If you're trying to make money, dump your iPhone strategy

First of all, I couldn't agree more with your whole article. Apple's success has come directly on the backs of the developers it pretends to help.

You make a comparison that "I instinctively knew what would happen to mobile publishers if the iPhone took off. Pretty much the same thing that happened to the record labels when the iPod launched."

Being both a musician and a developer, I think while there is are similarities, there are also distinct differences:

a) Try to find a free song on iTunes (other than the ones you get at Starbucks once a week) ... why does Apple think it's ok for free stuff to appear on their App Store but not on iTunes? See the next point.
b) The music industry serving iTunes has a huge lobby behind it, and large companies with lawyers. Software publishers, even the big ones, are tiny in comparison to music companies. Therefore, it's easier to take advantage of developers.

The musician already has a crappy deal, of course, from the music labels. By the time the producers, agents, etc... take a cut, musicians are left with about 10% of their songs, half of which usually goes to the songwriter. The other half between the musicians who play on the track.

So, in that notion, iTunes and iPhone are very similar. In a world where content is king, those that create that content aren't the ones that benefit.

Those carriers, handset manufacturers and music labels that REALLY figure out how help developers and musicians will be the ones who get their loyalty and ongoing business ... and will ultimately be the ones that persist. The others will quickly fade.

Great article, you touch on some crucial points about successfully marketing and monetizing on mobile. But the key is actually to not depend on any third party to market and sell your products – not Apple and not the operators. Pick the right strategy and tools needed to drive your own business directly. This maximizes your control, speed and profit.

There are three aspects to consider when selling via mobile:

1. Mobile Marketing – operator decks, search marketing and banner advertising are the best methods of getting quality traffic today. You retain control over your targetting, spend and messages.

2. Measurement – buy a decent real-time analytics solution that measures traffic from the marketing campaigns through to payment. This lets you adjust campaigns quickly and optimize your conversion rate. Accuracy of visitor identification is key to measuring business growth here.

3. Mobile Billing – as you say, use the operators best billing solution (rather than relying on outdated premium text payments), but don’t give your content to the operators or try to do all the integration work directly yourself – it is expensive and complex to ensure top payment success rates. I would strongly recommend using a solution like Bango Payment (bango.com/payment) that gives you a single integration for operator billing, credit cards, PayPal in multiple countries.

So get your own store and use a unified cross carrier billing solution that has direct operator integrations. Then use the decks, advertising and search to market your products. And lastly measure your success carefully and adapt quickly to grow the business.

By the way, many people talk about payout rates and how operator rates are low. This totally misses the most important factor - the conversion rate. The number of people that successfully pay has a far bigger impact on your profits than a few percent on the payout rate. At Bango we can typically deliver in excess of 80% payment success, which compares to PayPal at around 1%, Credit Cards around 12% or Premium SMS around 30%.

This guy prayed for iPhone to flop because he is a middle man that will not be needed in the new paradigm.

And, if buying licenses because you cant come up with a fresh idea makes you "serious", I hope I am never serious.

I am sorry. I completely disagree with your assessment of iTunes effect on the music industry. Any time the music industry has been presented a choice of giving the customer what they wanted or to mess them over, they chose the latter. When they finally got the ability to charge more for their music on iTunes, they made less money, because people just did not buy enough sings to take up the slack. The unfortunate reality is they are selling a commodity which anyone has the ability to get for free in a few minutes.

Mobile apps on the other hand needs some serious overhauling. The only way anyone should be able to rate a game or app is through that game or app. I also do not think they should be able to host free content on the App Store. There is way too much crap out there and no way to tell what is good and what is not. It is not as bad as it is with Symbian programs (absolute total nightmare) or Windows Mobile (partial nightmare), but there really should be an understanding that allowing anyone with $5k to make and app and not having a certification program is bad for everyone. Palm's Pre is going to be even worse. "Anyone who can make a web page can make an app for Web OS" There will be more garbage made for this than the App Store has ever dreamed of. I still hold out hope for Android, and then possibly Moblin when/if that falls through.

This article is complete rubbish and full of inaccuracies. I'm an iPhone developer and make 6 figures from it.

iPhone dev is like any other kind of business: YOU HAVE TO MARKET YOUR PRODUCT! Sales don't just happen out of thin air.

The author of this article is completely clueless when it comes to business.

Of course, you're forgetting the point where the oh-so-wonderful carriers were all trampling over their users.

That's the difference - Apple cares about its users, not the developers.

