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

Location Based Hotel Booking

Well, the news is out, we now have location-based hotel booking in WorldMate Live both on mobile and on the web. The great thing about it is that it's so easy to explain. I was at a meeting with a VC a few weeks ago, and we were talking about online booking, and the guy says - "you know, I never have to do it, I just tell my secretary - find me a 4-star near the meeting, and it's done".

So in essence - that's what we launched. "Find me a 4-star near my meeting.". The meetings are there, the hotels are there, they're all laid out on a map, and hey presto! You got what you need. Try it. I'd love to hear what you think.

CEO Blogging and the merits of the common flu

Yes, you got it. I am home with the flu. So suddenly the blog gets some attention. And I expect that if you track other CEO's blogs, and see sudden spikes in creativity, it means something similar. That is, of course, assuming they write it themselves, which is this case.

WorldMate Live on the BlackBerry Storm and the Storm vs. iPhone debacle

Last week, we released a version of WorldMate Live that supports the latest BlackBerry Storm. This is probably one of the first "real" Storm apps, i.e. one that works with the new touch-based user interface and was customized especially for the Storm, rather than an existing BlackBerry app that runs in "compatibility mode".



Of course, everyone asks me what I think of the Storm. It looks like the pre-release campaign was very effective. I was presenting at a conference the other week, and while I was backstage with my BlackBerry Bold in hand, one of the secretaries asked me "Is that the new BlackBerry Storm?", I told her it wasn't, and the Audio equipment guy tells her "it can't be, they're only releasing it on the 21st...". So if average Joe audio guy can recite your launch date, it probably means you got some people excited. The question is - how will they react to the actual product?

Well, a couple of weeks later we have some Storm lovers and many Storm bashers... Just google "BlackBerry Storm vs. iPhone"... Everyone is there to tell you that product A rather than B is the right one. Or vice versa. Furthermore, many reviewers are citing the Storm's software issues as its drawbacks.

This is naive. First, the notion that there's a "one size fit all" in a market with over 2 billion customers is just silly. Second, it is clear that in its race to release a product before Christmas, RIM has cut some corners. This happens very often (including to Apple), and is later fixed with over-the-air software upgrades, for instance. Why do you think the stock was depleted in 48 hours? Did RIM really not expect for the device to succeed, after the concerted marketing efforts?

In my mind, RIM had a situation on its hands. On the one hand - the shopping season is beckoning. On the other, the product is not yet 100% ready, and the main competitor's product is probably on the top of many people's Christmas lists. The Storm competes with the iPhone more than it does with the Bold - so whatever can be done to delay decisions, shift demand to RIM's product - is good for RIM. And that's what they did - early pre-announcement and consumer-focused campaign, got many people in the Storm camp. But wait - there's a risk. Cause if the product is a flop just because the software wasn't ready (and could have been - had you waited 6 weeks or so) - the backlash could be devastating, harm the product in the long term.

Well, did they make the right judgement call? Too soon to tell. Personally I believe the Storm software will see both glitches removed and user interfaces improved over the next 3 months. When they are, it will be a kick-ass device. Not as good for an e-mail intensive user as the BlackBerry Bold, but better than the current iPhone, for sure.

And WorldMate Live on the Storm? Just like the Storm - will get even better in a month...

WorldMate Raises a Round of funding from the BlackBerry Partners Fund and Motorola Ventures

Last week, we announced our recent round of funding, led by the BlackBerry Partners Fund. Raising money in this day and age is of course a challenge, and we're glad (and relieved) that we have completed this round. But it was as important to us to raise it from the right people. In fact a few months ago we rejected a bird in the hand (from a notable VC) for this bird on the tree, at significant risk. The reason we did this was simple. The BlackBerry Partners Fund is a fund with a real vision for the mobile internet, led by people who totally "get it". That to us has significant value. On top of that, RIM (RIMM) is a limited partner in the fund and has an open dialog with them. If you follow this blog you probably know what we think of the BlackBerry platform and how our vision is intertwined with theirs. So getting up-close-and-personal with them is something we value highly.

There are a few more companies like that in the mobile arena - Nokia, with whom we have a good relationship, Samsung, who seem to be taking their #2 position in the mobile device market seriously and are now building an eco-system, not just devices, and of course Apple. We are hoping to deepen the relationship with them too in the near future.

On winning the GSMA Award for Innovation

A few weeks ago, we were nominated as a Semi Finalist for the GSMA Innovation Awards 2009. WorldMate Live was named the most innovative mobile application in a vertical market.

This is of course a great honor. But further then that, it may be an indicator about how the mobile industry and specifically operators are seeing the future. You see - the GSMA is really an association centered around the needs and interests of mobile operators, and these awards were geared towards what is interesting to them. Taking an interest in WorldMate Live is really wanting to get involved in travel, becoming a part of the travel distribution value chain - potentially going beyond being a data-pipe into and taking a part in commercial processes done via mobile devices - m-commerce.

m-commerce has been over-generalized and over-hyped in the past. Most self proclaimed m-commerce companies are really enablers to payment, tracking and so on. That's like saying e-commerce is about clearing credit cards on the Internet. Or like saying Amazon's business is to take money from people. Yes, this is an important enabler and important aspect of it... but it totally misses the point. Building the m-commerce business is about making products that are relevant to consume or purchase while on-the-move, available to purchase in a compelling manner through mobile devices. This is no trivial feat.

Travel is going to be at least as dominant a vertical in m-commerce as it is in e-commerce. Simply because travel is mobility and you consume travel products on the move. This is what WorldMate Live is ultimately about, and we're glad to see the mobile industry is taking an interest.

iPhone Musings - Episode II

It was over a year ago when I commented on the shortcomings of the iPhone as a business tool on this blog. Since then, that post got the most reader comments I ever got here... Lately, we're inundated daily with user requests for WorldMate Live on their iPhone. And certainly - the iPhone SDK and the iPhone 3G are not to be ignored.

However, there are significant issues still. The iPhone SDK does not allow an application to update information in the background - e.g. the Auto-update functionality of WorldMate / WorldMate Live. It does not include a robust push mechanism yet, or allow us to build our own - enabling the pushed flight alerts, trip reminders and welcome messages which put the "Live" in WorldMate Live. And the iTunes App Store model is not a great match for our distribution philosophy.

So will iPhone users get WorldMate Live? Well, we'll do whatever we can. At the same time - if you want it on your iPhone, we should jointly petition Apple to enable us to do those things. I am thinking of putting up an online petition for Apple to open these APIs for us. If you're a supporter - comment here. I promise that if we get 10 people commenting, we'll post an online petition.