Apple is hedging some of its coming success on physical greeting cards.
The new iPhone app, which was shown as part of the iPhone 4s announcement, is called Cards and is designed to create, print, and send physical greeting cards. The basic idea is that you can use photos from your iPhone, or iPad or iPod Touch, and then put together a greeting card that could be then sent as part of a service directly through the Postal Service. The cost would then be $2.99 per card that is sent through the mail to a U.S. address, and only $4.99 outside of it.
This is an extremely involved basic function and a way for Apple to integrate a new commercial market right onto their device, even if it appears to be a backstep from a completely digital world. This will even increase the distribution of greeting cards since you never have to actually go through the process of buying, putting together, or sending the greeting card. Instead it follows much of the bill pay model that people see in banks, where you instead construct the card digitally and choose to have it sent.
From what we can see the design of the iPhone Cards app is somewhat involved, allowing for quite a bit of detail with the cards. The basic premise is that the cards are going to be built on the photos you already have in your iPhone, which is likely propped up by the new 8-megapixel camera in the iPhone 4s.
You will still be able to email these cards to the recipients for free, which is a nice touch since the design of the card is still built on you. This will also be integrated into your new Notifications system and you will be notified through a push notification whenever you have actually sent your card over to the recipient in the physical mail.