premise: Xbox 360 applications are non-game software applications designed to run on the Xbox 360 platform. Xbox 360 applications can either be stored on the console's hard disk drive or on a USB flash drive. Often, an Xbox Live Gold membership is also required to access some applications, as well as subscriptions correspondent to the applications. Some of these applications are country specific.
hypothesis: Xbox 360 applications do not need to be stored on the console's hard disk drive.
reason: Actually, Xbox 360 apps can either be stored on the console's hard disk drive or on a USB flash drive. "OR" fooled the model.