Uhm, there is a whole lot of free software in the iPhone AppStore, in fact the store is more or less divided into free apps and apps that cost money, the good thing about it is that you do not have to search half the internet to find what you need, there is one central place where all the apps your device can use are, you don't have to go to shady websites with really slow servers, dead links etc. that some hobby designer put on the internet, you just go to the appstore and browse categories or search for what you want. For the programmers the advantage is that all their potential customers go to the appstore, where they can find the app. Another advantage for the customers is that apple tests every single app relatively thoroughly to prevent fraud, viruses, execution of external code etc. All in all I find this a great advantage, on my windows mobile smartphone I had a far worse experience, in fact I had far less apps, it was harder to find theem, some of them were optimized for other screen sizes etc. The Apple approach is a bit more like the console approach for gaming and for a cellphone i think that is fine, if I am on a train and want to download an app or a song I won't have to open the browser and wait ages for google to load, all the search results to load etc. I just go to the appstore or itunes store and search for the app/music and get there much faster. On the PC it's a different animal and browsing is easier but my iPhone was never meant to replace my PC.
And it's actually safer than my PC(so far anyway) because not everyone can just execute all sorts of code on it(I know, there are two viruses, one needs it to be jailbreaked and the other comes through...your PC IIRC).
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