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					The Amazing iPhone
A guide to the iPhone opportunity for developers
and business owners
Version 1.2 (23.02.09)

            This report was commissioned by ICDC and written by Kisky Netmedia

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The iPhone: its sleek design, always-on connectivity, enterprise support, application platform, quirky third party
apps and the fact that it’s made by Apple keep the iPhone in the headlines. Those who have one say they’d never
go back, and the iPhone wins hands down in comparisons with other ‘smart’ phones. The iPhone is rapidly
expanding in global markets; already in 80 countries, it’s set to be in 84 countries soon. The iPhone 3G launched in
the UK in July 2008 is even more popular than the original iPhone having already sold over 17m units worldwide (1
million in the first weekend it went on sale). The ‘device’ itself seems to transcend mobile phones; creating a new
product genre; it sure is a smart phone, but it’s a smart phone that appeals way beyond the traditional smart phone

iPhone is first and foremost a phone (you can make phone calls with it); and whilst there’s arguably relatively little
innovation to be made in terms of voice, Apple has indeed innovated everywhere; including in voice, as you might
expect. iPhone boasts a fully featured web browser via Safari, email via Mail, Events and Calendars via iCal as well
as great Utility apps from a calculator, to Address Book, to Notes. Oh, and of course all of your mobile ‘stuff’ is
synched to your computer via Mobile Me; even PC users get great synchronisation capabilities. When you’re not at
work there’s YouTube to play with, and it’s an iPod; so it holds all your music, and TV shows. Oh, and all of that just
comes as standard in a super-easy-to-use interface.

It seems you either love it, or you love it, unless you haven’t actually held one yet, in which case you should, so you
can make up your own mind. It’s not just the iPhone device though that’s being described as a ‘game changer’
heralding in Mobile 2.0; there’s more to it than that. iPhone comes with its own marketplace; the App Store where
third party developers can distribute their software. The App Store, controlled by Apple enables anyone the chance
to either distribute an application for free, or to charge for each download. Whilst Apple takes 30% of sales
revenues, the 70% revenue to the developer is appealing and previously unheard of in the mobile applications
business. Whilst Apple moderates what goes into the App Store; essentially it is far more open that any other
mobile ecosystem to date. Anyone can create an application and apply to become an official iPhone SDK
developer, anyone can submit an application to the App Store and if successful, as most are, anyone can sell their
application to a consumer base that is easy to target with one point of sale. Even niche services can reach their
longtail audiences via the App Store.

Apple has not only created a new breed of phone, and marketplace, but a new way of thinking about mobile
content and what makes a good mobile service or application. Unlike any other previous mobile platform, Apple is
enabling the consumer to decide. Whereas previously, application developers would need to do deals with either
handset manufacturers or network operators to get their apps pre-installed on phones or accessible via a list of
‘recommended apps’, now, the field is much more open to all.

The iPhone App Store is a groundbreaking strategy for a handset manufacturer; enabling third parties to create
great content and applications for your device; building yet more appeal for consumers; and more revenue. The
App Store launched in June 2008; it already boasts over 20,000 Apps and over 500 million downloads and is as
diverse as the capabilities of the device itself. You’ll find high quality games, addictive time-wasters, city guides,
social networking and location aware apps, music recommendation apps, health and fitness aids and productivity
tools. And unlike traditional mobile applications, the experience is in a class of its own. iPhone does things other
phones don’t do (yet); it comes with GPS location awareness built in delivering a new plethora of ‘Location Based

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Services’. iPhone also has a touch screen meaning previous keypad restrictions on handsets are effortlessly
overcome; making for a much more intuitive user experience. It comes with an ‘accelerometer’ meaning you can
make applications based on gestural input (such as motion, vibration and tilt) - enabling really fun games. The SDK
(Software Development Kit) enables developers to access various parts of the device; for example the camera and
the photo album and location based services, so it’s possible to create feature rich integrated applications, (an app
that takes pictures, geo-tags them with your location and allows you to see other photos taken ‘nearby is just one
example)’. Most iPhone owners have downloaded a range of applications; some for work, some just for fun, and
the App Store is fast becoming a showcase of mobile application innovation. High-end games sell for £5.99 or
more whereas other apps are selling for 59p; and many are free. The attraction for developers is clear; even at 59p
(the 99 cent equivalent) the App Store offers a powerful way to reach your consumer base; just 10,000 downloads
offers developers a healthy ‘carrot’ to develop new innovative applications.

So is the iPhone platform creating an explosion of developer-entrepreneurs; all looking to make a fast buck? Well,
yes and no. Like the web, developers have no, or low barrier to entry; in theory anyone can now make a mobile
app, and there are plenty of ideas out there. Unlike the web however where you can develop web applications in a
variety of programming languages, the skills required for iPhone development are more specific; and arguably
harder to come by. Developing an application for iPhone requires skills in Objective-C programming; although other
Mac development experience from Cocoa to WebObjects also comes in handy. There are plenty of PHP and Ruby
on Rails programmers out there who would love to make the most of this platform but who don’t (yet) have the
skills. A quick search for iPhone developer positions vacant will confirm that the few developers who are skilled in
this area are in serious demand. Hot on the heels of this new breed of mobile developers will doubtless come
iPhone strategists and iPhone designers; the platform indeed requires a new way of thinking about mobile services.

The iPhone opportunity is appealing across the board, and not just to independent developers; games companies
are developing special versions of their games for iPhone, web services are going mobile on iPhone, brands want
to be in your pocket (on iPhone); the possibilities seem endless. Corporations are building in-house development
teams to create corporate applications, brands are commissioning independent developers, and web design
agencies are branching out, adding iPhone development services to their offering. For small businesses too, iPhone
offers a way to reach a new, content-hungry audience; for many, creating an iPhone App is the new way of looking
at ‘online and mobile marketing’.

Whilst iPhone is redefining the mobile landscape and taking the world by storm, it is still very new; in its infancy.
We’ve yet to see the market for apps saturated and there’s still plenty of room for innovation. Everyone working in
this area is indeed still learning: what makes a great app how to monetise an app, how to take web based services
mobile. And iPhone represents a significant investment opportunity; US based venture firm KPCB announced
iFund1, offering $100 million worth of investment.

So what does this new platform represent to technology companies, developers, brands and business owners?

The Amazing iPhone project is a report (and accompanying events) on the iPhone device, platform and opportunity
for both using iPhone and for creating apps for it. In this report we will cover the basics from development and
business perspectives. We have been watching the iPhone space, from the device, to the apps, to the developers,
to industry reactions, and will share this insight alongside direct experience of developing an application for iPhone.

1 http://www.kpcb.com/initiatives/ifund/index.html

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“Coffee Buzz” is a new social tool for sharing and finding great coffee experiences; an idea we developed especially
for the iPhone platform. We’ll be sharing our experiences of developing the concept and the application itself via a
separate report “The making of Coffee Buzz” which is also downloadable at www.theamazingiphone.com.

More information on Coffee Buzz is at www.coffeebuzzapp.com.

The Amazing iPhone report is aimed at business owners and strategists and at technologists and developers. The
report aims to give an overview of the space for iPhone new-comers and useful guidance for those wishing to move
into iPhone development. We’ll point you at iPhone related events, iPhone news, iPhone development tools and
training and iPhone developers themselves.

The author of this report is Kisky Netmedia is a consultancy based in Liverpool, UK, which specialises in Social
Mobile Strategy; advising businesses and public sector clients how to harness new and emerging technologies and

This report was commissioned by the International Centre for Digital Content (ICDC) in Q3 2008. Liverpool John
Moores University’s International Centre for Digital Content is a centre of excellence for the research and
commercial exploitation of digital content. ICDC is supported by both the European Regional Development Fund
under Objective One for Merseyside, as well as the North West Development Agency.

For further information, visit: www.icdc.org.uk and www.kisky.co.uk

The first version of the report was launched in December 2008. This is version 1.2 and includes a few
new updates, most notably information on sales figures published by Apple in January 2009, and
information on the iPod Touch.

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iPhone Rocks!
Before we get into the hard facts; the statistics and projections, we thought we’d start with explaining a little about
the cult of iPhone. From the outlandish claims that the iPhone is indeed ‘magic’, or ‘the Jesus Phone2 ’ to the many
‘homages to iPhone’ videos on YouTube, it’s clear iPhone owners are passionate.

                                                          3 Marco  Tempest’s “iPhone Magic” Video on YouTube4 ,
                                                          uploaded in June 2007 is not only funny, but eerily spot
                                                          on. Apparently uploaded at the iPhone launch event,
                                                          Marco manages to foretell a few future apps way ahead of
                                                          the launch of the App Store. Marco pokes fun at the cult of
                                                          iPhone - ‘can it do no wrong?’ whilst demonstrating just
                                                          why iPhone is seen as cool by so many.

                                                          Watched over 5 million times, Marco’s iPhone Magic video
                                                          is much better than a lot of them but it’s not just Marco
                                                          who’s made an iPhone film. The less creative, (or magical),
                                                          focus on the real features of iPhone; the apps, and of
                                                          course why they ‘just love it’! Taking an objective view can
                                                          be hard in this sea of iPhone enthusiasm.

The cult of iPhone seems to have permeated every corner
of the world. Whilst the iPhone owner demographic was
initially made up of high income households (due to the
originally higher price tag) iPhone’s appeal is spreading.
We’ll focus more on who’s buying iPhones later, for now
we want to focus on the iPhone passion; in an attempt to
enthuse and inspire. After all, this is a marketeer’s dream;
Apple has harnessed a smart consumer willing to tell their
friends; tell the world even of their iPhone love and

And this is not just about the super geeks! (Right.)
In the early days of iPhone, TUAW (The Unofficial Apple
Weblog) put out a 5 call for pictures of 'iPhone around

2 http://www.techcrunch.com/2007/06/08/3-weeks-until-the-iphone-goes-on-sale/

3 Marco Tempest: http://www.marcotempest.com/

4 iPhone Magic Video http://uk.youtube.com/watch?v=lcB8CKa73B0

5 http://www.tuaw.com/photos/iphones-around-the-world/626262/

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Europe'. And obligingly you’ll find a picture of your author demonstrating an iPhone in Amsterdam via the TUAW

                                                Whilst researching the enthusiasm for the iPhone via imagery, a
                                                trend emerged; 'iPhone portraits'. It seems the bold and the
                                                beautiful don't get their portrait taken without one! More iPhone
                                                Portraits are here on Flickr.com, 6 a popular photo sharing website.
                                                One thing’s for sure; they're all just so much better than the pictures
                                                you get if you search for 'another mobile handset' portrait!

                                                It’s true to say that these images do not represent all iPhone users,
                                                but a large number of people for whom iPhone is indeed an icon. 7

So what sets these consumers aside from
‘normal mobile phone users’ (known in the
mobile industry at least, as ‘normobs’) 8? Are
these really smart consumers? Who says so?
Steve Jobs says so. In a recent Engadget
article, Steve is quoted as ‘calling Apple
customers’ "the smartest, more product-
aware customers in the market." 9 Being a
“smart” consumer - seems like the perfect
compliment; “Thanks for being clever enough
to buy our products!”

