Simple, they get a cut from the ones that arent free. The more 3rd party apps that are on itunes, the more money they get. Lets face it, Apple is all about the $$. The first major update to the iphone was the itunes store - a way to give apple more money, faster. However, I love this idea. Let Apple make their buck and allow us to have the best phones with the biggest variety of software on the market! Cant wait!