Software Makers Get an iPhone Bump
It has been widely reported that iPhone owners use data connections to surf the Internet more often than people with smartphones that have built-in browsers. Indeed, flat-rate data plans, a bigger screen, and a near-desktop quality Web browser along with the ability to connect to multiple networks (3G and Wi-Fi) are all contributing to the heavy Internet usage on the part of iPhone owners.
Now the very same dynamics are working their magic on all those applications that were made available at the iTunes App Store in July alongside the launch of the 3G iPhone. Demand for iPhone apps is so great that their makers are getting what could be called an "iPhone bump"—where the release of an iPhone application boosts the fortunes of a mobile application maker overall. The impact is going to be even more pronounced for mobile software makers that had previously been selling to other platforms.
This realization came on the heels of a long conversation with Andrew Fisher, chief executive officer of Shazam, a London mobile music software maker that's a little over four years old. That's how long it took to get his music-recognition application into the hands of some 20 million mobile users in 60 countries.
The software lets you hold up the phone to a radio to have it figure out which song is playing; it then helps you get the track from one of the music download stores. On average, the app was getting used between three and five times over the life of a cell phone.
A Sudden Rise
Then came the iPhone. In the 10 weeks since the app has been available for the iPhone platform via the iTunes' App Store, it's been downloaded 1.5 million times. The result has been some 20 million "calls" from the app to Shazam's servers—indicating that people were using it to look up between two and three songs every week.
Shazam experienced an iPhone bump. And Shazam is not alone. An increasing number of startups are seeing a sharp rise in their user base due to the iPhone. Take fellow London startup Truphone, maker of mobile VoIP services. Since 2006 it's been offering up a way to place cheap long distance calls using the Wi-Fi network instead of more expensive mobile minutes.
When I spoke with Truphone's chief technology officer, Alistair Campbell, last week, he told me that Truphone for iPhone now accounts for about one-half of the total number of Truphone users. And while he wouldn't disclose the total number of downloads, he did say the company is focusing more of its resources on Apple's platform.
That's probably a good idea. Shazam's Fisher, a veteran of the mobile industry, thinks there's a larger strategic implication of the iPhone bump: A bigger installed base that is more engaged with the device means that companies such as his can take the concept of mobile advertising more seriously (http://gigaom.com/2008/09/08/is-iphone-the-next-ad-frontier/) and think of it as a relevant revenue stream.
AdMob, a mobile advertising company based in San Mateo, Calif., is already seeing a big jump in the number of ads it is serving on the iPhone—about 103 million in September vs. just 35 million in August. Apple's iPhone is already the fourth-most-used device through which AdMob's ads are accessed in some form or other—a good proxy for application developers. And perhaps an indication of where companies will be looking to place their ads (http://gigaom.com/2008/10/12/dude-wheres-my-ad/) throughout the economic downturn.