Whether these consumers who are willing to
make films and portraits about their love for
iPhone are indeed smart, is not the issue. They are pretty tech savvy, fashion conscious ‘sneezers’ (those early
adopters who encourage friends to buy the ‘new new thing’); importantly, Apple needs to have a broader appeal
outside those that instantly (smartly or otherwise) adopted the cult of iPhone; if it’s to do what it did with iPod and
create an ‘iPhone Generation’. But Apple needs not worry; iPhone has quickly transcended the niche and with the
launch of iPhone 3G specifically, has gone mainstream.

6 http://www.flickr.com/search/?z=t&l=cc&w=all&q=+iphone+portrait&m=text

7 Images from: www.flickr.com/photos/robhardingii/2787936139/ www.flickr.com/photos/b3ni/2400859727/ and

8 http://www.mobileindustryreview.com/2008/02/the_term_normob_hits_the_big_time.html

9 http://www.engadget.com/2008/10/21/apple-q408-results-out-6-9m-iphones-sold-record-mac-sales

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iPhone Sucks!
Of course not everyone’s a fan of iPhone and not everyone’s a fan of Apple Inc. Traditionally Apple attracted a
certain type of consumer. ‘Smart’ or not, they came from higher income households and were prepared to pay
more for an Apple computer than a PC made by someone else. This consumer is interested in design and
functionality over cost; and is extraordinarily loyal. The term ‘Switching’ 10 in modern day computer terminology has
been adopted by Apple to mean ‘someone switching from a PC to a Mac’. There’s no backwards application of the
term; it’s not also used to mean a Mac user who feels like a change so moves to a PC.

                                              Apple has its customers hooked; and perhaps it is this devotion which
                                              alienates some of those who are not Apple customers. Ads like ‘I’m a
                                              PC and I’m a Mac (left) 11, point a finger of fun at PCs. The ads portray
                                              PCs as ‘a bit stupid’ compared to Macs. It’s not surprising then that
                                              amongst the army of consumers worldwide there are a few ‘non
                                              believers’, those that don’t want to believe they’re using inferior
                                              technology. Apple inspires passion; from customers who love their
                                              products to the people (who are often not Apple customers) who hate
                                              them. This inspires heated discussion on blogs and user communities; in
                                              which often neither side takes a particularly balanced view.

                                          It is often hard to know if what you’re reading is balanced journalism, or
                                          biased or ill informed opinion. Offering insight into the technology
                                          platform, the mobile industry, or marketplace requires a significant
amount of skill and experience, in considerably complex areas. iPhone has forced many parties to sit up and take
notice; to weigh up pros and cons, to identify and quantify markets and opportunities. And as with anything online,
in 2008 at least, you’ll most probably be reading commentary from many authors in one space. Several voices,
perhaps some are tech journalists, pro or amateur bloggers, some may be users and owners, some may even be
competitor plants. What you can be sure of is that by launching such a game-changing device, backed up by a
revolutionary business model, Apple has not only grabbed market share, but also considerably ‘ruffled feathers’.
Not everyone likes a success story, and occasionally this results in unbalanced reporting. Don’t believe everything
you read about iPhone! not everyone; even technology pundits get it right all of the time, or offer you a balanced
article from which to make up your own mind.

Daniel Eran Dilger is a blogger writing Roughly Drafted Magazine; Daniel gets to the bottom of the anti-iPhone
commentary and tells you how it really is. Many of Daniel’s articles explain the background behind the technologies
and market conditions, even the personalities at the top of these corporations. His article ‘The iPhone Monopoly
Myth’12 offers a deep insight into the motivation of many who claim “iPhone sucks”!

10 http://www.apple.com/getamac/

11 http://uk.youtube.com/watch?v=VEVjILqU3pU&feature=related

12 http://www.roughlydrafted.com/2008/09/18/the-iphone-monopoly-myth/

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Before iPhone
iPhone is emotive: both its supporters and naysayers are passionate and noisy, and many are relatively eloquent.
All are gradually developing a deeper understanding of the importance of iPhone; just how it is changing mobile as
we know it. Whilst iPhone has ramifications for the wider technology world, in order to fully understand the impact
of the iPhone it is important to have at least a basic understanding of the mobile industry. An industry that some are
relegating to ‘Mobile 1.0’, in the shadow of Apple as they charge straight into the mobile arena; rendering useless
version 1.0 instead, seemingly effortlessly creating their own Mobile 2.0 platform and ecosystem.

The mobile industry ‘traditionally’ in the 2000-2006 period (pre-iPhone) comprised:
    • Network Operators (carriers);
    • Handset Manufacturers; and
    • Software providers (OS and apps on the handset or to download).

In addition there were a host of:
    • Mobile Payment Gateways;
    • Software platforms: the “middlemen” between software developers and consumers;
    • SMS Providers, Gateways, and Aggregators; and
    • Content providers (think ringtones, ‘wallpapers’, and ‘logos’).

These interlinked providers all have the aim of taking a percentage share of transactions that occur over the mobile
data network. This small village of providers was not open to outsiders; each aimed to protect their share of the
mobile data ‘pie’. The mobile industry was indeed a “walled garden”; and the industry itself not only accepted this
description; but traded on it. As the industry matured, some sought to open mobile; authors Ajit Jaokar and Tony
Fish were instrumental in documenting the industry and its future potential in their book ‘Open Gardens’13.

“While the mobile data industry holds considerable promise in future, the existing ecosystem is challenging for the
'grassroots entrepreneur.”

They acknowledge that the mobile data industry is a tough place for entrepreneurs; and indeed the incumbents
want it to stay that way. But that for the industry (including its incumbents) to thrive, innovation must happen.

Perhaps the best way to describe the industry is from the viewpoint of an independent developer. Let’s imagine a
developer has a great idea for a mobile application. Maybe it’s for a specific handset / feature set, or maybe it’s an
app that can be made to work on many handsets (more likely). If, for example, the developer chose a platform
such as Symbian, there’s still a lot of work to do to ensure the application does indeed work on all Symbian
phones. For the application to successfully run on a range of handsets the developer will have gone to significant
lengths to test it in multiple environments. They may use a service like TestQuest14 or outsource testing to
companies such as Photon InfoTech15 offering low cost off shore mobile testing services.

13 http://www.opengardens.futuretext.com/

14 http://www.testquest.com/

15 http://www.photoninfotech.com/

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The next hurdle is the fact that even a great, well tested application has no audience. A developer has a choice:
they can approach a handset manufacturer, or a carrier, or both, or they can opt to ignore the ‘walled garden’ of the
mobile industry proper, and either sell it on the ‘alternative applications’ market, or promote it themselves. It’s not
just handset manufacturers who say what goes onto the phone; the network operator also has a say. They’ve done
a deal with the handset guys which dictates what you get on your home screen. So doing a deal with either
handset manufacturers, or carriers is difficult. Your application bundled on a new handset could indeed be
lucrative, but it’s rare. So most developers opt for an alternative platform such as mobile application portal
Handango. But platforms like Handango take high percentage fees - currently now 40% plus tax16.

The combination of:
       • multiple development environments; all with different standards and conventions;
       • complex and costly testing;
       • inability to distribute on the handset via a manufacturer or operator; and
       • low return from alternative distribution platforms
has meant that the mobile applications market stagnated; certainly in terms of the customer experience.

For consumers; there has been little choice or innovation in mobile content or applications. For years the industry
has sought to drive consumption of mobile services; but without delivering anything new. That’s not to say that
customers won’t try new things, but the reality has been that many mobile customers rarely try new services. The
public has a distrust of mobile, perhaps due to reports of scam services over charging customers for ‘reverse bill

Certain forms of mobile content have established themselves; ringtones and mobile games developers have done
well in this environment. Because companies specialising in these areas cannot deal direct with manufacturers or
operators, they have often created their own distribution platforms, web and mobile portals for example. Much of
the effort involved in selling mobile content however has more to do with other non-mobile forms of marketing and
so these developers, whilst they may turn profit, rarely innovate. A successful company dealing in ringtones
operates by employing teams of staff to create TV adverts (in Flash for example), and then more teams to buy
advertising space on cable channels. Mobile content ‘the product’ is a tiny part of the business. This situation
favors throw-away content and ideas; and, in a space where many players require a cut, it favors over-priced and
low quality user experiences.

A successful strategy in this mobile marketplace is to run a low cost development shop which churns through many
ideas; content, applications or games with a short shelf life. Mobile games and application developers can less
easily follow the ringtone model, as the product itself needs a certain level of quality but many will develop many
ideas at once; in the hope that one will be a big hit. This risk model is not necessarily a bad one and some argue
that this is an emerging model on the iPhone platform too. What made this particularly unexciting in the traditional
mobile market however, is that the handset capabilities were also poor, so that even conceptually sound
applications and games made for lackluster customer experiences.

16 http://developer.handango.com/

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Towards “Open Mobile”
People have for a long time been speculating about what a more open mobile environment may look like. And
‘open mobile’ needs large scale thinking - across handsets, operators, software and distribution. The aim for a
more open mobile ecosystem is that developers would more freely be able to create and distribute content and
applications; driving use - which would in turn mean that the whole value chain benefits.

In recent years, handset manufacturers and network operators are offering more support, for example Orange
Partner17 programme is active in supporting developers via a range of initiatives. New forms of mobile testing may
gather momentum; for example Mob4Hire18 is a service which offers ‘Crowd Sourced Mobile Testing’, asking
remote individuals to test software; and rewarding them for doing so.

A core opportunity is distribution; enabling developers to reach their audiences and to make a fair profit from each
download. Another core opportunity is to open the device itself, and that’s where Android 19 lead by Google and the
Open Handset Alliance20 comes in. “Android is a software stack for mobile devices that includes an operating
system, middleware and key applications. The Android SDK provides the tools and APIs necessary to begin
developing applications on the Android platform using the Java programming language.”21

Developers can create applications that run on Android; and handset manufacturers can take the core Android
code (developed by Google) and customise it to run on their handsets. Android is new; and with very few devices
available its success is still to be determined. The open principle however will attract many new developers. If the
theory is correct, the openness both of Android and of iPhone although different approaches; should mean that
more developers are attracted to develop (and design) for mobile.

As development (and associated testing and distribution) across mobile in general gets easier, the opportunity and
profit margins in mobile application development increase. In turn, as handsets become ever more capable, the
outlook for mobile is positive; for the newcomers and to some extent for the incumbents. If developers with fresh
ideas can invigorate a stagnant market everyone benefits; including consumers. For further reading, a great mobile
industry blog which charts the rise of new and emerging mobile services, businesses and platforms is Rudy De
Waele’s m-trends blog at http://m-trends.org.

