Given the vast (and growing) number of iPhone users, there likely is a growing number of iOS4 users. Both iTunes and the iPhone have recently received software updates that enhance the phone’s usability and organization. The principal new addition along these lines is folders for applications.

Previously, if an iPhone user had more than, say, three or four pages of applications, finding them was a multi-step process of searching and swiping. Organizing them was also cumbersome – you either moved them one by one on the phone itself, or used the marginally better tool available in iTunes for switching them around. You still needed to consider where you put them, perhaps grouping like apps on the same page and organizing pages from most to least used or some other convention.

Folders have the power to change this process and, better yet, can collapse 10 + pages of applications down to 1 or 2 pages. But, how do you use this new foldering system to get the most out of the phone?

Folders are created when you enter editing mode on the phone by tapping and holding any app icon, then dragging one app on top of another. Once you do this, a folder is born and the phone even suggests a label based on the App store category of the first two apps you have grouped. If you want to change the label, simply tap on it and an edit box comes up. To access apps within folders, tap the folder and a strip of apps within the folder overlays the screen. You can fit 12 applications within a single folder. Before folders, the iPhone could fit 180 apps – 16 on each of 11 pages plus 4 in the dock. With the new foldering system, you can load 2,160 apps, if you fill each folder with 12 applications and load the dock with 4 folders. You can load more than that – they just won’t be visible on the page and will only be accessible via Spotlight search. And, if an app within a folder has an updated status (the tiny red circles with numbers), then the folder shows that status, adding together the notifications from all apps within the folder. You can delete a folder by removing all apps from the folder. You also can use the new, folder-friendly iTunes to create, edit and move folders. Simply drag apps onto other apps in iTunes and a folder will be created. Select a bunch of apps together and drag them all onto a folder at once.

So, how do you organize your new, extended-to-more-than-the-power-of-Ten App life? Well, you can apply a process similar to the pre-iO4 phone and simply stack like apps into folders, per the instructions above. Don’t be fooled – it’s still tedious. It took me the better part of an hour to get the hang of it, add, edit, move and shuffle apps and files. There are ways, however, to improve the process, particularly if you have tons of apps.

iTunes offers limited ability to categorize applications. When your device is connected, click on the Apps label in the left column of iTunes. You will see all your apps in there. Along the top is a tab labeled “Genre.” Click on that tab and your apps are instantly reorganized by type using App Store labels, such as reference, productivity, travel, lifestyle, etc. You also can see how many apps you have in each category. To view your apps via filters, use the “sort by” button underneath the “Sync Apps” box. This allows you to filter by name, category, date and size. You can use these filters to get a sense of what apps may be redundant or which may be outdated.

The rest? Well, that is up to you. Because I am a bit of an app collector (and reviewer), I tend to have the maximum number of both apps and folders. My system may not be right for the next guy. My convention is to put a few (not even a full screen) of key apps on the front page – right now, I have Calendar, Settings, Camera, Photos, App Store, Dragon Dictation, my grocery list manager and Messages on the home screen, along with the default dock icons (I haven’t yet modified them, but for sure the iPod icon is getting moved). All my folders live on pages 2 and 3 and all the remaining apps are organized by folder. My folder categories are News, Social, Photography, Navigation, Notes & Files, Music, Games, Weather, Search, Video, Work & Docs, Blogging, Utilities, Art, Finance, Shopping, Messaging, Travel & Food, Books, Contacts and Reference.

I am sure I will refine the system as I go, but this is a decent start. If you haven’t yet begun the process, consider using the “Genre” feature in iTunes to get an overall picture of your app life. Then, let your OCD tendencies run wild!