Follow Us

·

What Becomes of the Profitless iPhone App?

Monday, June 29, 2009
by  presnikoff

The iPhone ushered in the era of app-craziness, and me-toos from Blackberry, Android, and others are sure to keep the party going.  But amidst the craziness, getting noticed on the Apple App Store is incredibly difficult.  One recent estimate pegged the app count at 36,000, and most apps get buried within the crowd.

After that hurdle, getting both noticed and paid seems a nearly impossible trick.  All of that presents a difficult choice for developers, at least for those wanting to accomplish serious goals on the iPhone.  Widespread awareness usually happens when apps are free, though monetizing that popularity remains an extremely difficult task. 

Just ask Tapulous - despite being one of the most popular apps, most are taking free versions.  At SanFran MusicTech last month, Tapulous CEO Bart Decrem revealed that Tap Tap Revenge had more than 10 million unique installs across the iPhone and iPod touch, with just 250,000 premium buys.

Another wildly-popular application is Shazam, which recently crossed the seven million threshold on the iPhone, according to the company.  The London-based Shazam has been present on earlier decks for years, though the iPhone helped to catapult the awareness.  People love this thing, especially on the simpler iPhone interface, though the adulation comes at a price - namely, free app downloads. 

That may be one reason why the company is expanding beyond recognition, and into something more diversified.  Already, the app has associated biographies, discographies, album covers, iTunes links, Beatrice FarinaYouTube videos, and even lyrics (in North America).  "These are just some, we've got many more [features] that we're planning to bring through," Shazam marketing communications director Beatrice Farina told Digital Music News at IMIW in London last week.  "We want to bring more of these services that are outside of Shazam into the experience, and that comes down to partnerships."

But at its root, the secret sauce for Shazam is on-the-go identification, a core competency that it executes well.  The trimmings are nice, though the real play for Shazam could be a move for the exit door - especially if frothy times return.  "Some of this stuff comes further up the food Rob Lewis, Omnifonechain, so some things that are applications today will just become part of the handset in the future," relayed Rob Lewis, CEO of Omnifone, at the same event.  "When I buy a handset in the future, just as I make text messages or phone calls, I'm going to expect to be able to do music recognition and download the music I want."

Indeed, those expectations are good news for well-placed players, especially as smartphones get more sophisticated.  It also opens the door for some clever consolidation plays, especially in such an early-stage space. 

Report by publisher Paul Resnikoff in London.



OUR SPONSORS