Whilst many developers do not believe the iPhone platform is truly ‘open’ as Apple control what is allowed onto the
App Store - and to an extent, how developers create apps, it is arguably the first platform, which enables any
developer to sell their app to potentially millions of customers (customers who want apps). In this respect, Apple
has ‘opened’ the mobile platform for many developers for whom previously making money from mobile was not an

17 http://www.orangepartner.com/

18 http://www.mob4hire.com/

19 http://en.wikipedia.org/wiki/Google_Android

20 http://www.openhandsetalliance.com/

21 http://code.google.com/android/what-is-android.html

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Key Dates
The iPhone has only been available to buy anywhere since June 2007; but in less than a year and a half it has
established itself as a game-changer. In truth, anticipation of the iPhone started long before the summer of 2007,
with speculation on what an Apple phone might 'look like' going back way earlier. The earliest mention if iPhone is
from 1999 when Apple registered the iphone.org domain name. Inspired by "iPhone timeline" at iPhone Gold22 the
following timeline shows key dates for iPhone.

August 1993: Apple introduces its first handheld device the Newton23

February 1998: Steve Jobs returns to Apple and kills the Newton along with various other products.

14th December 1999: Apple acquires the domain name iphone.org, which directs visitors to apple.com/iphone.

9th January 2007: Steve Jobs announces the iPhone at the MacWorld conference.

29th June 2007: The iPhone is launched in the USA.

5th September 2007: The iPod Touch is launched. The iPhone is reduced in price by $200 and the 4GB model is

9th November 2007: iPhone is released in the UK on the o2 network. iPhone is released in Germany on the T-
Mobile network.

5th February 2008: Apple releases the 16GB iPhone.

6th March 2008: Apple releases the SDK (Software Development Kit) enabling developers to create applications for

9th June 2008: Apple announces the 3G iPhone and the App Store at WWDC (Worldwide Developer Conference)
in San Francisco.

11th July 2008: iPhone 3G is available in 22 countries.

February 2009: iPhone 3G is available in 80 countries.

At time of writing (updated February 2009)

iPhone 3G is available in Argentina, Australia, Austria, Belgium, Botswana, Brazil, C. African Republic, Cameroon,
Canada, Chile, Colombia, Croatia, Czech Republic, Denmark, Dominican Republic, Ecuador, Egypt, El Salvador,

22 http://www.iphonegold.org/iphone-timeline.html

23 http://en.wikipedia.org/wiki/Apple_Newton

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Estonia, Finland, France, French West Indies, Germany, Greece, Guatemala, Guinea, Honduras, Hong Kong,
Hungary, India, Ireland, Italy, Ivory Coast, Jamaica, Japan, Jordan, Kenya, Latvia, Liechtenstein, Lithuania,
Luxembourg, Macau, Madagascar, Mali, Malta, Mauritius, Mexico, Moldova, Netherlands, New Zealand, Nicaragua,
Niger, Norway, Panama, Paraguay, Peru, Philippines, Poland, Portugal, Puerto Rico, Reunion Island, Romania,
Russia, Saudi Arabia, Senegal, Singapore, Slovakia, South Africa, Spain, Sweden, Switzerland, Taiwan, Thailand,
Turkey, United Arab Emirates, UK, Uruguay, USA, US Virgin Islands, Venezuela. (That’s 80 countries).

iPhone Availability Map: Now

iPhone Availability Map: Soon

iPhone 3G will soon be coming to Equatorial Guinea, Guinea Bissau, Indonesia, Qatar.

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iPhone Sales Figures
(Updated February 2009)
It’s true that since the announcement of the fourth quarter 2008 sales figures, iPhone is looking pretty healthy.
Indeed Apple got off to a great start with sales of 1.38 million in the few short months of 2007. iPhone launched
29th June ‘07 giving it till end of September to reach that figure. (Apple’s financial year runs from the end of
September). The sales figures are identified below - and you might notice some anomalies; growth, then a dip,
then a bigger dip, then ‘insanely great24’ figures in Q4 08. It is also true that the iPhone 3G has already outsold the
original iPhone (unofficially now referred to as iPhone 2G); and that latest sales figures represent a much larger
global market than in the iPhone’s first year in just a handful of territories. We’ve untangled the reports, predictions
and analysis to bring you hard facts - checked against Apple’s own quarterly reports.

Quarter 4 2008: Headline Snapshot
         •   Total iPhones sold to date: 17 million
         •   Total 3G iPhones sold (Q4 08 - Q1 09) across 80 countries: 11.25 million
         •   Total iPhones (2G and 3G) sold in 2008: 13 million
         •   3G iPhones: 1 million sold in 1st weekend
         •   Apple’s sold more 3G iPhones than original iPhones 25
         •   Techcrunch estimates Apple is on target to sell 40 million iPhones in 2009
         •   iPhone now outsells Blackberry 26
         •   In revenue terms Apple is the No3 handset manufacturer worldwide

The following figures are for iPhone (2G and 3G versions). For 3G figures only, take figures from Q4 08 and Q1 09.

iPhone Sales by Quarter Since Launch

                                               Original iPhone                                      iPhone 3G
                      Q3 07          Q4 07          Q1 08         Q2 08           Q3 08         Q4 08       Q1 09

 Units sold in
                     270,000       1,119,000     2,315,000       1,703,000    717,000         6,892,000    4,363,000

Cumulative iPhone Sales Since Launch

                      Q3 07          Q4 07         Q1 08          Q2 08           Q3 08         Q4 08        Q1 09

                     270,000       1,389,000     3,704,000       5,407,000   6,124,000        13,016,000   17,379,000

24 (A favourite Steve Jobs expression)

25 http://www.techcrunch.com/2008/08/26/iphone-3gs-now-outnumber-first-generation-iphones/

26 http://www.dmwmedia.com/news/2008/10/22/apple-iphone-outsells-blackberry-last-quarter

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                     Q3 07          Q4 07        Q1 08           Q2 08           Q3 08           Q4 08            Q1 09

      Year                        1,389,000                                                    13,016,000

Growth in iPhone Sales
The previous tables and graphs below demonstrate the sales curve. In terms of quarter on quarter results, the
launch of iPhone 3G heralds a positive future; but it wasn’t always like that; Apple struggled to deliver exponential
growth in early 2008. Sales figures for the third quarter 2008 showed a slowdown in sales; but this was due to the
fact that consumers were awaiting the iPhone 3G; in fact Apple stopped production of iPhone 2G almost 2 months
before the introduction of the iPhone 3G. Q1 09 results also show a dip, perhaps due to the fact that many 3Gs
were sold as upgrades. Quarter 2 09 results will give a better indication of steady growth (estimate reporting date
end of April 09).

             iPhone Sales by Quarter                            Cumulative iPhone Sales

                                                 7000000                                                 20,000,000
        Q3 07 Q1 08                              0
                             Q3 08       Q1 09                 Q3 07 Q1 08                           0
                                                                             Q3 08
                                                                                             Q1 09

Market Share
As an indicator of success, market share is often quoted in relation to iPhone; both by analysts claiming Apple is
doing well, and doing badly. The smartphone market is the market in question; although some may argue that
‘mobile phone handset’ market share may be a better indicator of the rate of market penetration. The following
show data from both Q3 2008 (via Rubicon 27) and from January 2009 (via Admob).

27 http://en.wikipedia.org/wiki/Smartphone

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Smartphone % Market Share (Q3 2008)

        Symbian             iPhone           Blackberry        Windows Mobile          Linux             Other

          46.6               17.3                15.2               13.6                   5.1             2.2

Smartphone % Market Share (January 2009)

                         iPhone (incl
        Symbian                              Blackberry        Windows Mobile          Palm              Other
                         iPod Touch)
          44.0               32.0                9.0                8.0                    4.0             3.0

The following chart shows the data for Smartphone OS market share (data from Admob)28. A key issue in these
figures is speed. The ‘Other’ category includes data (or rather a lack of ) from Brew, and Android. Android is newer
than the iPhone platform; and with no devices yet - is set for growth, but apart from Android, all the other players in
this market have been around a long time.




                      Symbian            iPhone            Blackberry               Windows Mobile
                      Palm               Other

In a very short space of time iPhone has taken a significant bite out of the smartphone market. What this also
shows is that ‘Symbian’ smart phones held 44% market share, actually the Symbian OS (Operating System) is
used by multiple manufacturers and therefore the data that grabbed bigger headlines is that which compares
device manufacturers (and not OS providers). At the end of Q3 2008, Apple’s iPhone outsold RIM’s Blackberry,
and as Blackberry had been the leader in the smartphone device market, this came as a shock. Blackberry has

28   http://www.admob.com/marketing/pdf/mobile_metrics_jan_09.pdf

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long been a favorite for smartphone users; with its enterprise integration, always on connectivity and the ‘Push
Email’ that initially made it famous and popular.

As many tech bloggers and analysts speculate, iPhone will continue to grow further and Android will soon see a
larger chunk of the pie; most analysts commentate that it will be a fairly close fight between those at the top.

Whilst many within the mobile industry benchmark iPhone against smart phones; research shows it’s not just smart
phones that iPhone is displacing. A survey from March 2008 by Rubicon Consulting29 indicates iPhone is taking
market share elsewhere. The survey details:

            • “About half the iPhone users surveyed said that it replaced a conventional mobile phone.
            • About 40% replaced a smartphone.
            • About ten percent didn't replace anything, meaning either that the iPhone is their first phone, or that
              they carry it in addition to a second phone.”

The curve is similar to the iPod market growth of a similar time. It may be sensible to assume Apple will execute a
similar ‘gameplan’ as for iPod; grow slowly at the outset then reach a mass market.

29 The Apple iPhone: Successes and Challenges for the Mobile Industry:

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Who’s Using iPhone?
                                                        Our own not-so-scientific polls would indicate that in the UK
                                                        and Europe; early on, there was a rather typical iPhone early
                                                        adopter ‘type’30, but that as time has worn on, it’s not just the
                                                        geeks that have iPhones. No, not geeks, and no, not just the
                                                        fashion conscious gadget freak, or the rich ‘lifestyler’. Not just
                                                        the city worker, with all the latest business perks, and no, not
                                                        just the rich kids.

                                                  UK figures are hard to come by but US demographic data
                                                  shows that whilst originally iPhones were mainly owned by
                                                  those with a higher than average income; things are changing
                                                  as Apple is seeing broader appeal. Certainly as 2008 draws to
                                                  a close, we’ve seen a broader mix of people out and about with
                                                  iPhones. What’s more, it’s often young women31 who are to be
                                                  overheard in cafés amazed as they have a play with a friend’s
                                                  iPhone for the first time. This also echoes the growth of the iPod
which was initially a niche product but with Windows, compatibility soon exploded as it achieved a mass market

According to a new comScore32 report, "All about iPhone,"
iPhone adoption since June rose 48% among those earning
between $25,000 and $50,000 per year and by 46% among
those earning between $25,000 and $75,000. These growth
rates are three times that of those earning more than $100,000
per year. Overall, iPhone penetration grew 21%.

