Apps gold rush
There is little doubt that Apple's App store started a phenomenon that has spawned an industry and changed the way we all use our mobile phones.
In the early days, stories of developers hitting the jackpot with a winning app seemed almost commonplace. Today, with increased competition, that crown is harder to win.
But at the same time as the App store continues to grow with over 4 billion downloads, so do other app stores. There is Nokia's Ovi store, BlackBerry, Windows, Google's Android and of course the independent app store operated by Getjar which recently hit a billion downloads.
With around 5 billion handsets in the world, and an estimated 20% of them smartphones, the market looks pretty robust for some time to come. Recent research gives two sides of the same story.
ABI showed that downloads of mobile applications from "app stores" will peak in 2012-13, then begin a slow decline in numbers.
But Juniper Research reported that the "combined revenues from apps funded by pay-per-download (PPD), value-added services (VAS, including freemium and subscription) and advertising is expected to rise from just under $10bn in 2009 to $32bn in 2015".
Matt Murphy runs the iFund at Kleiner Perkins Caufield & Byers, one of the most respected venture capital firms in the country.
The iFund is aimed specifically at developers who create apps for Apple's App store. It was recently increased from $100m to $200m ahead of the launch of the iPad.
"When we started the fund it felt like a greenfield site for every category and today there are over 250,000 apps. It's gotten very very competitive and in some ways that is good and in some ways that is challenging."
Mr Murphy said their focus is on a number of areas including location based services, social networking, mCommerce (including advertising and payments), communication, health care, education, and entertainment.
To date the iFund has put its money behind 14 ventures from the first iPhone-only gaming publisher ng:moco to social gaming giant Zynga and from music discovery service Shazam to Cooliris which offers a 3D interface for browsing vast amounts of rich media.
"I think the analogy of the gold rush where anybody could show up and make a ton of money - I don't now that it's over but it's harder."
He said the fact there are many more players will require a different mindset.
"I think it will create a discipline among entrepreneurs who will say I want to build a big company. I think there will still be a lot of successful one-off apps, where any mom and pop can create an app and monetise it well and do well but to a certain scale.
"They are not going to get rich on it, well they might depending on their definition of rich. But they are not going to build the next Google, Amazon, eBay or Netscape of the mobile internet. As a venture capitalist, we are looking for opportunities that have more of that potential to really break out and be one of the companies you talk about in ten years time.
"I would say everybody can show up and make a little to a good amount of money but it's getting harder for people who say I want to be that really big company. But that's how these platforms shake themselves out."
From Mr Murphy's point of view, those companies who are on the path to becoming big and have set the standard for others to attain include Zynga, ng:moco, Pinger, Shazam and GOGII.
"Take ng:moco. It's really a pure play around iPhone gaming right now and they are the leader in that category," said Mr Murphy.
"This all came from one guy who walked into our office two years ago and said I really want to be this greenfield category. Then people were thinking of gaming and apps as a one off and he said 'let's build a network'. That's an example of what I am talking about."
From Mr Murphy's point of view the ingredients to success include simplicity, attention to detail and having fun.
"Start off really simple with something that every user can resonate with and then over time provide more in the app that makes it stickier - more functionality, more social things. That is what we are seeing with Shazam right now and GOGII which is moving from free texting into groups and communities.
"No one has really nailed chatting communities on the iPhone so that is a greenfield opportunity. But you have to nail them initially with that simple-use case. The people that try to do too much too soon are the ones we have seen struggle."
The iPad has presented a whole new opportunity for developers and for the iFund which was boosted by $100m ahead of its launch.
But Mr Murphy said for those with an eye to developing apps for the iPad, the important thing to remember is that it offers a very different user experience compared to the iPhone.
"If the iPhone is all about the five to ten minute snack, the the iPad is all about heavy media consumption of an hour or an hour plus. Developers and companies that master that are going to do really well."
~RS~q~RS~~RS~z~RS~05~RS~)
Comments
Do you know how many apps on the App Store really hit the jackpot? Of the 225,000 apps on there, what percentage actually got a positive ROI? These figures don’t seem to be available.
Also I suspect your estimate of worldwide smartphone share may be a little on the high side. While smartphones are about 17 percent of sales of mobile phones, the share of the installed base will be much smaller than that baring in mind that most people won’t change their phone more than once every 1-2 years.