And as most iPhone users confirm, they are more than happy with the apps out there, and the apps they have.

Does the AppStore have issues? Yes. Is it better than the carrier-controlled world? By miles, as far as users are concerned.

I've bought a bunch of apps, some of them games, and use a few of them daily. The App Store is fantastic.

When the "Media Mall" was available on my Motorola, I tried using it once, and was astonished at what an incredible piece of shit it was. Good riddance.

Hi!

I love your article. Thanks for putting this idea "out there." I run a meetup group called WebMapSocial. (www.meetup.com/webmapsocial). If you're ever in the Bay Area I'd love to host you at an event.

Thanks much,
Catherine

I read this article a few times, and I wasn't sure whether he was trolling or serious. I'm a Mobile phone addict, and tried everything I could find on my Treo (600, 650, and finally 700p). I was more than happy to spend money - and in the entire time I owned those three cell phones, I _maybe_ spent $50. Yahtzee was the highlight. Several other times I was just unable to purchase them.

I don't even want to think about what I've spent on my iPhone, but, taking a quick glance, I see that I have 64 applications on it right now, probably 70% of them purchased, ranging from $0.99 to $14.99. One of them, though, "World War" managed to get me for about $25 (Okay, I was an idiot and purchased some "Honor Points" to accelerate things - but I had fun doing it)

I'm comfortable saying not a single one, not one of those apps is as poor a quality as anything I purchased on the Treo. From Eucaplytus to Urban Spoon, from White Noise to Monkey Ball, from TapTap to Galcon or pTerm. The Ted Interview are amazing, Kindle on the iPhone has literally restarted my love of reading.

Between the Books that I've purchased for my iPhone (About 15 @ $9.99 each), and the Apps (around 40 @ average of $2.00) - I'm into my iPhone for about $230 - not including any of the audio or video content.

So - I completely confused as to what the heck the author above is trying to communicate - the iPhone has revolutionized the purchasing of applications. I don't know if this is a Silicon Valley thing, but _everyone_ I know purchases and discusses their purchases of apps for their iPhone. I don't recall anybody ever having done that for their Treo or Blackberry.

The commenter above has it right, here is a middle man that is not needed in the iPhone/app store paradigm. Before the iPhone I had terrible experiences downloading and installing apps for mobile phones. There was a particular java game that I downloaded for a nokia phone that literally killed the phone - the phone stopped working and COULD NOT BE REPAIRED.

I love the iPhone, I still have the 2G model, but I'm getting the 3Gs today.

This is hilarious. Yes, Apple destroyed the album industry, by giving people what they want. And apple allows people to submit free applications, as one of your commenters posted, how dare they?

Go away middlemen, we don't need you anymore. You have never had anything much to offer, except your connections. Now we can deal directly with mobile companies, Apple, Palm, RIM, Microsoft, Nokia... so we have no need for you.

And I bet you that EA have made more from the $5.99 iPhone version of scrabble than all the other mobile versions combined.

You don't know anyone who ever bought an iphone app...psshh, what a liar.

Konny, if I were you I'd look for a new business model as long as you can. As other commenters already said: You middlemen are no longer needed. The developers in the AppStore seem to be quite fine without you.

Unsubstantiated FUD won't help your business, seriously.

You're just mad you missed the boat and are totally out of touch and irrelevant as a person AND a company. Your own arrogance and greed put your business in a dying position and you're pathetically on your knees begging. Wake up - there's no room for inefficient useless companies like yours in the new wireless era. Give it up, middleman!

You're just mad you missed the boat and are totally out of touch and irrelevant as a person AND a company. Your own arrogance and greed put your business in a dying position and you're pathetically on your knees begging. Wake up - there's no room for inefficient useless companies like yours in the new wireless era. Give it up, middleman!

I spoke with one of his guys and experienced the rudest convesation I have had in business. YUCK

Direct delivery of digital content, from producer to the consumer, is the way it is going. Be it music, books (Kindle anyone) or games on smart phones and x-box 360's. Review sites are already popping up for iPhone apps, you can find video demos on you-tube and the best have free demo versions on iTunes, so yes quality producers will put the work in and find a way to get the word out. Notice I said "quality" not "crapware". Quality producers, having instantaneous access to tens of millions of buyers, will make money, and some are making a LOT of money. Crapware makers will be weeded out. Maybe $0.99 sounds like a small amount but when you consider Apple is doing the entire work of distribution for you and your immediate access includes EVERY SINGLE iPhone or iPod touch owner, well you do the math. A lot of middle-men in a lot of industries need to start adjusting their career plans accordingly.

