The application store is as the name suggests, an application store. Here, one would get free and paid apps from the store, and download those applications to their device. Since the OS uses proprietary technology, there will be a need for the store. Keep in mind, that the handhelds will not have access to the Google Play Store even though the handheld is running a version of Android.
The application store will support computers, handhelds, printers, servers, and TVs. The Application Store will detect the device, and only show compatible apps. If an app can run on multiple platforms, then the user will select which version of the app they will wish to install. The developer will be in charge of deciding the extra cost of multiple editions of the same software package.