WorldMate CEO blog – Nadav Gur

Friday, January 2, 2009

iPhone, iTunes, iFart - A case of the tail wagging the dog? Or is this a cat?

First, we heard of the dozens of millions of applications downloads on the iPhone - as soon as the AppStore was available. Then, it was "100 Million Apps in 60 days". Then, comes what happens when you have such a big pool of active and dynamic primordial soup - the creation of life, and continued evolution. Culminating in the gem of creation itself, the most lucrative, top-ranked download for iPhone - iFart.


So is iFart a unique phenomenon, or is this the norm?

As of today, the top Free apps on the AppStore are 5 games, 2 gimmicks (Lightsabre and Flashlight), and the Facebook client. Top paid apps? 6 games, gimmicks (PocketGuitar, Koi Pond, Face Melter) and an online radio client.

Merriam-Webster defines an application as "a program (as a word processor or a spreadsheet) that performs one of the major tasks for which a computer is used".

Games, gimmicks, iFart, "... the major tasks for which a computer is used." Is this what Apple had in mind?

If I was an iPhone cynic, I could have said "QED" and be done with it. But I guess I'm not. So what is going on here? How does this reflect the iPhone market? What does this mean for iPhone application developers?

First, there is nothing new here. Back in the late 90's, Palm software websites like palmgear.com and palmcentral.com (later renamed Handango) were initially dominated by similar applications - gimmicks (remember Mirror? or our own FanMate?) and games - including some great ones like Bejeweled and Vexed!.

Those sites were managed very similarly to the current AppStore - Top 50 Downloads. What this meant was that something that a gimmick that appeals to a lot of people and is viral, is free, and happens to come to the market early on - will rise to the top and remain there. Later, because the Top 50 Downloads chart prefers applications with a long history - it gets extremely hard to stand out, no matter how good your new application is. The "Top 50 Monthly" was a slight improvement, because if your widget was very good, it could outshine those "older" widgets.

But is this a good business eco-system? It's a system that prefers small, easy-to-understand gimmicks, that are priced at 0 or something close to it, over anything that is more complex or pricey - but has lasting value. Guess why all the top-seller iPhone apps are $0.99? What makes a Best-Selling iPhone App? - according to TIME , a best-selling iPhone app - is a $0.99 gimmick.

Is this good for the iPhone? Initially, probably it is. But over the longer term? I don't think many Light-sabre or iFart users are very excited about those apps a week or a month after they've downloaded them. And this type of experience wears off pretty quick - unless you're a teenager. Remember Facebook apps, not so long ago - the next big thing?

And in a parallel universe - we have WorldMate users who've been with us since 2000...

This goes back to the dilemma facing serious application developers when faced with the iPhone. On the one hand, it's obviously an extremely popular smartphone platform, whose users are indeed focused on downloading stuff to. On the other hand - it seems like the vast majority of them are downloading entertainment / personalization stuff, not "real" applications - Personal Productivity, Utilities, Business Apps etc. Furthermore the AppStore has a built-in preference for tiny little snippets of value (entertainment or otherwise) that will be consumed and forgotten, over more complex products that may cost more and appeal to less people, but will provide significant value over a long time. The App Store is a one-size-fit-all - comparing downloads, not volume of use, and units, not revenue.

So do we want to be a gourmet restaurant in a fast-food court? How do we market in such a marketplace?

I'd love to hear your suggestions!

- Nadav

Late addition:

Many interesting articles sprouting up. One of them - Financial Realities of the App Store

17 comments:

A friend said...

As long as I get my itinerary and then my trip alerts on my iPhone, I don't really mind.

Actually if you guys sell this for $100 a year - this may bring you the marketing you need -there'll be a buzzzzzz about "The most expensive iphone app in the world".

But seriously - a high price suggests higher value and differentiation from the low quality apps out there - from seeing who's carrying iphones in the big cities, seems like there'll be enough happy customers for the worldmate live app.

AdamSKI said...

Maybe just use the app store for what it really is, a great distribution and update function and continue to market the application just as you do now via your website etc.
People like Remember the Milk (only $25) do this.
I, as a former worldmate subscriber would happily pay what you charge for BB devices.

Anonymous said...

I can't say enough about your service, having been a recent Gold member. I travel frequently and the program was a great resource when flights ran late or were canceled. Having switched from a BB to an iPhone, this is the one app I definitely miss. I know quite a few business travelers who would love to see this ported to the iPhone and and would not hesitate to upgrade to Gold Membership.

I agree that there is quite an excessive amount of useless chaff in the app store, but there is nothing that comes even close to the features provided by WorldMate. The same business model that you currently use would certainly work for the app store. There are quite a few of us out there who struggle to find quality productivity apps that meet our business needs.

My 30 seconds are up.

Anonymous said...

