The story has been corrected on the wire. The fourth paragraph now reads as follows:
Previously, carriers were the main channel for phone applications, but the App Store put a handset maker in charge. Apple said last week that there have been more than 800 million downloads from a selection of more than 25,000 applications at the App Store. Google has already followed Apple's example with the Android Marketplace. There are more than 2,300 applications now available from that store, and the average user of a T-Mobile USA G1 handset has downloaded 40 of them, a T-Mobile executive said last week.