And I forgot to mention the obvious economic reality of this is that if someone spends $0.99 on an app instead of $24.99 or whatever for the same game on some other platform then the consumer is left $24 to spend on other things. But of course this happens in just about every industry producing a net result of elevating the standard of living for all (more people can buy more stuff with fewer dollars). People "hurt" need to find alternative means of getting a piece of that $24 rather than crying about their dying industry.

The iPhone market reminds me a bit of the early days of BREW; even down to the number of handsets; the free apps (they were called demos in BREW); the sham openness; the emotional commitment by angry, middlemen-weary developers; the few dozen hundred-thousandaires that were created; I wonder if it will end the same?

It does seem that the user and developer experience with iPhone is a true advance, as BREW was over J2ME, leaving more time and resource for marketing. BREW was closer to a "development platform" than J2ME, though the device manufacturer was never fully integrated into the process. With iPhone, you really just have the device manufacturer and the carrier. To this simplified platform alone do I attribute the loyalty we are seeing, based simply on users and developers not being presented with so many unsolvable and annoying problems as with J2ME and BREW.

But it is unlikely that Apple will supply the remaining 99% of the world's users. And a decent portion of them want apps and devices that work also; and not all of the "app store" suppliers that step up will execute as well as Apple has, nor necessarily with the same ambivalence to profit on the software.

Even with the iPhone Apple store, the heavily profitable firms will eventually discover ways to capture more and more market share, crowding out the "little guy" substantially if not completely.

No, the future is still quite complicated and full of uncertainty, and I do not believe that macro-economic nirvana is yet reached for the brave, lone, developer.

But there is always Hope, and Apple has delivered on that, for sure!

This article is hilarious.

So basically, Konny, you are saying that Wal-Mart should stop lowering their prices to attract customers and also offering incentives like free samples? Just so small grocers who can't compete can survive?

Is your company in the United States? This isn't a socialist or communist economy. Capitalism and free trade are the foundation of why this country has sustained itself for so long. Sure, in any free economy, there will be extreme ups and downs and right now we are in a down, but like the 1930s, we will rebound.

But to say that Apple shouldn't offer free apps because it is hurting the 'little' guy sounds more like 'if Apple continues to offer free apps, my business may be in trouble'. But I'm not going to go as far as some posters and say your business is bullshit or anything like that. All I'm saying is that I understand you were late in the game as far as iPhone is concerned, but you need to catch up. Every carrier has their version of it, and now, they all have their version of the App Store. Hell, AT&T is renaming the media mall to the App Mall or something like that.

As most companies revere what Apple has done and try to duplicate, what are you going to do when AT&T (your biggest money-maker) adopts the same model for selling mobile content as Apple has? What happens to WDA then?

To all that know this company, we all know that WDA is struggling as much, if not more, as every other mobile company. But one of the posters made an interesting comment. That when they spoke to someone in your company (probably HB or JC), that they were rude and unbecoming of another human. I have had the same experience and I am a CLIENT!!! Well, kind of. I have also been doing business with Konny's competitors as well to ensure that I actually make money. And go figure, they actually treat me like a client rather than a bother. Only reason I am still with WDA is to ensure that I continue making money in this economy. But if things were better, I wouldn't need WDA anymore.

Konny, seems you only respond to those comments that agree with you. Since Apple is hurting all your clients, you must have a couple of seconds here and there to respond to those that disagree.

Wow, what a lot of hate in the comments. I really think that a lot of you need to read back what you've written and see if it's truly in the spirit of constructive debate.

I would suggest that every single flame has been posted by iPhone owners. A trait I've noticed is that as soon as someone jumps onto the Apple train they feel they have a fight on their hands. I guess it's a complex caused by Microsoft constantly trumping Apple in the OS battle.

Let's all calm down a little. There really is no need for all this flaming.

I don't like the iPhone but I do recognise that it has done wonders for educating the public that there's more to mobiles than just voice and text. Finally we have a platform that can do so much more, but importantly it makes extra applications accessible and consumable.

My problem is that the worldwide market share that Apple has is actually a lot smaller than iPhone fans would have you believe. Given the amount of absolute trash that is available on the App Store I find it difficult to believe that enough people make money out of selling apps to maintain a sustainable environment.