"As an additional household budget item, a $200 device plus at
least $70 per month for phone service seems a bit extravagant
for those with lower disposable income," said Jen Wu, senior
analyst, comScore, the report's author. "However, one actually
realizes cost savings when the device is used in lieu of multiple
digital devices and services, transforming the iPhone from a
luxury item to a practical communication and entertainment
tool." 33

30 Nathan Borror on Flickr. http://www.flickr.com/photos/sketch22/2045151206/

31 Image of Woman and her new iPhone is from Mickipedia on Flickr: http://flickr.com/photos/redcarpet/2069646878/

32 http://www.comscore.com/iphone/

33 Via http://www.tmcnet.com/usubmit/2008/11/04/3757144.htm

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Competitors, what competitors?
You may have heard of a term ‘iPhone Killer”; which is so far an oxymoron. Back in 2007 the iPhone competitor list
was pretty short. The handset industry had been given a wake up call: make a better product or lose market share.
Some handset manufacturers took note and launched ‘iPhone alternatives’. Well, they upgraded how their
handsets looked and worked. A bit. Many just made devices which looked a bit (or a lot) like iPhone in the hope of
attracting consumers who wanted something that looked cool, but didn’t really care what the device did.

                                       Some competitors focussed on the smartphone model; implementing
                                       ‘smarter’ capabilities, others focused on looks. The Mobile Whack Blog ran an
                                       article in February 2007 listing the top ten iPhone competitors 34. It offers a
                                       strange selection of devices; mainly on the list due to their bizarre looks rather
                                       than anything else; indeed time has told that none were iPhone ‘killers’. (The
                                       image to the left is the Nokia Aeon concept phone.) Just what is a ‘concept
                                       phone’ by the way?

                                       A more recent Mashable article “There are no iPhone Killers”35 by Stan
                                       Schroeder says it better: .

“... even on its most basic level, the user interface, the iPhone is a supreme product compared to everything else
I’ve seen on the market; in fact, it’s not only better, it feels like the original one, which is the position everyone wants
to be in. Back when the first iPhone was announced, I was sure that Nokia and other mobile giants will be able to
come up with an answer fast, but it seems as if they’re still stumbling in the dark.”

Stan compares the new entrants in what appears to be an “iPhone Look-A-
Like Competition”. These iPhone imitations remind us of a time when MP3
player manufacturers attempted to disguise their products as iPods once iPod
became the personal music player of choice.

iPhone has been classed by many reviewers and writers as a Smart Phone
but this analogy simplifies iPhone too much. iPhone is a desirable item, a
sought after device, a fully functional Swiss Army Knife of a mobile device. It
effortlessly ‘does business’ enabling mobile workforces to communicate on
the move. That’s where the smart phone similarities end as iPhone does more
than any other smart phone, most importantly it appeals to a broader range of
consumers as a handset in its own right - ‘smart’ device it may be; iPhone is certainly not limited to the smart
phone market.

Whilst interesting new handsets may come soon; there’s certainly nothing else now that offers a desirable, feature
rich device, which synchs with your personal and professional digital lifestyles, is hooked into a platform which
offers great content and applications; with an endless supply of upgrades and new applications.

34 http://www.mobilewhack.com/top-ten-list-of-iphone-competitors/

35 http://mashable.com/2008/06/25/iphone-killers/

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iPhone The ‘Device’
Some readers will naturally not already own an iPhone and so for those readers, here’s a run down of the ‘device’
itself. Of course the best way to find out more is to try one at your nearest Apple Retail Store36 or o2 shop 37.

                                               “Introducing iPhone 3G. With fast 3G wireless technology, GPS
                                               mapping, support for enterprise features like Microsoft Exchange, and
                                               the new App Store, iPhone 3G puts even more features at your
                                               fingertips. And like the original iPhone, it combines three products in
                                               one — a revolutionary phone, a widescreen iPod, and a breakthrough
                                               Internet device with rich HTML email and a desktop-class web
                                               browser. iPhone 3G. It redefines what a mobile phone can do —

                                               But of course iPhone does indeed do more than “Phone, iPod,
                                               Internet”. Here’s is a list of its other inbuilt features:

         •   Mail - HTML email integrating with your computer based email accounts
         •   SMS - for text messaging
         •   Maps with GPS
         •   iTunes - so you can buy music
         •   App Store - so you can buy applications
         •   Calendar
         •   YouTube
         •   Photos + Camera
         •   Stocks, Weather and Notes
         •   Calculator

And to find out about what’s new on iPhone 3G we suggest
you hear it from Steve Jobs by watching him unveil iPhone 3G
and its capabilities at WWDC (Apple’s Worldwide Developer
Conference) in January 2008.

Follow this link to view the video on YouTube or here via Apple’s

36 http://www.apple.com/uk/retail/storelist/

37 http://www.o2.co.uk/

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What about iPod Touch?
Indeed we’ve not been ignoring iPod Touch for any reason other than the fact that the exact figures on sales and
market share have never been published and therefore it is difficult to write authoritatively on the success (or
otherwise) of the iPod Touch.

iPod Touch is essentially an iPhone without the phone; and without the camera. This means it also doesn’t have
data but it does have wifi. So iPod Touch users can run many of the apps available in the App Store, and if they live
in a city with plenty of wifi they can use their iPod Touch to access Location Based Services whilst out and about.
Many iPod Touch users use their iPod Touches as iPods and entertainment devices (using Games and Apps) at
home and on the move. Some users may opt to buy an iPod Touch if they do not wish to switch network
operators (perhaps mid contract) just to get an iPhone, but they do want the iPhone experience. Insightful
commentary on this can be found via Matt Rosoff’s blog post on CNet News 38.

So how many iPod Touches are there out there? Well figures aren’t published, but we do know that in Q1 2009
Apple sold 22,727,000 iPods (22.7m) 39 - from iPod shuffles, to iPod minis to iPods to iPod Touches. One way to
estimate how many Touches are in use is to look at Application Analytics. Services such as AdMob report data from
their analytics services. Developers add AdMob analytics to their Apps and AdMob tracks those apps offering data
on which devices access those ads. AdMob’s latest insight report shows data for January 2009 as follows.

                                     % Share in January

       Worldwide iPhone                       11%

     Worldwide iPod Touch                    7.4%

           USA iPhone                        16.8%

        USA iPod Touch                       12.3%

From this we could assume taking worldwide figures as an example 7.4 as a percentage of 11 = 0.81. Or rather
that for every 800,000 iPod Touches, there are 1m iPhones. Following this, we could argue that if there are 17m
iPhones that there are 13.6 million iPod Touches in use. However this is pure speculation and the figures could be
skewed by people either using iPod Touches more (in a home entertainment setting) or that there are actually more
iPod Touches as data from ads show up less as iPod Touch users have a data connection (accessing these ads)
less of the time. However you look at it, from a developer’s perspective, it is important to consider how your app will
work on an iPod Touch as there are indeed plenty of the about; even if we don’t know exactly how many.

38   http://news.cnet.com/is-the-ipod-touch-cannibalizing-iphone-sales/

39   http://www.apple.com/pr/library/2009/01/21results.html

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Data: Setting iPhone apart
iPhone looks and works like no previous ‘mobile phone’, or even ‘smart phone’, but there is another key reason
why iPhone is a world-beater; Apple’s deals with mobile operators. Traditionally, mobile operators have not shared
any revenue with handset manufacturers but it is rumored that those that won the prized iPhone deal had to give
up 10% of subscriber revenue to Apple. When iPhone finally launched in the USA it was exclusively with AT&T 40. In
the UK iPhone is available exclusive on the o2 network. In some countries (including Australia) multiple operators
have attracted Apple; but it is fair to say in countries where only one operator carries iPhone, other operators feel
they have lost out. Even if the operator that carries iPhone is sharing revenue with Apple; they still got a good deal
in terms of attracting new users and being around the most important mobile development for many years. Perhaps

Apple negotiated hard with operators not just on percentage revenue share but on user services. Perhaps one of
the single best features of iPhone is not a feature of iPhone at all but a feature of the iPhone / Operator deal:
unlimited data.

Most previous mobile plans offered a certain amount of data but data over and above a small fixed amount was
costly. Before iPhone, unlimited data (in the UK at least) was the luxury for the top business tariff subscribers and
used only by those who ‘really needed it’. This of course had a stifling effect on the development of innovative user
services. Any new service which relied on users being able to do anything (access content or communicate) over a
data connection suffered big time.

A case in point was an early release of Jaiku’s 41 mobile client42 for Series 60 phones. Jaiku fans downloaded the
app and ran it on their phones; it enabled them to see the activity and availability of other friends on the Jaiku social
microblogging network. The app sent updates periodically over the phone’s data connection; and unless the app
was disabled, it also did this if users roamed across country boarders. Now if you have an unlimited data plan, this
is all fine. But if you had a limited data bundle, what this meant was instead of limiting your use of such an
application, you probably wouldn't bother downloading it at all. Such is the fear amongst some users about data
charges (how do I know when I’ve used a Megabyte?) many mobile subscribers with limited data plans would not
use any data services at all. And it’s not just new social apps that suffered, imagine mobile applications for the
travel industry. There are many mobile application developers who would love to create applications for travelers:
imagine translation services for when you’re on holiday. These apps just simply won’t work until data is unlimited
and until international ‘roaming’ data is very cheap. So some may argue that data charges are holding back
innovation, so how did Apple innovate?

In what seems like a miracle, Apple managed to get network operators to agree to offer unlimited data on all iPhone
plans and they conceded that iPhone users should also have pretty good (near unlimited) wifi access. Before
iPhone, mobile handsets didn’t have wifi capabilities; the operators wanted users to do everything over the
potentially more profitable GRPS (2G), EDGE (2.5G), or UMTS (3G) data networks.

40 http://www.att.com/

41 http://www.jaiku.com/

42 http://jaiku.com/mobile

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You might imagine that no operator would be prepared to concede to Apple’s wishes and not only enable web
access via wifi capability but to enable unlimited data plans. However this may not be so hard to imagine if
customers really were just not using any data to speak of.

Further more, offering wifi in addition to expensive data means that wifi takes the strain away from the mobile data
networks. The wifi access through partners in the UK such as The Cloud means that the data network is not so
stretched with iPhone customers browsing the web and receiving (Push) email over wifi when in a wifi zone. But
when iPhone users move outside a wifi zone, then any data they send and receive is all covered in their plan. And
with a feature rich device like iPhone, with videos, photos, web pages and applications being downloaded, that
could be a lot of data.

iPhone is the first device to really come with data ‘as standard’; rather
than data being seen as an add on service, an upgrade; only for
business. Unlimited data is what makes iPhone as successful as it is;
without it iPhone would be rather crippled (like many other mobile

What is making iPhone truly unique is the range of applications available.
No two iPhone users will use iPhone in the same way and there’s already
something for all (well, most) tastes. Successful applications are often
ones which make the most of mobility. Many are also social applications.
A next generation version of a social mobile microblog application is
Twinkle for iPhone. Twinkle shows you who’s saying what in the popular
social network Twitter; but not from your friends and followers, but from
people near to you, wherever you are. It lets you update your status via
the app and shows you who’s nearby.

There’s no way that these applications, (and the businesses that create them) could be successful if iPhone users
had to worry about how much ‘data’ they were using.

                            Unlimited Data then could actually be what was holding Mobile 1.0 back. With always-
                            on and ‘worry-free’ access, being mobile becomes interesting. Whilst many plans for
                            other mobile phones have not yet caught up; we envisage they will soon as iPhone and
                            the success of iPhone applications will mean other mobile consumers becoming more
                            demanding. Perhaps data is not so useless to ‘normal mobile users’ after all.