It’s also worth noting that even the optimistic Juniper report goes on to say “But while Apple’s App Store has achieved app downloads on an unprecedented scale – 4 billion by April 2010 – the report cautions brands and developers against ignoring users of other platforms/handsets. According to Juniper, such a move could be counterproductive, particularly in developing markets, where the user base of iPhones (and indeed smartphones per se) is extremely low.”
You appear to be suggesting that instead of focusing on the iPhone which has a 2-3 percent worldwide share of phone sales. People should focus on the iPad, which is even more niche.
If you look at the independent app store all the most popular apps are cross-platform, covering at least four platforms. Some are not really download apps at all they are Web apps which will work on any phone with a browser and java.
Facebook didn’t get to 150 million mobile users a month by focusing on one niche platform, now did it?
There's an interesting interview with GetJar here: http://mobithinking.com/getjar
The mobile stats come from here: http://www.mobithinking.com/mobile-marketing-tools/latest-mobile-stats
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Summary: Apple created the app store. Lots of people buy apps. There is a lot of money in it but not as much as there used to be.
Utterly useless drivel, about iPhones once again.
I mean really Maggie, this blog is a joke. Why are the BBC still paying you?
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A pretty bland and uninspiring blog on a fairly tired subject. If you wanted to talk smartphones, you could at least have discussed jailbreaking, thereby providing a subject that can allow a discussion. Or Android sales overtaking those of iPhones, or is that not allowed under the BBC rules?
There is so much more going on in the world of technology and you choose to ignore it. Looking at the 'Topical blogs in this post' section at the bottom of the page, I can see that 3 contain the word Apple (as a company as opposed to the piece of fruit), as well as this one containing App. BBC impartiality has been thrown out of the window here.
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Tomi Ahonen's blog on app stores is a must read for anyone who thinks that being an app developer is the road to riches because quite honestly the vast majority would be better off investing the time in training as an office teaboy because it pays better.
Apps are a fad with the possible exception of some games titles. There are about 12-20 apps available on any platform in a number of guises that most people will use. The rest are chaff.
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Am I the only person who reads the title of this blog as "Dot dot Maggie"?
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i don't why VC's are focusing so heavily on the "killer app" when apps are basically the new website. what they should be focusing on is the next google in the mobile internet world. the best site out there now for cross platform mobile app and content search is: http://www.mimvi.com
regardless of whether you have an iphone, blackberry, android etc., this is the place to go--loads better than getjar which is basically an app store (not a real search engine)--mimvi is the google of the mobile internet...
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Started a phenomenon? What do you mean they invented apps? They invented the smart-phone? Or merely a phenomenon that the BBC insist that Apple products are the only way forward for developers? What about the even more 'phenomenal' open source communities, or the whole range of other tablets that use proper full existing superior softwares to apps.
I am quite happy with my open source platforms and unlike Apple I am not confined to money making as I can install non-market applications of which there are an unmeasurable quantity.
I am sorry you can link to the Apple app store as much as you like Beeb, they have my license fee, much to my annoyance, but they are not getting any more money from me.
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BORING... same old same old but does the BBC act on it?
[sound of crickets]
Cushy little job, for Ms. Shiels.
A decent writer would give their left arm for a spot like this to really dig into the valley - Maggie just gives us the same old drivel.
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Oh dear, Maggie. After a refreshing change - the 'Steelie Neelie' blog, its back to the usual suspects and its boring, boring, boring.
Do you actually stay in silicon valley? If so, why don't you check out Mozilla, AMD, Tesla or LynuxWorks?
Enough already of Apple, F'book and tw*tter.
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Wow, yet another blog article on Apple. I didn't see that coming...
There must be so many new innovative products being developed in Silicon Valley which are far more worthy of the license fee. To be honest, I'd rather have a correspondent based in Japan writing blogs on new technology coming out there than this.
As I've said before, I'm not anti Apple and have a macbook and ipod touch. I even use the app store on my touch and have recently downloaded the BBC News app! What annoys me is the feeling that our license fee could be better spend on articles which look beyond the narrow confines of Twitter and Apple. The BBC has a duty to be impartial and I think that this blog is failing in that duty.
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@7 - I think the rise of the small-footprint 'app' occurred in a number of places, with Facebook etc getting the drop on Apple. The only thing Apple did which is unique is to get users to pay for them. So I guess the phenomenon is in finding gullible people to pay for lots of pointless wastes of time.
