Saturday, May 16, 2009

iPhone success: browsers, then apps

Last month, I visited the Quello Center for Telecommunication Management & Law at Michigan State University. I was invited to speak by center co-director Steven Wildman, who I met last summer while presenting at a USC-sponsored telecommunications conference.

We debated what I should present. In the end, I chose to present iPhone paper I’ve been working on with Mike Mace, because it’s almost done and the visit would act as a forcing function.

It was a great choice: we had 35 people in the room — a few faculty, but mostly students. I was told was the most ever for a Friday lunchtime talk (but perhaps because some students were behind writing up seminar reports.)

I’ve posted my slides at — my first posting there ever. (I joined the site after I saw speakers use it at the O’Reilly Web 2.0 conference in March.)

Since readers can see the slides, let me just summarize the argument in short form. Most people think of the iPhone as a success because of the app store. However, the app store was part of iPhone 2.0, and the success of iPhone 1.0 was based on a simple core idea: deliver the “real Internet.”

There are plenty of anecdotes to show that the iPhone succeeded in changing how people think about mobile browsing. Clearly iPhone users browse more than owners of other smartphones (at least in North America), as Google discovered in December 2007, and as AT&T is finding as it seeks to keep “all you can eat” from destroying its 3G network capacity. We are trying to come up with more systematic data.

I gave the talk the day after Apple reported that it had achieved 1 billion downloads at the app store. For my talk, I tried to briefly classify the most popular applications, but I was tentative because it not clear whether Apple’s “top paid apps” and “top free apps” were worldwide or US. (Tech Crunch has Mobclix data that is a little more useful here).

Clearly the top 20 paid apps are all games or other forms of entertainment. The iPhone/iPod Touch is a hot gaming platform with has many satisfied developers. The iPhone scores points both for an easy-to-use SDK and also for its convenient distribution channel. This is mostly the “kill a few minutes” casual gaming audience — such using mom’s iPhone as a video pacifier. But the units are rapidly gaining on the Sony PSP if not the Nintendo DS.

Some are concentrating on the direct revenues to Apple, i.e. from paid apps. A lot of estimating the number of paid downloads depends on the assumptions of the ratio of paid to free downloads, as the Apple 2.0 blog at Fortune noted last week.

(I thought I saw an article around April 23 that noted actual unit sales for some of the top 20 apps, but I have been unable to find the article. Does anyone have such an article.)

However, what I found interesting was the free apps. Sure, there are some freemium offerings in game and entertainment. But there were also iPhone versions of some of the most popular wired Internet apps — Facebook, MySpace, Google Earth, the Weather Channel.

If the iPhone is heavily used for the same thing as the wired Internet, that means it will make progress on substituting for the wired Internet. I’m not ignoring all those motion-sensitive games (or location based services) designed just for the iPhone — only concentrating on evidence where the iPhone is compelling enough to get people to drop (or ignore) their PC.


Doug Klein said...

I'd be skeptical of making a generic comparison of the free apps with the wired internet. Some (e.g., Facebook) make a lot of sense for mobile. Others don't. The real data point you're looking for is re-use. The initial fascination of loading everything and anything is still high - how many of these apps get used repeatedly? Or do they really all suffer from the Twitter problem (everyone signs up, few stick around)?

Joel West said...


Of course you're right. With free apps, the download metric doesn't tell us much.

Still, I was interested to note that most of the apps were either application services as on the PC (like Facebook), or games. 25 years later, the mobile Internet is sounding like John Gage's old slogan for Sun: "The network is the computer."


Randy Kirk said...

Interesting that none of the mobile applications were related to finance, tracking bank accounts, investments etc.

I used to work at a bank in which they focused a lot of attention on "mobile computing" -- finance related activities comprise a significant percentage of PC related internet use, but for mobile devices, its pretty minor, was at the time (4 years ago) and still appears to be nowadays.

Really it seems the screens are too small on mobile computing to get people tracking stocks, bank balances etc on them.