Smule, the developer of the first app—called Ocarina ($.99, available here)—that turns the iPhone into a musical wind instrument has launched a contest to find the best and most creative Ocarina players. It is backing the contest with $10K in prize money

Ocarina enables users to blow into their iPhone's microphone to generate music. Players hold down a combination of holes to change pitch or tilt their iPhone to alter vibrato rate and depth.

The company's posted an invitation for the contest here at YouTube, where players are encouraged to post performance videos. Prize money goes to the top ten performers, based on YouTube ratings and reviews of the videos. See here for details and contest rules.

Smule says it hopes to "showcase some truly great performances, as well as discover some extremely creative and possibly wacky demonstrations of the Ocarina's expressive nature."

The contest ends on Friday, January 9th, with winners set to be announced the next day.

In related news, Smule updated Ocarina to version 1.2 today. Now users can record and share their performances with others.