App Store Success Reportedly Overwhelms Even Apple's Expectations

[MacRumors]

In the first of a three-part series on Apple's App Store, the Financial Times reports that the phenomenal success of the iPhone application marketplace has topped even the initial expectations of those within Apple.

Already, the app eruption has superseded all the sober predictions of Apple executives and outside champions like Kleiner Perkins Caufield & Byers, the venture capital firm that created the first investment fund aimed solely at backing iPhone app developers.

"We had no idea there would be 2bn downloads by October," says Kleiner Perkins partner Matt Murphy, manager of the then $100m fund. "Most people within Apple, if you had told them it would be a fifth of that by now, they would have been pretty happy."

Part one of the series primarily serves as an introduction to the App Store, detailing its evolution as an an outgrowth of iTunes, which had already helped remake the music industry and provided an entry point into the larger community of Windows users. Beyond that, the report points to Apple CEO Steve Jobs' ability to negotiate eye-popping iPhone subsidies from wireless carriers and the rights to distribute application content to iPhone users as setting the stage for the Apple's tremendous success in the industry.

He argued that the iPhone was a computer, not a phone, and that consumers expected to be able to do many things with computers.

History had shown that this kind of freedom was what drove the more profitable "ecosystems" of computers - where sales of hardware were dependent on a wide variety of useable software.

The conclusion of the report, however, hints at some of the pitfalls of the App Store set to be discussed in the second installment tomorrow, citing the "gold rush mentality" that has made it increasingly difficult for developers to create hit applications that stand out from the crowd.

Article Link: App Store Success Reportedly Overwhelms Even Apple's Expectations

 

[ikeywah]

fantastic

"if you build it, they will come"

 

[AAPLaday]

I think it shocked everyone, including rival phone manufacturers

 

[theheadguy]

What other place could you sell -- and people actually be dumb enough to buy -- a $999 "I Am Rich" app? Yes, the App Store is successful, indeed.

 

[AriX]

Umm... No duh? If you remember, Apple didn't want an App Store for a while in the beginning of the iPhone... Obviously if they didn't think it was a good idea, it exceeded their expectations...

 

[alent1234]

apple spends 2 years telling people that if you want an ipod get a Mac, then finally relents and releases a Windows version. ipod goes from an elitist niche product to 75% of the PMP market in a few years

same thing with the iphone after apple opened up development

after apple opened up their walled garden the popularity took off. even MS was forced to be more open this decade

 

[oldwatery]

Oh my, so now VC companies are being created just to support iPhone app builders!
Gentlemen start your new Stock Market "app" bubble.

 

[Berio]

What other place could you sell -- and people actually be dumb enough to buy -- a $999 "I Am Rich" app? Yes, the App Store is successful, indeed.

that app was pure genius! a victory for situationist art!
it must have take the inventor 10-15 minutes to create, and i hope he earned a lot of money from it, excellent conception and execution of a work of art.

people were crying 'scam' when this was in the news, can't see any scam there, no claims were made that the app was capable of anything. pure bling for people with too much money.

 

[Doctor Q]

Having success that "topped even the initial expectations of those within Apple" presumably means Apple underestimated the staff they'd need for every part of the operation, from the application approval process to customer service to counting all the money pouring in faster than expected.

 

[Chupa Chupa]

This seems kind of obvious since Apple was literally dragged into starting the App store in order to stem the need to jailbreak to install 3rd party apps. How many times did we here Steve Jobs tell developers all they needed were web apps.

It's kind of a double irony because it's really the App Store that has sustained the iPhone. Without it it very well might have been the "Flavor of the Year."

 

[nkawtg72]

while i certainly agree with many that the app store needs some major improvements made to make it a better experience, i will stop short of saying it's the app store's fault and not developers which creates the difficulty in "standing out" as they put it.

too many devs are being lazy and depending on the app store for their marketing plan. any other distribution method and they'd be forced to do some form of advertising.

the statistic i'd like to see thrown around is what % of devs do outside advertising, and also what is the relationship between $$ spent on advertising to app store sales.

it's a no brainer of course, but i'd imagine you'd see that most of the successful devs do some significant advertising and don't depend on app store searches or lists.

 

[Consultant]

Yes it's successful for its own reasons. Users want usability and Apple provides it.

What other place could you sell -- and people actually be dumb enough to buy -- a $999 "I Am Rich" app? Yes, the App Store is successful, indeed.

Do you know what an outlier is? Look it up.

Does it negate the medical apps that help doctors?
Does it negate other useful apps?

 

[SandynJosh]

What!! You mean that the iPhone-app store phenom wasn't all a clever long-term strategy by Steve Jobs to take over the digital world? It all just fell together? It was only dumb luck?

I'm gob-smacked! This means of Steve Jobs walked through a casino, the slot machines would belch money in his direction due to random cosmic glitches.

There is a God and Steve is his Son.

 

[DipDog3]

Honestly, I still think Jobs never wanted an App Store and he caved after all the pressure.

He probably still hates the thing!

 

[nkawtg72]

What other place could you sell -- and people actually be dumb enough to buy -- a $999 "I Am Rich" app? Yes, the App Store is successful, indeed.

personally, i think apple was lame for taking this app down. if someone has $1000 bucks they wanna blow, who says that buying this "bling" app is any worse than going out and buying a custom diamond inlaid case for your iphone? trust me, i've seen them.

i mean seriously, there are tons of rich people out there who buy stuff for the sake of buying it. how does someone having a bling app on their iphone take anything away from the iphone experience for anyone else?

apple's take on this app was over $333!!! for a single purchase mind you. if i had been apple, i would have left it on there in hopes that a bunch of rich people decided it was worth having

all that said, i don't care either way. i just think it was a whole lot of fuss over nothing

 

[Eraserhead]

apple spends 2 years telling people that if you want an ipod get a Mac, then finally relents and releases a Windows version.

