox Live Arcade is no longer a purveyor of quick-hit, $5 video game downloads, but a place where $15 games are beginning to thrive.

That’s what Kotaku found after looking at the cost of downloadable Xbox 360 games, from the console’s launch in 2005 up to last month. The average cost of video game downloads has climbed, especially in the last two years, but the reason is a shift in how many of these games cost $10, $15 or even $20 for a purely electronic copy. The tell-all chart, compiled by Stephen Totilo and Andrew Freedman, is located here.

The rise in prices on Xbox Live Arcade isn’t a bad thing. It means the kinds of available games are richer experiences, coming closer to what you’d get from a boxed title. Braid, an indie game priced at $15, is the perfect example. Same goes for the recently released Sam & Max Save the World ($20) and upcoming Shadow Complex (likely to cost at least $20).

Digesting this, my mind jumped to the iPhone’s App Store, whose free market is a mixture of zero-dollar “Lite” games, $10 offerings from major publishers and everything in between. A recent report by Pocket Gamer found that the average price of top 10 titles is $1.89, while top 100 games average $3.80. So I wonder: Will App Store games get better, causing a surge in prices?

Before I go on, let me acknowledge that I’m totally comparing apples (har har) and oranges. Not only are the two data sets different, but the gaming platforms don’t necessarily lend themselves to the same demographics or same style of play. But my point isn’t to make a direct comparison between two non-competitive marketplaces.

What interests me is how Xbox Live Arcade is cleverly evolving into a place for high-quality game downloads, while the App Store is not. Pocket Gamer notes that the most successful $10 iPhone games are big-name franchises, such as Doom: Resurrection and The Sims 3, but those are just dumbed down versions of their computer counterparts, and even they’re undermined by the amount of inexpensive and simple games available. Meanwhile, Xbox Live Arcade is bringing in entirely new games while phasing out the cheap stuff.

The difference, of course, is that Microsoft takes on a greater role in regulating its market. I’m not saying Apple should do the same, but when it comes time to spend $15 on a downloadable game, I know which market will get my money.

Cable provider Comcast has joined the legions of service providers and companies creating their own iPhone apps to interface with their services and offerings. It would be most useful to those with the so called “triple play” package: cable, Internet, and phone service.

The main functionality of this application splits into three parts. The first is an email application that will allow the user to check his or her email. But it functions more than just an email inbox. The users phone voicemail also uses this setup, although you can either select to view those in a different tab or mixed in with your regular mail.

I’m sure most of us will opt for the separate tab: with the amount of junk mail these days, your voicemails will likely just get lost in the mix. Nice feature here is Comcast’s use of iPhone 3.0 functionality — meaning you’ll be able to type in landscape mode just like you could do in the standard Mail app.

More than just voicemail — users will be able to view their received/missed calls from the application. If you so choose, you may click on the number to call or text the caller back from the iPhone.

If you have a Comcast Address Book, you will be able to sync the data there with the standard iPhone Address Book. This is a nice feature — and could be useful to those who may not have MobileMe but would still like that syncing functionality nevertheless.

Other functions include a Guide app, which will tell you what’s on television right now, and an “On Demand” feature which allows you to watch movie trailers of upcoming programming on the service.

However, what’s missing here, and what makes the app less than fantastic — err, Comcastic rather — is the lack of DVR control. PC Magazine’s Sean Ludwig points this out and i tend to agree. If it had this, I’d consider it one of the iPhone’s killer apps.

Alas, there may be some kind of technical hurdles to getting this done, but I think it definitely should be a priority in a future release.

When you look at this week’s New Yorker cover, you may initially think it was a watercolor. But it’s not — its done digitally, and on top of that, on the iPhone no less.

Artist Jorge Columbo created the New York street scene on a program called Brushes. It is a petite 1.9MB art application available through the App Store.

He stood on 42nd Street creating the scene in about an hour, according to the New York Times.

According to Columbo, he purchased the app after getting his iPhone to keep himself “entertained.” Well, it seems he’s done more than that now that one of his digital works is now gracing one of the country’s most notable arts and entertainment magazines.

