UPDATE 1: TiPb received a comment from Apple.

UPDATE 2: Chillifresh reports Apple has now removed 5000 sex-based apps and suggest new "rules" are in place.

Developer Chillifresh sent us a link to their blog post where they claim Apple is removing "all non-PG apps" (read: sex-based apps) from the App Store.

Here's the email they received:

The App Store continues to evolve, and as such, we are constantly refining our guidelines. Your application, Wobble iBoobs (Premium Uncensored), contains content that we had originally believed to be suitable for distribution. However, we have recently received numerous complaints from our customers about this type of content, and have changed our guidelines appropriately.

We have decided to remove any overtly sexual content from the App Store, which includes your application.

First, we should point out Wobble has no sexual content in and of itself, it applies a "wobble" graphical distortion effects to any photo you choose to import -- though the app name is certainly suggestive.

Second, it's important to remember that users who've already downloaded the app can keep using it in its current state, although the developers can no longer provide updates (including updates to make it compatible with future iPhone OS releases).

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Third, Apple's already gotten negative press for rejecting apps and removing an entire range likely won't sit well with the "let us decide for ourselves" crowd.

Fourth, sex-based apps have been spreading through several categories and there have been complaints from those who'd rather not see them side-by-side with non-sex-based apps.

So, is there a middle ground where Apple could create an "adult" category all its own, there for those who want the R-rated apps, easy for others to ignore? Or are they right to go the Blockbuster/Walmart family-friendly route, and leave the adult content to join the porn content as Web Apps?

Let us know what you think...