Actually they released a Windows iPod in July 2002, 8 months after the release of the iPod - its just that iTunes for Windows (rather than MusicMatch) took until October 2003 to be released.

 

[CFreymarc]

True!

What!! You mean that the iPhone-app store phenom wasn't all a clever long-term strategy by Steve Jobs to take over the digital world? It all just fell together? It was only dumb luck?

I'm gob-smacked! This means of Steve Jobs walked through a casino, the slot machines would belch money in his direction due to random cosmic glitches.

There is a God and Steve is his Son.

While there are those that can't stand the guy, about the only thing he is guilty of is rejecting the status-quo and totally cashing in on it. His rage is sometimes not the best approach to handling problems but he can see through social veneer while most just see the surface.

My take is that we are going to see a totally revamped App Store this summer at WWDC to handle a million app titles. The new interface will be obvious when we see it but most won't even be able to think of it since they only see the veneer.

 

[Ted13]

Umm... No duh? If you remember, Apple didn't want an App Store for a while in the beginning of the iPhone... Obviously if they didn't think it was a good idea, it exceeded their expectations...

When someone with insider access writes the history of the iPhone, (and many will be written) we will know for sure.

My guess is that it was planned all along, but the public APIs, dev tools* and store infrastructure simply weren't ready. Unlike its competitors (see: Blackberry Storm; B&N Nook) Apple doesn't publicly release unfinished products. Thus Apple encouraged Webapps as a stop gap measure. But like I said, both of us are guessing, one day we'll know who's right.

*Indeed the original dev tools were still missing Interface Builder -- delivering all that stuff took the extra year.

 

[anubis]

personally, i think apple was lame for taking this app down. if someone has $1000 bucks they wanna blow, who says that buying this "bling" app is any worse than going out and buying a custom diamond inlaid case for your iphone? trust me, i've seen them.

i mean seriously, there are tons of rich people out there who buy stuff for the sake of buying it. how does someone having a bling app on their iphone take anything away from the iphone experience for anyone else?

apple's take on this app was over $333!!! for a single purchase mind you. if i had been apple, i would have left it on there in hopes that a bunch of rich people decided it was worth having

all that said, i don't care either way. i just think it was a whole lot of fuss over nothing

The problem is that almost everyone who bought it thought it was a joke and immediately complained to Apple after their credit card had been debited a thousand bucks. Yeah, you have to be pretty stupid to think Apple would try such a "joke", and they had to click through and agree to a $1000 charge in order to download it. But by leaving the app up, Apple would have been risking upsetting a lot of people who paid good money for an iPhone and would have taken their business elsewhere on their next phone purchase.

 

[anubis]

Anyway, I find this whole article extremely ironic. Steve Jobs fought against the App Store tooth and nail for a very long time. People were screaming for the ability to develop apps for iPhone and he tried to convince everyone that web apps would be sufficient for everyone's needs. The App Store almost didn't happen, on account of Jobs.

 

[neutrino23]

Steve says it's not a phone, it's a computer even though he calls it "iPhone" and not "iComputer". Pretty funny. Good selling.

The app store may be problematic for reaching a general audience, but there still seems to be a lot of potential for apps with a more narrow focus. For example, companies could develop apps to complement all sorts of instruments like MS, ICP-MS, HPLC, EDS, WDS and on and on. Similarly, how about an app for my car that talks to my car with BT so that I always have at my fingertips all of the information stored in the car's computer like age, mileage, error codes, time since last servicing and such.

How about a paint color matching app? You take a photo of a white sheet of paper, then a photo of your wall using the same lighting, then at the store you take a photo of another white target using calibrated lighting. From this the computer ought to be able to calculate a quite good representation of the original color you want to reproduce.

 

[Xavier]

I love the App Store. Just, what will come next?? Interesting to think about

 

[cvaldes]

How about a paint color matching app? You take a photo of a white sheet of paper, then a photo of your wall using the same lighting, then at the store you take a photo of another white target using calibrated lighting. From this the computer ought to be able to calculate a quite good representation of the original color you want to reproduce.

I doubt if the iPhone's camera is sensitive enough to do this.

There's already a Pantone app that will find the closest Pantone color to a picture. Pantone has a disclaimer that the app colors may not match their established standards. In reality, 24-bit color is probably not sufficient for something as nuanced as wall paint.

There are manufacturing variances in paint anyhow (even though the QA is quite high), which is why professional painters blend multiple buckets of paint together, even if they came of the same store shelf.

 

[Doctor Q]

personally, i think apple was lame for taking this app down. if someone has $1000 bucks they wanna blow, who says that buying this "bling" app is any worse than going out and buying a custom diamond inlaid case for your iphone? trust me, i've seen them.

My plan was to buy the "I Am Rich" app and then buy the Hope Diamond, also just to impress my friends. But Apple pulled the app and then I realized that the Hope Diamond doesn't do anything either. Why would you want either of them? The money would be better used for charity, but so would a lot of money people spend. So I agree with you that it should be an individual choice.

 

[JAT]

how about an app for my car that talks to my car with BT so that I always have at my fingertips all of the information stored in the car's computer like age, mileage, error codes, time since last servicing and such.

Cars would have to do this via BT, first. But an app with a cord might be nice to plug into the computer. Although the scanners are down below $40, now.

How about a paint color matching app? You take a photo of a white sheet of paper, then a photo of your wall using the same lighting, then at the store you take a photo of another white target using calibrated lighting. From this the computer ought to be able to calculate a quite good representation of the original color you want to reproduce.

I doubt very much that you could get a crap phone camera and app to work with the varied lighting and color samples with good accuracy.