This is useful for when you would like to have users to log in to your shop with their Twitter or Facebook credentials and for other apps to be able to access your Magento account. After approval by the customer, Magento and the 3rd party webapplication can exchange data. This might give you the option to retrieve the sex and home location when someone connects through Facebook.
Customers can manage the applications under the new My Account > My Applications tab.
If you doubt then please let me know.
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