App Store Now Compensates For Misspelled Searches: What It Means
Today, MacRumors ran an article titled "App Store Searches Now Compensate for Typos and Mispellings." In it, they describe a change to the algorithm that Apple's App Store uses to find results for searches to account for mispellings, so that, for instance, a search for "hotwls" returns apps related to "hotels". Among other things, this represents a clear expectation on Apple's part that the majority of searches are informational queries rather than navigational queries.
The Good
If your app name uses traditional spellings of words or your target market is users looking to solve a specific problem, this change means that any user who inadvertently misspells a word while searching for your app will still likely find it in the returned results. However, this will not change the potential that any app that uses one of the mispelled terms as its name will appear more prominently.
The Bad
If your app name specifically uses a misspelled word as part of the branding and marketing, you are now competing with all of the apps that use that word with its normal spelling. Not only are you likely at a disadvantage competing for a given search term (since your app's name is a misspelled version and others are not), but you are swimming against what Apple has determined is the current by expecting your users and soon-to-be users to search specifically for a misspelling.
The Ugly
In the interest of making search engines better, the companies behind them frequently change the algorithm to acheive more accurate results. Often, search engine marketers (and by extension app store marketers) attempt to exploit the shortcomings of the system (e.g. using a unique name potentially with misspelled words to build brand equity while focusing on keywords and description optimization), only to have the algorithm change to, at best, ignore the workarounds. The best example is the replacement of keyword-based web page search algorithms with authority-based ones like Google's PageRank.
Regardless of spelling, names, and keywords, the best way to optimize your app's search performance is to (a) get lots of downloads, (b) get lots of good ratings, but, above all, (c) be authentic. If the name, description, and keywords are true to the app and to the target audience, you will only ever have to make minor tweaks as features change and the audience becomes more sophisticated.