Columbo also captured the process of creating the artwork through a special feature within Brushes, which shows his methodical process of creating the scene layer by layer.

(You can see the video at the New Yorker website.)

This cover art will not be the last of the artist’s iPhone artwork. The magazine said it would host a new creation from Columbo each week on its website.

Lightspeed Venture Partners‘ managing director Jeremy Liew threw some cold water on Apple Thursday, saying that while the company has indeed sold some one billion apps, it likely has made no more than $45 million in revenue overall from the App Store.

Liew did some research to find that only one paid app is sold for every 15 to 40 free apps. This would infer that between 25 and 60 million of those one billion apps were paid for.

Going forward, he used the mean price for sold iPhone apps of $2.65, as released by O’Reilly. Together that would add up to revenues of $70-160 million, of which Apple only sees 30 percent of. Thus, $20-45 million in profits.

The kneejerk reaction here is to gasp and say, “wow, Apple’s App Store has been a failure from a revenue standpoint.” Not so fast, though. The company has repeatedly said it did not expect much revenue from its service, so this should come as no big surprise.

Add to this the fact that the App Store has a bigger purpose for the company over and above making money. It’s meant to draw people to the platform. While there’s no “killer app” for the iPhone just yet, the broad-based support it gets from services across the industry is a definite draw.

Notice how Microsoft and RIM have been scrambling to develop App Stores of their own? There’s a reason for that.

Want your app in the Apple’s App Store? Better quickly make sure that it’s compatible with the latest beta of iPhone OS 3.0 or it won’t get approved. Apple shocked the developer community Thursday with the announcement that it was mandating that all apps henceforth be compatible with iPhone OS 3.0, or they would be rejected.

Here’s what Apple said:

Beginning today, all submissions to the App Store will be reviewed on the latest beta of iPhone OS 3.0. If your app submission is not compatible with iPhone OS 3.0, it will not be approved.

Existing apps in the App Store should already run on iPhone OS 3.0 without modification, but you should test your existing apps with iPhone OS 3.0 to ensure there are no compatibility issues. After iPhone OS 3.0 becomes available to customers, any app that is incompatible with iPhone OS 3.0 may be removed from the App Store.

There are potential issues here. OS 3.0 is still in beta. There’s no saying that Apple may have screwed something up on its own, which breaks an application in the current beta, but may not necessarily in the final release.

It could mean additional work for some developers, which could be a headache. While Apple is certainly right to want developers to start thinking in terms of OS 3.0, testing apps on a beta release just doesn’t seem too foolproof, don’t you think?

Apple is once again finding itself at the short end of the PR stick with Nine Inch Nails’ Trent Reznor publicly taking the company to task over what is clearly still a inconsistent process on Apple’s part: its approval process for App Store applications.

As Jared touched on earlier this evening, an update to Reznor’s application, nin:access, was denied by Apple. It appears as if the problem lies in some of NIN’s content, which is readily available through iTunes to anyone.

I can see Apple’s preference to keep profane content out of the App Store, although as I’ll point out later the company is far from consistent in its application of the rules.

Apple’s reasoning is content from The Downward Spiral. Several of the songs on that album, especially “Closer,” may be a bit over the top for sensitive users. For those who’ve never heard it, lyrics from the song include it’s notable chorus:

I wanna [expletive] you like an animal
I wanna feel you from the inside
I wanna [expletive] you like an animal
My whole existence is flawed
You get me closer to God

The video (which may be what caught Apple’s eye) is pretty graphic — such that the TV version included several missing scenes in order to allow it to be shown on MTV — but at the same time, its far less offensive than some other things that have made it past the iTunes censors.

But get this: you can’t get The Downward Spiral directly from the application. It’s only in the band’s podcast.

Consider the “Baby Shaker” application, which would have probably still been in the store if it hadn’t been for the amount of negative coverage Apple got for leaving it through. This app was probably the most egregious example of Cupertino’s approval issues, but there’s a lot less severe ones, either in bad taste or just questionable altogether.

How about an App that tracked menstrual cycles of your girlfriend? Or the multitude of fart apps, including one that actually showed a person’s backside? Or an app that cost $1,000, yet didn’t do a single thing?

