Dirty Aura

I gave a presentation at the TechStart event of Aalto Entrepreneurship Society on mobile and startups. Why mobile is now an interesting opportunity for a small early-stage startup?

In short, App Store and it’s rivals are solving a distribution problem so that it’s very cost-efficient for a small startup to test an idea, reach users and try to get traction in mobile. This wasn’t possible just 3 years ago, when we started Jaiku. Only reasonable way to get a mobile application to users was through operator or device manufacture deals.

Another interesting opportunity is that new App Store in iPhone OS 3.0 is providing a small payment solution in a user-friendly way. You can build and test business models that have been very difficult in web services as there hasn’t been widely adopted solution to pay few bucks in user-friendly way.

Now, very interesting future possibility is that Apple and others are not actually building application stores, but more general small payment systems. What if iPhone OS 4.0 would provide JavaScript APIs to App Store in-app payment system?

Business, Mobile AppStore, Helsinki, Mobile, payments, presentation, startups, TechStart

Here are slides of a talk that I gave a few weeks ago in MobileDevCamp Helsinki. It’s a modified version of a similar talk that I gave in Slush Helsinki conference last fall.

Talk discusses an important changes that happened in a mobile business in 2008. It discusses what problems iPhone’s AppStore solves – namely distribution and payment problems – and what it doesn’t – marketing. Compared to a talk gave in Slush Helsinki, this version doesn’t include a part discussing mobile web and HTML 5.

Mobile AppStore, distribution, iPhone, MobileDevCamp, presentation, S60

Selling iPhone apps is becoming a new business fad that people make fun of. It’s adopting a role of clown that an ad based model of free web services has held for a while.

However truth is that App Store is nothing short of success. In January Apple announced that there had been 500 million downloads from App Store. Let’s put this into perspective. There are about 17 million sold iPhones. Apple lumps iPod Touch sales together with other iPod sales, but estimates are that iPod Touch sales total 25 million, which means that there are about 40 million sold iPhone OS devices. Thus on average there are over 12 installed apps per device. That’s an astonishing number. On average on every iPhone and iPod Touch 12 applications have been installed just in 6 months.

How many installed applications a PC has on average?
I haven’t done my homework, but my guess is something between 0 and 1. Your guess?

How many sold games there are per a game console?
My guess: 5. Answer: about 6 over a 2 year period.

Heck, how many bookmarks is saved to browser’s bookmarks on average?
My guess: something between 5 and 50. Heavy users with thousands of bookmarks are likely to skew this a bit in a way that no heavy user of mobile applications can skew App Store stats.

Compared to these, 12 installed applications is a very vivid proof of a working ecosystem. Granted, most of the installed applications are free, but the number proves that App Store has connected application publishers and users like nothing before. And this on a mobile device. Just a year ago, a person who had installed a mobile application was either a geek or  16-year-old gamer with too much time on his hands.

The most successful mobile application store before App Store is probably GetJar.com, that has about 370 million free downloads since 2004. Other successful stores have hit about 100 million downloads each over several years. With a success of App Store, mobile applications market is quickly catching mobile advertising as a business model.

Nokia is rumoured to launch it’s own application store at Mobile World Congress in Barcelona. Currently Nokia has a crappy Download! service on S60 phones and N-Gage market on selected models. If Nokia would unify these and duplicate ease of use of App Store for both publishers and users, it has a huge potential. Nokia sold over 100 million devices last quarter. Think if every new S40 and S60 model would have an application store baked in.

N-Gage Market has a silly restriction that games sold through it should be developed in native C++. On N-Gage Industry Insider a potential game developer is proudly challenged: “Think you’ve got what it takes?”. Pardon me, but who the fuck cares in which programming language a game or an application is developed if it’s fun or useful? Nokia has gone to great lengths to support several development environments on both S40 and S60 platforms: Java ME, Flash Lite, browser technologies with Web Runtime and S60 native C++ development. It should leverage this work. Think how many publishers and users Nokia could connect with a well-made appliation store that allows all these technologies to be used.

Mobile ads, AppStore, Business, iPhone, Mobile, Nokia