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> So I guess the phenomenon is in finding gullible people to pay for
> lots of pointless wastes of time.
The one thing that Apple excels at :D
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glad you've finally decided to cover apple in your blog.
seriously though, stop already.
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Apple products and services again, just like Chinese water torture!
Curious, Maggie doesn't appear to reply to any of the posts, unlike other bloggers on the BBC site.
Maggie, why don't you cover other platforms in the same detail? Jailbreaking arena? No? The BBC will make sure they continue to push Apple products here and in their shows.
I use Apple products, but also use Microsoft and Blackberry products.
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that'a a very good point - Maggie, what is your defence on the matter of continual name dropping of twitter and apple? - Are you receiving backhanders for every mention?
Go on, give us a laugh.
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Ignore the Professional Apple Haters, Maggie, they're probably paid by a rival company to dis Apple any chance they can (and yes, such people DO exist: go and get a real job, guys).
The article is not about Apple, it's about apps. But seeing as Apple are a big player in the apps market, an article that fails to mention them would be seriously deficient. Had Maggie avoided mentioning Apple, there would have been a dozen posts saying "Wot? No Apple?" Poor girl: she can't win...
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@Graphis
Although some of these comments are a bit over the top I do hope you're beign a bit toungue in cheek when you suggest that there are professional Apple haters. There are plenty of unpaid fanboys and anti-fanboys without the need for any money to change hands I think you'll find.
That aside, were I Maggie I wouldn't be ignoring the opinions of my readers. Of the 16 comments so far only five refer to the article, nine to criticism of Maggie's coverage and one is a somewhat fanboyish whine.
Apple are old, tired and boring. When you start getting rated as 'cool' by the same people who rate Big Brother as cool then it's game over.
I think the media are starting to realise this. Well those who want to keep their jobs are anyway.
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Twitter, Apple, Twitter, Apple, Twitter, Apple, Twitter, Apple!
Please post about something else. Android taking over iPhone? The state of Java and Open Source now that Oracle have taken over Sun and are suing Google and dropping OpenSolaris, Disney et al being sued for the use of so called 'Zombie Cookies' even with minors. There's a few for you to get going on.
Please find something else to blog about, its getting embarrassing!
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Mark@17
No, I'm afraid it's correct: I knew someone who did it. They worked for some little PR company, contracted out to a bigger one that was employed by Microsoft. Of course, no trail back to MS, and I doubt MS even knew it was going on, and probably wouldn't sanction it if they did. But this guys actual job was just to sit there, day in, day out, joining forums, posting on blogs, anywhere he could find, some sort of whine about Apple's latest product/service/OS or whatever... he had to submit the links to all his posts to his bosses in order to receive his pay, which I think was around £12 per hour at the time... ironically, he worked on a MacBook LOL.
Even you could be one, with your carefully worded measured tone... before launching into "Apple are old, tired and boring" and then issuing dire warnings that journalists who write about Apple will lose their jobs! How ridiculous! Apple are a big company that make a lot of stuff that a lot of people like: deal with it. If you don't like their stuff, why waste your life whinging about it? (Unless you're paid to, of course). Do you have any idea how sad that makes you look?
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@Graphis
Your tin hat is slipping. Might want to sort it out.
Incidentally, why are you writing favourably about Apple unless you're getting paid for it?
LOLdiducwutididthar!11!!1
As for not liking their stuff, I own and use a unibody Macbook thanks. What I don't like are shrill little fanboys or the over-hyping of an increasingly dull multinational consumer goods company.
Simples.*
*This comment was not sponsored by any plains dwelling members of the mongoose family. Just to be clear there - wouldn't want any old lunatic thinking I was being paid for this after all.
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@Graphis
Your claims are absurd and far fetched.
We're commenting on the coverage of Apple and Twitter on this blog, not dissing Apple or Twitter - Even avid apple users have said so in comments in previous blogs.
What is interesting is how you (the typical fanboy - yes you've been pidgeon holed) automatically jump to the conclusions that anyone who has a negative to say about Apple must be a MS lover - Aside from the fact that many Mac users have ditto'd our stance here, I use Ubuntu, I guess that must mean that Canonical are paying me to write comments up here no?
Open your eyes big man.