While the **** floats to the top at the iTunes App Store, there are a fair number of genuine application there, some of which are professionally oriented and are expensive or require extensive subscriptions. I believe WorldMate would do very well there as there is no comparable product and there are already many iPhone users who are familiar with it. I don't see why Worldmate would get lost in the shuffle of the App store. You will make plenty of sales.

Anonymous said...

I think you do need to be on the iphone platform. I agree with your discussion of the natural progression of these things, but we are seeing more and more business use. Our company actually supports multiple platforms and we are seeing more demand for iphone. The only close equivalent is FlightTrack Pro which syncs with TripIt. However, this is starting to see more and more downloads/use. I think WorldMate would compete very favorably against it.

Anonymous said...

I really need WML on the iPhone. It's one of the main things I miss about my Blackberry. If you make an iPhone app, it's one I would surely pay for. I'm pretty sure there are many out there who agree.

As the use of iPhones continues to grow, I think it's something you can't ignore. If people are willing to pay $.99 for crappy apps and odd sounds, imagine what they would pay for an app that is actually useful and works wonderfully like World Mate Live.

NoName said...

Nadav, if you read the book Who Moved My Cheese, you should understand that your target market is adjusting based on their preferences and not based on what you want. Sad, but true. Marketing iPhone application, as my company learned, is not something that the AppStore will do. Is is something that you do. You use the same channels as you used before, like websites, etc. Considering the face that you are allowing free download for the regular service for BB, you can look at the 0.99 as an additional income to cover the development costs and the Gold is a service anyway, not a product.
I was like you and I refused to listen to my employees until I gave up, and I am glad I did. We are currently selling some applications (business by nature) that we used to allow as free downloads and the numbers are almost the same as they are on other platforms, regardless of the price. It seems that people trust the AppStore to 'sort' the application for them and feel secure buying from the store.
And that was '60 seconds' on why to sell for iPhone:)
Good luck.

Anonymous said...

WMLive is perhaps the only BB software that I truly miss, after switching to the iphone. Your service is in fact perfectly suited for the iphone platform and many iphone users. I think it will open up a whole new target clientele as well.

Jim said...

I agree with all the anonymous comments. Plus, you have to trust that most of your users are probably sophisticated enough to skip the iFart app and download WML. It was a great app for my BB, but now that i'm using an iPhone, i'd love to have it on this platform. and yes, i could see your user interface working well with the iPhone.

Chad said...

While I don't travel enough to warrant maintaining a Gold membership - only once or twice a year - I truly enjoyed WML and recommended it to all of the frequent travelers at my college.

I moved from a BB to a G1 over the weekend, and I've been able to find equivalents to every BB application - except WML. It's probably the one app that I think needs to be ported to Android and the iPhone ASAP. Using the Web interface is passable, but not a long term solution.

The fact of the matter, more and more executives and frequent travelers are moving from BB and WinMo devices to the iPhone. I think the same will be said once more Andoid devices hit the market. This is strictly my opinion, but I think ignoring these markets is foolish and short sighted. Even if WML wasn't on the respective download markets, it's apparent that the success of WML on BB and WinMo- which are just starting their respective markets now - is not a barrier. The top downloads in the iPhone market should not be seen as a benchmark of it's usefulness.

By the way, I wouldn't call the flashlight application useless. A few nights working really late make it very useful when you can't turn on the lights without making one's spouse extremely angry.

Alex said...

Dear Sir,

I think the best way is making the software free of charge and then have a possibility to have certain services free of charge and to have all functionality there is a charge so you can bypass the app-store.

There is an application here in Switzerland for icehockey score for free (with a two day delay), but if you like to have the score directly this costs CHF 99.00 per year (around EURO 80.00).

This is to overcome the cheap reputation of the app-store.

Dan said...

I am in agreement with what others are saying here. Although a current Gold user I just picked up an Ipod Touch. It won't have real time access to flight alerts but just being able to download my itineraries to my iPod would be great.

What is important for you to know is that I don't have games or gimmicks on my ipod touch. I connect to my corporate exchange server. I am anxiously waiting for the release of Pocket Informant which will give me a serious task management tool. And I use it to monitor my stocks and news from my competitors via an RSS reader. Other than that I use weather.com, USA Today for news and a wifi finder which is handy not only for my ipod touch but also when I need to get online with my notebook. And my ipod touch displays MS Office files and pdf files far better than the various PDAs and Smartphones I have had in the past.

You are right that many use the ipod touch for entertainment. But that does not make it a good platform for business apps. So please get off your high horse and port WM Live to the ipod touch. Until then I will look elsewhere.

Virgil said...

I understand the limitations of the iPhone SDK. Even considering I would have to check for flight alerts - I would buy this in a heartbeat. I miss WMLive - as a former Gold subscriber - and hope that you release it on the iPhone platform.

I subscribe to ePocrates - which is a medical application. It's free on the App store - but to get all the bells and whistles it's over a $100 a year. So other applications face the dilemma that you are facing and have adjusted in a way that has made both them and the users happy.

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