Bad news first: You have to pay $99
Good news: You can make the apps first and then if you want to sell / distribute them, THEN you have to pay $99.
Is it a tedious process ?
To make them, maybe. To attempt to make them, no. Here's how it works -
1. Sign up for a free ID here
2. Download the iOS SDK - iOS Software Development Kit which includes Xcode and the iOS Simulator.
3. Build and develop your applications. I suggest reading a book to learn how or youtube tutorials if you prefer visual demonstrations
4. Test your app on the iPhone / iPad simulator that comes with the SDK. ( Yes there's a simulator and its awesome. Image shown above and below )
5. If you like it and feel it'll sell, pay Apple $99 and send them the apps.
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