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Touched a nerve did I folks? :)
None of you seemed to actually read my posts: I wasn't writing favourably about Apple: nowhere in these posts have I said that 'Apple are great/better than X' etc: I was supporting Maggie's decision to mention them in an article about apps, which seems reasonable to me, unlike everyone else who only see the word "Apple" and a sort of red mist descends on them LOL.
I didn't jump to any conclusions about anyone's feelings regarding MS. I simply stated the reasons that my acquaintance was paid to do the work he did (His name was Jerry, by the way: it would be unfair to substantiate my statement further without his permission: besides I don't really care).
YOU may be commenting on the coverage of Apple and Twitter: I was commenting on the lack of relevance of your posts to the article above.
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Well this is going to be another irrelevant comment to this article.
It seems that many are bothered that Apple is keeping themselves to themselves with their apps and itunes and so on. Oh well, that's business. They seem to have forgotten about Microsofts monopoly, while it is still the biggest player.
Apple make computers that work, are easy to set-up, easy to update, easy to upgrade, easy to use, a joy to use, and you can use windows on them as well.
Windows 7 is still clanky and does not feel as smooth as an apple operating system in its general operation, although it is much better and faster than before.
At work I use both 8-Core Intel Apple Mac Pros and their PC counterparts. Macs are still easier and nicer to use, it takes a fraction of the time that you would spend on a pc to set them up for particular applications, and they are faster despite having the same or lesser spec. In fact it feels like MS would have to start Windows from scratch to make it as smooth in its operation, or maybe give it a different name as well. It's like using an old horse cart, revamped with a porshe shell, it is still a horse-cart inside.
Those notification icons at the bottom right popping up balloon messages have been annoying for as long as I remember them but hey you can't escape from them.
As for this blog...apple apps are ok, they are basically the same as widgets that you get on both pc's and macs. So much talk for nothing really. Someone would use 4-5 apps regularly like currency converters, weather apps, calculator, computer stats and so on, the rest is just junk basically. The fact is that until you get a proper mac operating system on the iphones, they are not as good for the technically minded as other smartphones, although they do what they do in style and look good.
The fact that macs are easy to use but also look nice, which they do undeniably compared with the plastic cases of most pc manufacturers, and which makes them desirable to anyone,that's Apple advantage.
It's all about the experience and ease of use. Everything seems to be easier on Apple products, getting apps, taking photos, or anything really. You pay more for something that will last longer and that provides you with a lot of pleasure and does its job nicely in the meantime. I'd suggest to anyone who does not mind not having much expandability to get an iMac. They fly!
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"Apple make computers that work"
Mostly.
"are easy to set-up"
Yup.
"easy to update"
Unless you're foolish enough to try iPhoto on Snow Leopard or Nokia Media Manager or all the other bits of software that fall over and cause the spinning beachball - like Open Office for one.
Then there's that whole rebooting when you upgrade the browser thing. That's annoying.
"easy to upgrade"
No better or worse than a decent PC to be honest and considerably limite din terms of what you can upgrade.
"easy to use"
Yup... apart from the aforementioned problems.
"a joy to use"
Yup. Pretty much like any high end machine.
"and you can use windows on them as well."
Sure... if you like the horrendous battery life and the admission that you failed to buy the right OS in the first place.
"Windows 7 is still clanky and does not feel as smooth as an apple operating system in its general operation, although it is much better and faster than before."
Subjective. It doesn't boot up as quickly or shut down although the difference is inconsequential. The Network page could do with a bit of work as well. Apart from that it's much of a muchness and Windows runs more software which, after all, is the primary function of any OS.
"Those notification icons at the bottom right popping up balloon messages have been annoying for as long as I remember them but hey you can't escape from them."
You can switch them off in Windows 7. I don't think they're any more annoying than the Software Update icon or Google update grapes I get on the Mac though.
"Everything seems to be easier on Apple products"
I can't say it is to be honest. It's no better or worse but the limited software is a pain and there are compatibility issues with some third party software packages. Mind you the latter is true of Windows too.
"getting apps"
Sorry, I don't get this one - there are far more apps for Windows than OS X. Are you talking about the install to Applications folder (the drag accross) and Eject of .dmg process? It's not any easier than using an install wizard.
"taking photos"
iPhoto is horrible. Sorry, but it is. Picasa is considerably better.
