RealTime IT News

iPhone: 'Lots of People Making Small Money'

PALO ALTO -- What's it like for a Nokia executive to appear on a mobile panel in the heart of iPhone country? "I feel like a foreign exchange student," said Purnima Kochikar, vice president of Nokia's Community & Developer Forum.

She soldiered on bravely, touting Nokia's global reach and mobile ecosystem as the rest of the panel on "Who's Making Money in Mobile" here at the AlwaysOn Summit, mostly touted the iPhone.

"I'd love to go to other platforms, but no one else allows us as much access to a huge, excited community and a channel that makes it easy to be discovered," said Bart Decrem, CEO of Tapulous, makers of the popular Tap Tap Revenge game on the iPhone. "It's a platform on fire and the engagement is incredible. iPhone users are paying for things they would not pay for on the Web."

Dorrian Porter, CEO of Mozes, said he's focused on iPhone, but would look to Google's Android operating system second. "When we think about updating applications and getting approval, we have to choose what's the easiest platform for limited resources," he said. Mozes provides mobile marketing services and analysis.

Simon Khalaf, CEO of mobile analytics firm Flurry, disputed reports that the most of the iPhone's 65,000 applications are rarely used. "Engagement is increasing," he said.

Khalaf said the App Store has spawned a new category of distribution he calls "Apptailing." "You remove the concept of the ad network; you sell goods, you don't advertise," he said, though there are some ad-supported applications on the iPhone.

"Apple's proven if you make the programs cheap enough, people will buy them." He said that even if you don't count the free applications in the App Store, it's growing seven times faster than iTunes.

While the App Store has spawned some newly-minted millionaire developers, Matt Murphy who directs the $100 million KPCB iFund said it's mainly "a lot of people making small money."

But he also said recent advances in the App Store should help spur more revenue, pointing to subscriptions and In-App purchase features that Apple recently enabled in version 3.0 of the iPhone's operating system.

Murphy said KPCB has already invested about half of the $100 million iFund in iPhone developers. Six companies have been announced and he said a seventh is under wraps.

Kochikar said its' too early to say what will make money in mobile. She mentioned one developer is putting ads in video games and the U.S. Army is one of the advertisers using it as a recruiting tool.

She reminded the audience of well-heeled venture capitalists and investors that most of the world can't afford an iPhone or smartphones in general. "For whole populations, hundreds of millions of people, their first Internet experience is on the phone," said Kochikar, noting that lower cost feature phones can provide basic access to needed services.

In India she quoted one observer as saying it's " …'get ahead in life, make more money and get a wife.' "That's what this population pays for," she said. Nokia phones and services offer everything from paying utility bills to a mobile Craigslist-like services and "life tools" designed for parents, farmers and small business people. One subscription service offers quizzes for those learning English for 50 cents a month.