So let’s go back to the clause in the iPhone Developer Agreement that Apple’s using to explain it’s reasoning for rejecting Reznor’s update:

Applications must not contain any obscene, pornographic, offensive or defamatory content or materials of any kind (text, graphics, images, photographs, etc.), or other content or materials that in Apple’s reasonable judgement may be found objectionable by iPhone or iPod touch users.

Hmm. Baby Shaker wasn’t offensive? Or the menstrual cycle tracking applications, which could easily be obtained by those possibly too young (in their parent’s judgement) to be having sex? I’m not sure about the $1,000 application, but when there’s no value to an application, why is it allowed to be sold?

This inconsistent application of the rules just makes Apple look bad. Don’t get me wrong, I think it’s good the company is gatekeeping a little bit. It results in better and safer applications. But why are some of these applications making it through?

Apple won’t talk and explain itself. All we’ve seen from them is the pulldown of the app, and then an apology if we’re lucky. Every time they’re asked how they’re picking applications, they’ll either defer or not comment at all.

So, we’re sit here leaving to wonder why stuff like what I’ve listed gets through, and other applications which don’t even really seem to meet the criteria listed above get rejected.

I don’t think that NIN really should have had their application rejected. What really changed between the first and second versions of this thing, and didn’t the first reviewer did any research on the band’s work?

Guess not.

You might remember Brian Chen at Wired’s reporting on iPhone App Store piracy. That got us to thinking, is it really an issue, or just an exaggeration of a minor problem? To test our theories, we decided to attempt to install a pirated app on one of our own iPhone 3G’s here at Technologizer.

We’d like to apologize ahead of time to the developer whose apps we have used in this experiment. Your app wasn’t singled out or anything, it was merely selected to show the process. It has since been deleted: Technologizer has no interest in participating in this activity.

Anyways, back to our test. The first step in the process was to use the website Mr. Chen sourced, The Monkey’s Ball. We found that from a perspective of actually searching for sources say via Google and the like, easy-to-use sources for average Joe Pirater are not readily found. Yes, the searches will uncover places to download apps, but you’re pretty much on your own to figure out how to use them.

We surfed around TMB and found that there wasn’t any download links to use when looking through the applications, so we moved on to Appulo.us. Success. Within minutes I had surfed to find MLB At Bat 2009.

The next part absolutely floored me. I clicked on one of the apps and Firefox detected the .ipa extension as executable by the iTunes app. Fair enough, I selected “open.” Within moments, the full version of At Bat 2009 was in my list of Applications. That’s scarily easy.

We hit a road block however — MLB could not be installed because iTunes could not verify them. So we moved on to Capcom’s Mega Man II. Same error. So we did some searching, and found out why. To install cracked apps you need to have a jailbroken phone, and the application IPA Prep installed.

So, for the most part, developers can breathe easy because a majority of us are running non-jailbroken phones. But for those who have jailbroken phones, all you need is an app and a web browser, and just about any application you can imagine is well within your reach.

Apple has just made it too darn easy.

iPhone developer analytics company Medialets studied piracy on the iPhone, and found a surprising number of applications on the App Store have likely been pirated. Of the 25,000 or so on the service, approximated 5,000 of them have been cracked, allowing users to use them for free.

Some applications are being pirated at as much as a 100-to-1 ratio. Obviously, that developer is losing a ton of money. Apple is not commenting on the situation, and its also not clear exactly how much piracy is going on in the App Store.

Personally, this is the first time I’m even hearing you could pirate these apps, and I’m sure it is for quite a few other individuals. But apparently its on BitTorrent. If you see a file called “X-Mas iBrain Pack,” it contains 808 cracked apps in a 5GB+ file. Sites have also cropped up across the Web hosting as many as several thousand pirated apps for download.

While some are seeing their profits decimated by piracy, others are saying its such an insignificant problem that they’re not concerned with it. I’m going to take a lucky guess and say the most overpriced apps are likely the most pirated.

Some developers are charging a bit much for some of their apps in relation to their capabilities.

(Update: We’d like to apologize to Brian Chen at Wired. A link to his piece was not included in our coverage as it should have been. Be sure to take a look at his take.)