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iPhone for Enterprise
iPhone is also appealing to businesses small and large. As we showed, Apple has achieved a 17% market share
over its nearest rival RIM’s 15% in the smartphone market. At the January 2008 WWDC Steve Jobs began his
introduction to iPhone 3G by discussing how iPhone was being adopted by enterprise. From Disney to the US
Army, iPhone was offering a robust business communications to many of the Fortune 500 43 companies. So what
makes iPhone a great business phone?

                                                                   “Simple. The same features that make iPhone a
                                                                   revolutionary mobile device. With fast 3G wireless
                                                                   technology, maps with GPS and the new App Store,
                                                                   iPhone 3G puts even more amazing features in your
                                                                   hands. And with rich HTML email, full web browsing
                                                                   and support for Microsoft® Exchange ActiveSync* it
                                                                   delivers push email, calendar and contacts*. All new
                                                                   emails, calendar invites and contacts are sent directly
                                                                   to the iPhone 3G with no need to log on to an email
                                                                   account each time. And it gives mobile users secure
                                                                   access to corporate resources with Cisco IPSec VPN
                                                                   and network services with WPA2 Enterprise and
                                                                   802.1X authentication.” 44

According to o2: “corporate customers can also easily build their own in-house applications to meet distinct
business needs utilising iPhone Multi-Touch technology, the accelerometer, wireless connectivity and GPS. Or users
can simply download commercial applications directly to iPhone from the App Store.” There’s a custom App Store
for Enterprise and capabilities to deploy an application to multiple devices. Apple’s Enterprise deployment guide45
offers detailed information.

iPhone’s doing well in the enterprise; with some pretty big recommendations. According to Apple Insider46: “The
senior VP of IT at Disney also endorsed Apple's enterprise strategy on the iPhone, stating "Apple has really done
their homework, addressing issues of security, manageability, and integration. We currently have hundreds of
iPhone users and expect the demand to grow significantly with this release."

The fact that large corporations are taking to the platform indicates a massive opportunity for developers to create
bespoke business applications 47. There’s also extraordinary potential for many businesses who could switch to
much more intelligent mobile working via iPhone.

43 http://en.wikipedia.org/wiki/Fortune_500

44 http://www.apple.com/iphone

45 http://manuals.info.apple.com/en_US/Enterprise_Deployment_Guide.pdf

46 http://www.appleinsider.com/articles/08/03/06/apples_iphone_takes_on_the_enterprise.html

47 http://www.intelligententerprise.com/channels/enterprise_applications/crm/showArticle.jhtml?articleID=209000059

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iPhone Apps
With any new mobile device you might buy as a productivity tool, a fashion item, status symbol, or gift, you will
spend some time getting to know it, customising it, and then purchasing add-ons, plugins, and accessories.
And now Apps.

Apps (Applications) set iPhone apart from most other
phones. Whilst it is possible to run third party applications
on plenty of other mobile devices, Apple have made it very
easy to run third party apps on iPhone. Why? Well they’re
(nearly) all in one place for a start. Developers can submit
their application to the App Store48 meaning consumers
have just one destination to go to for a growing range of
new applications. In turn, because the App Store is
accessed via iTunes, it’s on everyone computer (Mac or
PC) as well as accessible via every iPhone. This means
that developers have a ready made audience for their
applications. And they have a sales channel, a

Whereas in a Mobile 1.0 world, a developer struggles to find an audience in an environment where most people do
not install new applications on their mobile devices; iPhone developers have their audience right there, hungry for
new applications to try and buy.

Apple claims that iPhone apps are “unlike anything you’ve seen on a phone before” and “Applications designed for
iPhone are nothing short of amazing. That’s because they leverage the groundbreaking technology in iPhone — like
the Multi-Touch interface, the accelerometer, GPS, real-time 3D graphics, and 3D positional audio”.

Certainly finding an easily accessible store full of beautifully made applications that enhance the iPhone experience
is new - and yes these apps are often in a class of their own. Apple has published a guide to applications that help
you with all areas of your life at: http://www.apple.com/iphone/iphone-your-life/.

Key App Stats
The key stats are:
        • 60 million apps downloaded in first month since launching the App Store
        • Over 2.2m apps downloaded per day
        • 20,000 49 apps in the App Store (January 2009)
        • 500 million app downloads

48 http://www.apple.com/iphone/appstore/

49   http://www.tuaw.com/2009/02/10/app-store-reaches-20-000-apps/

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Some speculate50 that Apple could hit the 1 billion apps downloaded mark by the end of the store’s first year of
availability, (sometime in 2009). To put some context to this; that would be quicker than iTunes took to reach its
billionth song download 51.

Web Apps
Before we launch straight into what are known as ‘Native Apps’ we should also consider another form of iPhone
App: the web app. A web app is simply a specially optimised version of a web app web service or website that
runs via the iPhone’s web browser: Safari.

When an iPhone user visits a web app, its just a URL to a site like any other but when the site notices they’re using
an iPhone it serves them a special ‘for iPhone’ version of the site. It’s not that native apps are ‘better than’ web
apps, but that they are used in different situations. If you have a web service and want to offer an optimal
experience for iPhone users a web app may well be the most appropriate option. Some developers may create
web apps because of the technology choice. They can create slick looking experiences on the iPhone but without
needing to learn Objective-C enabling them to develop in a more familiar web technology. For a comprehensive
discussion on the pros and cons of iPhone web app development see Andrew Reutter & Andrew Trent’s article
“iPhone Development: Go Web, Young Programmer”52.

Favorite iPhone Web Apps

                                              Two iPhone web apps that demonstrate excellent design,
                                              implementation and grasp of why making the web experience special
                                              for iPhone users, are Facebook and xero.

                                              Everyone knows Facebook; and their web app53 is well, just a cut
                                              down, simple version of Facebook that makes it easy to use
                                              Facebook on your iPhone. xero is an online accounts service used by
                                              small and medium businesses the world over. The xero web app 54
                                              offers a simple view on your accounts data and enables users to easily
                                              perform key actions from iPhone.

                                           Whilst it is mainly web applications (such as Facebook the giant social
network, xero, the comprehensive web based accounts environment, or ebay - the auction service) that have
invested in making their web apps useful on iPhone; this points at a key issue for all web services. Whether you
have a web application or a ‘website’ that delivers information or promotes your product or company, a growing

50 http://www.techcrunch.com/2008/09/14/iphone-apps-downloaded-twice-as-often-as-songs/

51 http://www.roughlydrafted.com/2008/09/12/iphone-apps-store-growing-twice-as-fast-as-itunes-music/

52 http://www.gantthead.com/content/articles/241801.cfm

53 http://m.facebook.com

54 https://m.xero.com

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number of people will access your website via their iPhone. It needs to work on Safari on iPhone. Beware Flash
designers; iPhone currently does not support Flash so you may want to consider making an information based site
that can reach your (iPhone) customers.

With over 10,000 apps in the App Store, there’s a lot of choice and a lot of different types of application. From apps
for business, to utilities, to personal lifestyle apps, to games, to social network apps, to apps for social and political
change - it’s all there! Having tested out many of these apps we will discuss some of our favorites.

iPhone Games
iPhone is great for games. Whilst it’s certainly not a games device - a Nintendo DS, or Sony PSP, playing games on
iPhone is a lot of fun. There are the top quality App Store favorites like Super Monkey Ball, obviously a smash on
Gamecube, then Wii before iPhone. Super Monkey Ball works on iPhone because of iPhone’s accelerometer.

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The accelerometer detects movement - so the game relies on you tilting the iPhone to guide the monkey around
the game. Of course it’s not that simple, Sega’s unique gameplay, rich
graphical environments and characterisations also help to ensure this is so
much fun, but it’s possibly true to say that nothing this good has ever been
played before on a phone.

So games developers are making the most of the touchy feely nature of
iPhone, of the touch interface - and the gestural input made possible by the
accelerometer to create games that delight and entertain.

For many, this is the first experience they have of playing a game (other than
Snake55) on a mobile phone; it certainly is a great user experience and sets the bar very, very high.

                                        It’s not just the superstar games developers who have found success in the
                                        App Store. Pop Cap 56 has been developing simple, tactile online games for
                                        several years and has enjoyed considerable success with games like
                                        Bejeweled 2. Bejeweled 2 is “the phenomenal sequel to the classic gem
                                        swapping puzzler!” Take our word for it; it is addictive.

                                        These games both follow the format of games we know and love on other
                                        devices - games consoles and online games. iPhone has also attracted
                                        some fresh thinking in terms of multiplayer gaming on personal devices.
                                        Multi player games? Really?

                                         Touch Hockey is air hockey for your iPhone but of course as any air hockey
                                         fan knows, you need a formidable opponent to make it fun. Touch Hockey
                                         by flipside5 57 is perhaps the best air hockey game on iPhone (there are
                                         several). It demonstrates that you can develop much loved games for
                                         iPhone by designing specifically for
                                        the built in features of the device.
Touch Hockey makes use of the touch screen to enable two players to
compete. Super Monkey Ball and Bejeweled are games you’ll play on your
own, perhaps whist traveling. As well as being great games, they are good
‘time waters’ - something the mobile device should long time have
delivered but only now is coming into its own.

Touch Hockey is a social game - get your iPhone out in the pub for a game
of Touch Hockey and you’ll probably leave with more friends than when you

55 http://www.nokia.com/A4303014

56 http://www.popcap.com/

57 http://www.flipside5.com/

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More Fun Stuff
                                              Rather than running through a list of apps by type we’ll focus on a few
                                              of our favourite apps of note in the App Store.

                                              One that caught our eye is Benjamin Bunny a delightful book for
                                              iPhone created by LoL Software58. It’s one in a series of ‘Talkie’ books
                                              featuring the original gorgeous artwork and ‘heartwarming narration’.

                                              This points to a trend in the iPhone as a ‘parenting tool’.

                                                 “Your children can listen to the story narrated by Geva Patts whilst
enjoying the illustrations - or if they prefer - scroll across the page and read along with the text.” Parents seem
happy to hand their iPhones over to their kids; who it seems find the tactile, natural touch interface a breeze - for
entertainment and for learning.

                                              Hairstyle (and Hairstyle Light - which is free) offer hours of fun. The
                                              app lets you visualise all the hairstyles you’ve ever wished you’d had
                                              with hilarious results. It’s another demonstration of the variety of
                                              definitions of the term ‘application’. Is it a utility? A lifestyle app? A
                                              game? A toy? Whatever it is it is something that’s really appealing to a
                                              lot of people; it’s social and fun and works so well on iPhone.

                                              Koi Pond is the #1 paid App - and it’s well, “fish swimming around in
                                              your iPhone”. You can watch them swim around, splash the water
                                              about and you can even feed them with a shake of your iPhone.
                                              There’s no point to it other than it’s lovely and really therapeutic.
                                              And well worth the 59p.