This problem is not just Apple's. I recently switched from Nokia to Android and I am inundated with rubbish and duplicate applications in the Marketplace and I am overwhelmed to the point that I cannot discern good from bad. It has become painful to find applications because of the distinct lack of editorial to filter the stuff that matters from that which doesn't.

I am a mobile web expert – developing and delivering services for mobile web for the last 7 years at Wapple. I believe in the broadest possible publishing models and I believe in open markets not manufacturer-owned distribution channels.

The mobile web unifies all operating systems. Mobile web is the platform that we should all be publishing for as it is unrestricted and platform independent (provided you use the correct tools to overcome device variations).

A colleague of mine was a complete Apple head. He spent a lot of money on the App Store – then he had his phone stolen during a night out. Disgusted with O2's refusal to honour the insurance policy he had paid for he bought himself a new Nokia, swearing never to return to iPhone again.

He lost all his apps. Those that he had paid for.

More worryingly for everyone in this forum, he was lost as a customer to those businesses relying on his ongoing custom through the App Store.

Though all the services that he engaged with through his mobile web browser were maintained as he moved to a new operating system.

Now the theft of a phone is an extreme example, although we can all relate I'm sure. But let's look at our own histories. I am a Windows PC user and have been for 16 years. Sure I've used other operating systems fleetingly but I have worked with the same software and service vendors for years.

But when it comes to phones, I have used many different models from different manufacturers. Every 18 months for the last 10 years I have changed models and manufacturers.

I find it hard to believe that anyone will be an iPhone user for life. Right now iPhone is the ‘big thing'. All the decision makers have them (what about all the customers, though?). But it will not be the big thing forever.

Users will migrate. You will migrate. Then all the development and marketing you have put into attracting a small slice of the entire mobile audience will be for nothing.

Personally, I'll keep developing for mobile web. It's not a direct competitor to mobile apps anyway, but I do know that what I make will move with me, my customers and the market through all its twists, turns and trends.

For more justification for delivering to all mobile devices, search for Mobile Web Junkie.

@rich holdsworth

Sadly, when you start off you comment with: "I guess it's a complex caused by Microsoft constantly trumping Apple in the OS battle." it somewhat labels you as a microsoft fanboy, and i'm less inclined to consider anything you have to say... (besides, apple has a much better OS now, and the only thing MS has now is marketshare)

I'm an iPhone user and totatlly agree with the general direction of the article... it is very hard finding a decent app for a purpose by searching in the app store, the best way is to let bloggers do the work, and post 'best of' lists, advising of the ebst options.

Where as, people claiming you don't need the appstore are clearly smoking something, as sadly, the mobile apps won't be able to replace all native apps, and can't currently come anywhere close to apps such as weightbot + convertbot, which are 2 excellent examples of native, polised and feature rich applications.

As soon as corporations and businesses stop seeing an iPhone app as a 'must have' the better. Leave it to people wanting to create a great app with purpose. Not for marketing, prescence or quick buck.

Families to support?, get a job, iPhone and apple is the best that ever happened to common people and true musicians, talk about music industry or market?, do your job!, compete with that! is it not capitalism's all about?, Iphone 3gs is the best Mobile device out there and AppStore the best mobile apps store out there, do you have a Blackberry? I had one once and you know what? I am telling you man you should own an iPhone and stop playing those little tiny games you play for your dollars or using those slow and empty apps you buy from your little mobile store that are just emptying your pockets,..... Families to support.....stop whining, get the real thing, get an iPhone and you'll never downgrade to any other device or miss your limited mobile apps, apple's logo means not going back, really, you don't know what you are talking about.

Smartphones have to be the largest racket in the mobile communications industry. Most people do not need smartphones but have somehow convinced themselves that they do. Unless you are self-employed or your employer provides a smartphone for you, you probably don't need one, you want one. I get by with a Samsung R451C from Straight Talk. It is the easiest way to save a lot of money.

smartphones are what the name says, some people do not want just a device to be functional with basic features or just to stay connected for bussines but for any ocation, assistence, Browsing or any other, organizing and gaming, all in your hand, I say apple's AppStore will not be down until sensational game developers drop it, and they won't, not soon. Games are magnets for many users to start buying other apps, that's what I think and for most iPhone users the price is irrelevant whether it is $.99 or $10, I have read many reviews, there are hundreads of people who are willing to "buy it just to try it". So I do not agree with you at all, the device itself is the game, iPhone without AppStore is useless so AppStore will not die soon and there is plenty of room for real developers to compete and plenty of money too, just have to be good at what you are doing, there are plenty examples, check the appstore an see by yourself.