"or anything really."
Well, no. Firefox on my Mac has problems with embedded Flash video (this may be Mozilla's issue, not Apple's), the settings menu is a bit odd and the iLife suite is a pain in the tits to use unless you're coming from an Apple device.
"You pay more for something that will last longer and that provides you with a lot of pleasure and does its job nicely in the meantime."
Absolutely. That's not always a Mac though.
"I'd suggest to anyone who does not mind not having much expandability to get an iMac. They fly!"
Definitely the best all-in-one out there if you accept the software limitations.
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Mark_MWFC
In terms of upgrading I meant the software
There are obviously limitations on components you can put inside.
Ok it might take a little while for someone coming from a pc background to get used to new user interfaces and apps.
Don't get me wrong, I agree also with many of the things you point out, but that depends on how you set up your mac and having the latest upgrades for OS and software.
I work as an engineer setting up mac and pc's in professional video production and editing environments. I find macs from personal use and at work easier to set up.configure and nicer to work with despite certain limitations in software availability and expandability in terms of graphics cards and other components. At the end of the day man you can have windows on them and Linux and you can do whatever you want.
I am not a mac fanatic, they are a tool to me and seem to be doing their job nicely, mostly smoothly, and with very good performance.
Win 7 is a big improvement in response and performance though.
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I am not getting paid either....maybe I should be...mr Jobs??
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In reference to BonScott, I agree with you in part. For video and image editing on a professional level, a Mac is usually the best option. The trouble is, when you (and people in general) compare PCs and Macs, they think about the cheap end of the PC market, which isn't really a fair comparisson. Looking at it from a more balanced point of view, such as in terms of cost, an Alienware laptop is probably a closer call to the likes of a Macbook Pro. And lets face it, they are aimed at totally different markets, with the Alienware focusing on pure performance, where it clearly outperforms the Mac. The same can be said for the desktop arena. Most desktops that can be seen as a fair comparisson to a Mac Pro, or even and iMac in terms of cost are actually the high performance gaming rigs, which are aimed at different market altogether. My homebuilt desktop is not made of plastic either, being a nice silver aluminium case with a snazzy window in the side. Under £800 and I can play Crysis in full HD on high settings. To get that kind of performance from a Mac (discounting the software compatability issues) I would have to spend considerably more. Don't get me wrong, I am not a loyal Windows user by choice (I follow wherever the games go, so if the Steam move to Linux is successful and other companies follow suit then I'll be there in a flash) but I think that some people are too quick to discard one system over another. Back on topic, and in partial response to Graphis's comments, yes there is money to be made if you produce a 'killer' app, but I think the key point of other user's comments is that whilst this is all fine and dandy, the subject matter always seems to either have Apple at its core, or just focuses heavily on Apple. There wouldn't be these comments if this blog had some variation, but it doesn't.
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My opinion is that ICT companies think about money. Where is the social responsibility from ICT companies? Back in the days ICT students learned ethics and outreach but nowadays? Is there any ICT company that still reaches out and adheres to a clear set of ethics?
Then there's the question of 'entertainment' and 'expression'; where an honest artist or musician selling a compact disc or a piece of art becomes less entertaining than downloading for free, playing bloody games etc.
The attitude of keeping people online and having them pay for a general technology that should be well integrated instead of sticking them to their computers, -mobiles and -workstations has become too prevalent. This so called 'sticking applications into applications' is a rogue method through which companies think they can generally create customers with neural network processing and making them dependent.
by collecting souls... and people are selling their soul...
Instead of thinking 'goldrush' one should think 'responsibility'. Instead of thinking 'entertainment' we should think 'expression'. Instead of 'infinite bandwidth storage' we should think 'freedom of information'. Instead of going for 'social people applications' we should go for 'people process integration'. Instead of 'features' we should develop 'standards'. Instead of creating 'dependency' we all should think about 'interoperability'.
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@Bon
I agree with a lot of what you say. My main point is that, as a user of both platforms, I find there are pros and cons for both.
A few years ago I would have said Macs were better generally but that gap just isn't there any more.
That said, it's down to what you're using them for. I've yet to find a nicer browsing and media management machine than the Macbook once I got iTunes set up. Similarly I've yet to find a machine that does the heavy lifting as well as my Quad Core MESH running Windows 7 at the same price point.
Horses for courses.
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