Useful Apps
Of course there’s also a lot out there by way of business, productivity and utility apps. Many utility applications that
were in the App Store early on seemed to take their lead from utility apps we had been used to seeing on phones.
Simple alerts, trackers, measurement and conversion tools. Nothing very unique to iPhone. Here’s a selection of
applications which are doing well in the App store and certainly do offer more than a traditional mobile app:

        • Evernote - as it looks so good on the iPhone. (Apps like this and “Remember the Milk” will vastly outsell
          similar apps where less attention has been paid to design);

58 http://www.lolsoftware.com/

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        • Remember the Milk - for being one of the original (and also spectacularly designed) web apps with great
          iPhone integration;
        • Salesforce - the ultimate app for enterprise. If you need proof that iPhone is a business phone; here it is;
        • LinkedIn - Lets you do the LinkedIn thing via an iPhone App;
        • Stagehand by Woojijuice59- for controlling Keynote presentations from your iPhone; and
        • Remote - an app actually made by Apple - Remote lets you control the music on your computer or Apple
          TV via your iPhone.

Brands in the App Store
The App Store is full of apps but not yet full of brands; but it won’t be long before we see more branded “brought to
you by...” style applications as brands realise a desire to be in the pockets of millions of iPhone users. But how can
brands harness iPhone? This is no doubt a question asked by many interactive agencies - how can they add value
for their clients by offering an iPhone app? How can that iPhone app promote a brand whist offering a great user
experience in an iPhone-natural way? We took at look at a couple of apps with brands behind them; of one sort or

There’s a driving game branded by Audi which is not the ‘runaway success’ you might imagine. The game was
quite an early entrant to the App Store and as such could have done well to wait a while, and refine the ‘game
play’. The app has had a few negative reviews and certainly most people we have seen playing it find controlling the
car very difficult; which is a rather off brand message for a car manufacturer. Whilst the app looks nice, and could
be a success, implementation is everything with iPhone - and this is an example of the need for refinement.

                                              Barack Obama also has his own iPhone app which enabled iPhone
                                              users to follow his campaign. This was certainly an app (and a
                                              campaign) with a difference. Cleverly the application developers
                                              leveraged the power of supporters’ Address Book contacts on iPhone.
                                              Obama App includes the following features: “Call Friends: A great
                                              volunteering tool that lets you make a difference any time you want by
                                              talking to people you already know. Your contacts are prioritized by
                                              key battleground states. Call Stat: See nationwide Obama ’08 Call
                                              Friends totals and compare yours to leading callers’!”

                                              The Obama campaign was noted for its innovative (and relentless) use
                                              of Social Media; this is just one example. It’s fair to say iPhone helped
                                              in the campaign!

59 http://www.wooji-juice.com

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Not so serious but also very popular is iPint.
On the face of it a simple game; you slide a
pint of lager along a bar avoiding obstacles.
Once you’ve completed the task you get to
‘pour yourself a pint’.

The glass fills up and then you can drink it.
This makes use of iPhone’s accelerometer
to ‘slosh’ the beer around, and to ‘empty
the glass’ as you drink. This last part makes
for a hilarious gimmick, especially if you’re
already drinking in a bar with friends. This
app / game / toy is brought to you by
Carling. There’s no doubt this has seen a lot
of ‘eyeballs’, and this sort of application
‘sponsorship’ works in this instance; it’s fun and positive. Photo by Garret Keogh on Flickr. 60

Social and ‘This only works on an iPhone’
Apple categorises apps in the App Store so it’s easy to find things; but some applications defy categorisation apart
from one: they’re only possible due to the unique iPhone platform.
                                                                        Sonic Lighter by Smule61 is one such
                                                                        application. It’s a lighter, so launch it and a
                                                                        flame appears on your iPhone. Use it as a
                                                                        light, or to wave at pop concerts. Of course
                                                                        it doesn’t actually set fire to anything; but
                                                                        instead, it takes a leap firmly out of the
                                                                        realm of cheap gimmick and into the realm
                                                                        of perfectly executed global social

                                                                          When you do in fact light the lighter your
                                                                          flame glows on a global map and you can
                                                                          see where all the other flames are. Not only
                                                                          that but when you run your app in the
                                                                          vicinity of another Sonic Lighter user; you
                                                                          can light their flame.

In the US elections you could set your flame to either blue or red and then view Democratic and Republican
support around the globe. So how does one flame light another? The clue is in the title; Smule specialises in audio
related applications. Lighters ignite each other via sound from one iPhone to the other. Another of Smule’s apps is

60 http://www.flickr.com/photos/cheesesnaps/2735661470/

61 http://www.smule.com/

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(currently Number 1 in the App Store) Ocarina - a social musical instrument. Play a tune and let other Ocarina users
around the world enjoy your music.

Culture and Education
What’s mainly missing so far is a good selection of cultural and educational apps. It may be that various educational
institutions are creating their own great apps, but we haven’t seen much in the App Store to date. However we
have found two really good projects (and they’re local)!

                                              Tate Liverpool ran a Klimt exhibition recently and whilst many people
                                              talked about how great the show was, others talked about the tour
                                              guides. Tate used iPod Touches around the gallery to deliver rich
                                              media tour to visitors. The iPod Touch enabled audience members to
                                              play video and audio files and to learn more about the exhibition. This
                                              is a web app - not a native app, but it’s a great use of iPhone / iPod
                                              Touch in a cultural context. Tate (via Tate Media 62) is well known in the
                                              UK and further afield for its innovative use of emerging technologies -
                                              its highly respected podcast series is another example.

If you think you might end up stuck for an idea in a game of Charades this Christmas we’ve found the perfect app
for you. The app picks a charade so you don’t have think of one! It’s really quite brilliant, and made by North West
based company Shiny Development63 . We can visualise impromptu games of charades around the world!

                                                                Whilst neither of these apps are strictly educational
                                                                they hint at the potential of iPhone in the education
                                                                 sector. When we asked some colleagues working in
                                                                 the educational software industry for pointers to
                                                                  educational uses of iPhone the response wasn’t
                                                                  great - but more intelligent use of iPhone as an
                                                                   immersive, educational environment will come

62   http://www.apple.com/uk/pro/

63   http://www.shinydevelopment.com/

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Apps you can’t get yet
The SDK (Software Development Kit) enables developers to be imaginative and tie iPhone apps into other services
on the device or to web apps online. The possibilities however are not quite endless. The SDK does not allow for
certain things; and as such there are some applications that developers would love to be able to make and
distribute, but can’t. There is however a partial solution for some developers and that is to create ‘jailbreak apps’.

Early on in the iPhone story when iPhone was only available in the US for example, many people wanted to get their
hands on an iPhone and use it in their country on their existing mobile plan. It’s not as simple as just switching SIM
cards; instead it was necessary to ‘jailbreak’ your iPhone. Jailbreaking provided access to the inner workings of the
phone so that you could modify it. The second step would be to SIM Unlock it, enabling use it with an alternative
SIM. Importantly jailbreaking enabled resourceful hackers to develop and install third party apps before either the
SDK or the App Store were available.

An application called ‘Installer App’64 and the more recently launched ‘Cydia’65 enable users to browse and
download a whole range of free apps (and also customisations such as wallpapers) which are not available on the
App Store. If you have an app that you can’t distribute on the App Store you can distribute it via such services but
only to users who have ‘jailbroken’ their phones.

There are various reasons why you may create an app that only works on jailbroken66 iPhones. Qik67 is one
example. iPhone doesn’t record video but the Qik app lets you record video and then also broadcast it online. It
turns your iPhone into a videophone. Lifehacker68 offers suggestions for other apps that are ‘worth jailbreaking for’.

There are various reasons why we don’t recommend jailbreaking your iPhone such as it may not work after you do.
It’s up to you but we’re not recommending our readers jailbreak.

64 http://iphone.nullriver.com/beta/

65 http://www.appleiphoneapps.com/2008/07/how-to-use-cydia-a-walkthrough/

66 http://www.ipodtouchhacks.com/ipod-touch/detailed-instructions-on-how-to-jailbreak-114/

67 http://qik.com/

68 http://lifehacker.com/394683/iphone-apps-worth-jailbreaking-for

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The App Store
The App Store is a platform through which independent developers can distribute and sell apps made for iPhone.
The environment provided by Apple is conducive to bringing audiences to apps: if you can make a desirable or
useful application, and make it well, you’ll no doubt find your audience on the App Store. The App Store however
is not a totally ‘open’ platform. Whilst ‘anyone’ can make an app and get it in the App Store, first you need to join
the iPhone Developer Programme69 , and then when you’ve made your app, it will need to be submitted to Apple for
inclusion in the App Store.

                                                                        Whilst there are no guarantees, most
                                                                        applications do succeed in getting into the
                                                                        store. In June 2008 at WWDC (Apple's
                                                                        Worldwide Developer Conference) in San
                                                                        Francisco, the App Store was announced,
                                                                        and the crowd was elated. Finally, a way for
                                                                        thousands of Mac geeks to be part of
                                                                        iPhone history; and to make money from
                                                                        the iPhone platform.

                                                                        Developers get 70% of revenue from their
                                                                        applications. Apple takes 30%. 70% is more
                                                                        than you’ll get elsewhere; traditionally
                                                                        mobile download portals such as Handango
                                                                        have taken more than that (currently 40% +
                                                                        taxes). But in the world of ‘open mobile’
developers are distributing apps for free on the Android Marketplace. Whilst Google apparently has plans to enable
developers to charge for Android apps 70, it’s not there yet. The iPhone versus Android debate is set to heat up as
more developers take to both platforms and as the first Android phones emerge time will tell if the open=free
approach actually does appeal to developers. iPhone developers will want to stay with Apple for their 70%. As we
discussed previously rewarding developers is the key to creating an environment rich in great apps; and happy loyal

iPhone developers also benefit from the user experience the App Store offers to consumers. Apple has done a lot
of work in ensuring their ‘smart consumers’ understand that iPhone is about apps; that it’s always changing and
that there’ll always be something fresh to buy from the App Store. This is where the iPhone platform leads as it
offers developers a clear path to customers. Once an app is in the store, much of the work is done for you. Apple
provides an environment in which, if your app is good, it will get noticed. Customer reviews and ratings enable
applications to compete against each other. Even if you have a niche application, chances are you’ll find your
longtail audience on the App Store.

69 http://developer.apple.com/webapps/

70 http://www.readwriteweb.com/archives/handango_to_offer_paid_apps_for_android.php

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So Apple’s model is to provide a platform, to control quality, and to reward developers with a higher percentage
revenue share. And importantly, and uniquely right now, to put apps in front of a customer base.

The iPhone App Store platform is attracting more than just the original ‘Mac Geeks’; as many technologists;
developers and entrepreneurs can see this opportunity. Many are seeing iPhone as a cash cow in terms of creating
money making apps, or in offering application development services to third parties. As each “Sonic Lighter”, “Tap
Tap Revenge”, or “Evernote” hits the headlines, the army of iPhone Developers grows.

Not everyone however is 100% happy with the App Store. Commentators pointed out the ‘unopenness’ of the
platform; Apple is indeed firmly in control of what most people get to do with their iPhones. Whilst some favor the
democracy of a totally open platform where anyone can distribute anything, controls offer benefits too. By ensuring
developers join a programme, Apple can help developers get the tools they need to create really good applications;
of course Apple wants developers to create the best apps possible ensuring a good user experience; and they’re
not going to subject iPhone customers to substandard applications. What makes a good app, and what type of
app should be ‘allowed’ is the subject of much debate.

