The App Store when Apple rejected apps for reasons having less to do with code problems and more with the intended function of some applications. Certainly there were times developers had to fix their code -- even if it wasn't always clear from Apple what needed to be changed. More controversial was Apple's decision to bounce apps for duplicating functions already offered on the iPhone or for being what Apple deemed inappropriate.

Still, the iPhone SDK and App Store could end up being the biggest Apple news of the year. More than 10,000 applications have been listed since the store went live with the launch of the iPhone 3G in July. Some developers have already made millions via their App Store offerings.

And the model has caught on with other smart phone makers: Google's Android, Palm, Microsoft and RIM now offer -- or have announced -- stores or software portals patterned after the App Store. The App Store concept may prove more revolutionary to the smart phone industry than the iPhone itself.

Building on the power of iTunes

2008 turned out to be a big year for Apple's iTunes, both as a media player and as a retail channel. In March, iTunes became the No. 1 music retailer in the world, ousting Wal-Mart from the top spot. That's big news for a couple of reasons. First, it demonstrates that the market for electronic music sales is much bigger than many music execs want to admit.