In the headlines recently are the stories of apps
that disappear from the App Store71 . Whilst some
commentators and bloggers berate Apple for this;
the truth is that only a handful of apps didn’t make
it or disappeared, and it’s fair to say there are
reasons why. Perhaps the most commentated
App Store gripe is the review process. The criteria
for acceptance is not well documented and you
don’t get much interim feedback; just a yes or a

There have also been some disputes; perhaps the
most famous relates to one of our favorites ‘iPint’.

As mentioned the iPint game is both a game and a gimmick - the best bit being the gimmicky ‘drinking a pint’ after
you’ve played the core ‘game’. “Steve Sheraton, the maker of the iBeer application, is suing Molson Coors (the
makers of Carling) for $12.5 million (£6 million) in damages after claiming the company had copied his idea of a
'virtual pint' and used it to advertise Carling” the Telegraph72 reports. Regardless of whether you feel one beer
drinking app can lay a claim to another which uses the same concept, it’s the accelerometer that enables such a
feature; and it would be a shame to limit all developers in future from making use of the features of iPhone for fear
of a lawsuit. Besides which the iPhone as a drink concept is something we’ve seen before on Marco Tempest’s
“iPhone Magic” Video on YouTube73 which was back in June 2007. It’s coffee and not beer, but still!

71 http://apple20.blogs.fortune.cnn.com/2008/08/09/iphone-trouble-in-the-app-store/

72 http://www.telegraph.co.uk/connected/main.jhtml?xml=/connected/2008/10/16/dlibeer116.xml

73 iPhone Magic Video http://uk.youtube.com/watch?v=lcB8CKa73B0

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The App Store is doing very well with 20,000 applications and over 2.2 million downloads daily. But who’s making
the money? Om Malik suggests in his article “iPhone App Downloads Are Up. What About Their  Usage?”74 that
while there are plenty of downloads, people may download and try out lots of apps, but that usage ‘may not be’ as
high as developers would like. And this is probably true in any similar circumstance; you may have plenty of
software on your computer, but use a handful of core apps most of the time. This represents a challenge to
developers to create ‘best in class’ apps which will see heavy use. If use is low, then this could be a symptom of so
much choice; you’ve just downloaded 20 apps and you may not have time to use them all yet. Consumers may
download many of the free or very low cost apps because they’re free or cheap, trying out many, settling for a
handful of favorites. This means that apps have to be really good to be very well used. Which, surely, is what you’d

So who’s making the money? In an interview with The Wall Street Journal Steve Jobs is quoted as saying the
developers “took home $21 million in the first month, of which $9 million went to the top 10 developers” 75 (Via Giga
Om). One of the biggest selling apps in the App Store is Sega Corp’s $9.99 Super Monkey Ball game, which sold
more than 300,000 copies in 20 days. “Steve Demeter developed the iPhone puzzle game Trism as a side project,
but now he's quitting his day job. Why? Because he says he's generated $250,000 in profits since he started
selling the $4.99 game” reports Alley Insider76. So it is possible for independent developers; and not just the likes of
Sega, to make money from the App Store.

It seems it’s possible to make money even if your app is rejected by Apple: “Give Alex Sokirynsky credit for
courage: After Apple rejected his "Podcaster" app from the iPhone App Store -- for supposedly duplicating an
iTunes feature -- he decided to sell the app anyway using Apple's (AAPL) "ad-hoc" distribution method. And he's
reportedly made a nice wad of money doing so -- perhaps $10,000 or more.” reports SIlicon Alley Insider77 .

Pricing is an art in any market place; let alone a brand new one; and many developers decided that the way to
make money was by selling low priced apps at high volume. The App Store launched with the truly brilliant Super
Monkey Ball at $9.99; which didn’t give developers of ‘more humble’ apps a whole lot of room to manoeuvre. In a
quest to get on the Top 25 list developers have priced many apps at 99 cents (59p in the UK Store) in the hope that
they make some money but the price point seems like it’s nearly free. So they’re going after volume, but need large
volumes to make this price point worthwhile.

Andy Finnel has written an excellent article on App Store pricing on his ‘Safe from the losing fight’ blog78. Andy
gives a compelling argument for bucking the trend in underpricing and encourages developers to price realistically.
We’ll give Andy’s advice more thought as we price our own ‘Coffee Buzz’ app. (See “The Making of Coffee Buzz”

74 http://gigaom.com/2008/08/10/iphone-app-downloads-are-up-what-about-their-usage/

75 http://online.wsj.com/article/SB121842341491928977.html

76 http://www.alleyinsider.com...

77 http://www.alleyinsider.com/2008/9/rejected-by-apple-sell-your-iphone-app-yourself-profit-aapl-

78 http://www.losingfight.com/blog/2008/11/15/how-to-price-your-iphone-app-out-of-existence/

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What it takes to reach #1
Update: 14.01.09

The ‘best selling iPhone app’ so far (currently number 1 in the Entertainment category) has announced its sales
figures, and it’s worthy of an update in this report. At the end of December, InfoMedia Inc announced sales figures
for its popular app iFart Mobile. (And yes you read that right, for those non App Store aficionados, it’s true, the top
                                        selling app so far is a novelty practical joke app with dubiously bad taste.)
                                        iFart Mobile79 was initially held in review by Apple and therefore not allowed
                                        to go live in the App Store whilst much discussion80 was had about what
                                        type of apps should be allowed. Eventually the app went live and beat Sim
                                        City 81 to the top spot.

                                         “iFart is a Digital Sound Machine and entertainment system which brings
                                         endless laughs and enjoyment to its users. However, iFart is much more
                                         than just a sound machine. iFart has more utility, usefulness and functionality
                                         than many other iPhone apps out there.”

                                          Whilst this isn’t our favourite app, it hints at a market for fun entertaining and
                                          light hearted apps. It also shows how timing and marketing helps and app to
                                          sell. The team at InfoMedia is somewhat of a marketing dream team anyway
                                          - and the app benefitted from the notoriety of being ‘banned’. Great
                                          marketing tips for iPhone app Joel Comm’s blog: http://www.joelcomm.com
                                          Here’s their published figures 82 on apps sold daily - and where that took
                                        them in the entertainment category:

12/12 - 75 units - #70 entertainment
12/13 - 296 units - #16 entertainment
12/14 - 841 units - #76 overall, #8 entertainment
12/15 - 1510 units - #39 overall, #5 entertainment
12/16 - 1797 units - #22 overall, #3 entertainment
12/17 - 2836 units - #15 overall, #3 entertainment
12/18 - 3086 units - #10 overall, #3 entertainment
12/19 - 3117 units - #9 overall, #2 entertainment
12/20 - 5497 units, - #4 overall, #2 entertainment
12/21 - 9760 units - #2 overall, #1 entertainment
12/22 - 13274 units - #1 overall

79   http://ifartmobile.com/



81   http://itunes.apple.com/WebObjects/MZStore.woa/wa/viewSoftware?id=300260420&mt=8

82   via http://www.joelcomm.com/updated_iphone_app_sales_the_f.html

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Developer Skills
So you want to be an iPhone Developer?

Firstly it is important to understand if you are considering a career developing apps for iPhone, or if you are
considering adding iPhone development to your company's portfolio of services; that iPhone development is not
web development. It requires a different skill set: in terms of programming, and also in terms of strategy and in
terms of user interface and interaction design. It is also not ‘just another mobile platform’ requiring similar mobile

iPhone is a platform which comes with a built in payment system, with location awareness, with multiple forms of
connectivity to personal, local and global networks; it has it all, which is what makes it appealing to technology
strategists all aiming to devise the next big thing. There are already many players in the race to create the
‘Facebook of iPhone apps’. Devising successful, impactful apps for the platform does require iPhone-specific
strategy; the concept of ‘porting’ apps from other platforms is not a recipe for success here. For an iPhone
strategist, an understanding of ‘mobile’ may come in handy; but understanding iPhone users and the interplay
between iPhone, the web, mobility, and social information architecture will be much more useful.

It’s not just strategists who will need to ‘think different’; designers too will need to be aware that what worked on
previous mobile devices, or what works online may not work here. iPhone brings a new set of possibilities to
mobile, to the mobile internet, to mobile utilities and applications and to mobile communications with friends, with
businesses and with our social networks. iPhone has its own application environment and it also has the Internet
as we know it - via a browser. But it also has a whole bunch of other technical features which facilitate an infinite
number of new services, games, applications and ideas. Designers who can think spatially, gesturally, and socially
will win out. Interaction design for iPhone can take many forms, and whilst the iPhone SDK comes with much
interface help, great iPhone designers will need to learn new skills for a new platform.

The iPhone platform means that like the web, this new breed of mobile developers now have no, or low barrier to
entry. Unlike the web however where you can develop web applications in a variety of programming languages, the
skills required for iPhone development are more specific; and arguably harder to come by. Developing an
application for iPhone requires skills in Objective-C programming; although other Mac development experience also
comes in handy.

Prior to iPhone, Objective-C and Cocoa programmers were relatively rare but Mac development was quietly getting
sexier, thanks in part to the rise of the popularity of the Mac, and due to hot independent software houses such as
Omni Group83, Panic84, Cultured Code85, and Sofa 86 creating wonderful apps for the Mac of a quality and finish
rarely experienced in the Windows environment.

83 http://www.omnigroup.com/

84 http://www.panic.com/

85 http://www.culturedcode.com/

86 http://www.madebysofa.com/

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Skills & Knowledge
Since the iPhone, those skills in Objective-C just became a whole lot more valuable. In fact, because Objective-C
and Mac programmers are not ten-a-penny, they can currently charge pretty much what they like for their sought
after skills. A recent article shows iPhone Developers demand is up87. A typical iPhone Developer ‘Situation Vacant’
advert might ask for the following skills:

        •   C / Objective-C (Objective-C preferred but not essential)
        •   Cocoa / Cocoa Touch Frameworks
        •   Object Oriented Programming
        •   MVC Software Development
        •   Xcode Development Tools
        •   Web Services Integration (JSON, XML, APIs)
        •   Familiarity with iPhone Human Interface Guidelines 88
        •   Paper Prototyping

In addition, the following skills may be useful in developing various types of iPhone apps:

        •   OpenGL ES 89
        •   Working with Accelerometers 90
        •   Audio Engineering
        •   Gestural Interaction Design91

As it is recognised that there are many developers who’d like to move to the iPhone platform, if you don’t have
iPhone SDK skills yet, the following is a list of skills which would set you in good stead to start learning.

        • OOP Programming experience (C++, Java, .net)
        • Games Development
        • MVC Web Application Framework Development (Ruby on Rails, Django)

In terms of native apps, 50% of the app is the front end; the interaction, and the visual delivery of that interaction.
Your development team needs to be strong in that as well as in programming. The design 50% could determine the
success of your app and it is unwise to underestimate that. If you only have one developer, then they need great
development and great design skills. Developers with a background in Mac development (Cocoa) and also web

87 http://www.mobileorchard.com/iphone-developer-job-demand-up-significantly/

88 http://developer.apple.com/documentation/UserExperience/Conceptual/AppleHIGuidelines/

89 http://www.khronos.org/opengles/

90 http://www.apple.com/iphone/features/accelerometer.html

91 http://www.interactivegestures.com

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developers used to working with both the front and back end would be more likely to have this combined
understanding. It’s fair to say that interaction is much more important on iPhone than on other platforms.

The iPhone Development Environment
This may seem like stating the obvious but having come across people who didn’t realise you need a few basic
things (like a Mac!) to develop for iPhone, this list needs including. A basic iPhone development setup includes:
          • A Mac;
          • The iPhone SDK (downloadable at http://developer.apple.com/iphone/); and
          • An iPhone or iPod Touch for testing.

There are a growing number of events worldwide to help developers develop and extend their skills to create great
iPhone apps. There are events created by Apple and events created by developer communities. The following is by
no means a conclusive list but gives an idea of the variety of events available:
        • WWDC Apple’s annual developer conference: http://developer.apple.com/wwdc/
        • iPhone Tech Talks: http://developer.apple.com/events/iphone/techtalks/
        • iPhone Dev Camps and Barcamps: https://barcamp.pbwiki.com/
        • iPhone Related Events via Upcoming: http://upcoming.yahoo.com/group/11811
        • UK Developer meetups such as NSManchester: http://www.nsmanchester.com/

A group has also been set up on Upcoming for iPhone Developers. All related events will be posted to the iPhone
Developer Group92.

Training (Face to Face)
The following organisations provide training courses in iPhone Development:
         • Pragmatic Studio: http://pragmaticstudio.com/iphone/
         • Big Nerd Ranch: http://www.bignerdranch.com/index.shtml
(Note that these are both USA based).

Online Learning
There’s a growing number of online resources for iPhone developers. Here are just a few of them:
        • Apple Developer Connection: http://developer.apple.com
        • Stanford University “iPhone Application Programming”: http://www.stanford.edu/class/cs193p
        • The Pragmatic Programmers: http://www.pragprog.com/titles/amiphd/iphone-sdk-development
A good starting point for guidance on developing iPhone Web Apps is developer.apple.com/webapps/.

92 http://upcoming.yahoo.com/group/11811

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There is also a growing number of books on iPhone development. The Apple iPhone SDK, whilst available to use
and download was under a NDA (Non Disclosure Agreement) until recently. This meant that few were able to
publish books about the SDK and iPhone development. The lifting of the NDA will mean more guidance books will
no doubt be published soon. Here are some with which to get started:
        • O’Reilly: http://iphone.oreilly.com
        • Pragmatic: http://www.pragprog.com/titles/amiphd/iphone-sdk-development
        • Amazon: iPhone Development Books

News and Commentary
As more and more developers gain experience with iPhone SDK development, you’ll find helpful community
guidance and news in the following places:
       • Discussion Forums at iPhone Development Central: http://www.iphonedevcentral.org
       • News and commentary at Mobile Orchard: http://www.mobileorchard.com
       • Tips and Tricks for iPhone SDK Developers: http://iphoneincubator.com/blog

As we have researched this project we have been collecting bookmarks They’re available in a public group on our
favourite social bookmark service ma.gnolia. http://ma.gnolia.com/groups/AmazingiPhone

If you have a suggestion for a provider in any of the above categories and would like to see it included in any
subsequent versions of this report, email Katie Lips katie@kisky.co.uk with the information.

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Hot iPhone Developers
One of the best ways to learn about what makes a great app is of course to try them out and to research the
community of developers; and who’s making what. The following is a list of developers who’ve made interesting
iPhone apps. All of these companies are doing totally new stuff; developing iPhone apps that truly make the most
of the iPhone platform.

       Company                    Location                        Apps                            Website

         Smule                Menlo Park, CA                                                http://www.smule.com
                                                          Sonic Lighter App
                                                          Tap Tap Revenge
         Taulous             Palo Alto, CA, USA                Twinkle                 http://www.tapulous.com/
                            Reston, Virginia, USA            Touch Tennis               http://www.flipside5.com/
                                                            Touch Hockey
       Wooji Juice              London, UK                   Stage Hand

      LateNiteSoft                                               Sketches             http://www.sketchesapp.com/

                                                        Darkside, Flickr Export
    Connected Flow                                                                     http://connectedflow.com/
                                                             for Aperture
   Shiny Development                 UK                       Charades                http://shinydevelopment.com/
                                                            Coffee Buzz
       Appostles                   Europe                      Moods                   http://www.appostles.com
                                                        Crash the Inauguration
 Raven Zachary and Co          Portland, USA             Obama for America                    http://raven.me/

The companies mentioned above are creating best in class apps; they may not make apps for other people, but are
a good starting point if you want to learn how to make ‘hot iPhone apps’.

Software Development Houses
There is a growing number of software development companies beginning to offer ‘iPhone development’ as a
service. These are not mentioned individually as it’s hard at this stage to determine the quality of these services.
One thing to watch out for if you want to get a company to make your app for you is that they need iPhone specific
skills: imagine you’re trying to find an experienced and excellent web developer, usability expert, and HCI designer
in 1995 and you may get somewhere close to understanding that these skills are rare right now. If you find
someone offering to make an iPhone app for you, you’ll be able to tell if they’re any good by the quality of the
previous apps they’ve made.

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Marketing and Monetization
As you’d expect there are a range of companies offering services aiming to help developers and app owners to sell
their apps and to monetize their apps through advertising.

Pinch Media
Pinch Media offers advertising and importantly analytics services for iPhone apps helping you to track usage of your
app. It definitely offers useful tools to developers; and is one to watch in the iPhone business.

AdMob has been an expert in mobile ads for several years, so its no surprise that they have been quick to create
an iPhone advertising platform. “AdMob ads are designed specifically for the iPhone environment to promote
engagement and performance.” http://www.admob.com/

Medialets focusses on ‘creative ads for native mobile apps’. Their ad service is for iPhone and Android App. They
“work with world-class advertisers who are excited in experimenting with the traditional model of mobile
advertising.” http://www.medialets.com/

Purple Talk
Purple Talk’s ‘AdShare program’ claims to be “the most cost effective way to promote your iPhone Apps.”

UK based Chillingo has a unique, perhaps somewhat surprising but so far successful approach to selling their own
and their partners’ iPhone apps. The company has several apps in the App Store that are doing really well and it
offers a partnership programme to other developers. Their background in mobile games and content means their
approach is simple, they sell iPhone apps via print publications (iPhone related magazines for example) for a profit
share of your app. http://www.chillingo.com/

There are more and we will update this page as and when we’ve tested them out on some of our apps!

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The iPhone ‘Opportunity’
iPhone is a platform encompassing the iPhone and iPod Touch devices, and the App Store; facilitating an
ecosystem that hooks together consumers with applications with developers. The device - consumer - developer
triangle is supported by Apple at every level; and each party relies on and supports the others. This perfect
equilibrium at the platform level is what is allowing the iPhone platform to grow exponentially; surpassing consumer,
developer and market expectations. The iPhone is as desirable today as it was when first launched and the ever
increasing range of applications means consumers’ iPhones can potentially get even better by the day. The
platform is doing well; growing rapidly and creating many exciting success stories yet it is important to recognise it
is still in its infancy. Exactly how big it grows is yet to be seen. What is certain is that Apple takes this opportunity
very seriously and aims for iPhone to be the next big (integrated hardware and software) platform; following Mac
and Windows. iPhone is certainly not just a sleek new mobile phone, and the iPhone platform is not just about
mobile content (and certainly not in a ‘traditional’ way). The iPhone platform has already redefined the scope and
significance of mobile data and is having enormous impact on the mobile industry worldwide.

iPhone (and importantly iPod Touch) devices also demonstrate a new way of thinking about personal computing.
The reduction in price (of iPhone 3G compared to previous models) and launch of the device in over 70 countries
demonstrate a desire to reach a mass market; potentially even in developing countries where it is not a personal
computer that delivers Internet connectivity but a portable device; an iPhone.

For anyone considering whether to explore iPhone; either in terms of developing for iPhone as a new business
strategy, or as a platform for engaging with consumers for an existing business, it is important to remember that
this is still very new. Whist it comes after years of an unimaginitive mobile industry, iPhone may indeed prove to be a
new platform in its own right and not ‘just’ an extension, or breath of fresh to the existing mobile platform. It is
important to note that Apple’s intention for iPhone is indeed to create a new platform with a new market; and not to
just take a share of an existing mobile platform or industry.

For a platform that is so new, it is doing well; with over 13 million iPhones sold in a short space of time, iPhone 3G
now looks set to really take off. The next Apple sales figures will be published in January 2009; and if last quarter’s
results are anything to go by then the iPhone platform, through the iPhone 3G, and through the App Store, will be
further recognised as a true success.

There are many opportunities for harnessing this opportunity; as discussed throughout this document. The iPhone
platform is courting and attracting diverse groups of entrepreneurs including:

        • Games companies - either making games just for iPhone, or who have relevant and high quality games
          (that can be delivered on iPhone (e.g. Tapulous, PopCap)
        • Brands - who can create true value add applications and get their brands into the pockets of millions
          (e.g. Audi, Carling)
        • Content and data owners - including public sector organisations / government who can monetise and
          enhance data with community influence (e.g. Urban Spoon, Good Guide, Cams Ahoy, Tube (London))
        • Charities and Causes - who can leverage the power of crowds through mobile social interaction (e.g.

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        • Web businesses - who can go mobile for the first time on iPhone, enhancing the customer experience
          and rapidly growing their user base by tapping into the platform full of smart consumers’ (e.g. Evernote,
        • “Independent Creatives” - developers and designers who think differently about the concepts for applica-
          tions that people will love on their iPhones (e.g. Smule)
        • Development experts - who can deliver iPhone strategy, design and development services to clients
        • Experienced software developers looking for a new challenge - who can maximise their expert level C++

Whatever your perspective the opportunities are endless, and while it’s still in its infancy it’s certainly possible to
exercise an ‘early mover advantage’ and make your mark.

To accompany this report we have been developing an application called Coffee Buzz; a new social tool for sharing
and finding great coffee experiences. This application has been developed to demonstrate some of the
development process and design and strategy decisions in iPhone application development. We have created a
Case Study “The Making of Coffee Buzz” which offers an insight into the development process, pitfalls and how to
avoid them, and tips for making a great iPhone app.

“The Making of Coffee Buzz” can be seen as “Part 2” of this report. You can also find out more about Coffee Buzz
at www.coffeebuzzapp.com.

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This report was written by Kisky Netmedia Limited and was commissioned by ICDC. Liverpool John Moores
University’s International Centre for Digital Content (ICDC) is a centre of excellence for the research and commercial
exploitation of digital content. ICDC is supported by both the European Regional Development Fund under
Objective One for Merseyside, as well as the North West Development Agency. For further information, visit:

Kisky Netmedia is a Social Media and Social Mobile specialist and delivers consultancy and development services
for leading UK businesses and public sector organisations. Kisky has a heritage of developing award winning web
and mobile applications and comes to this project with deep experience in emerging technology research and
innovation. For more information visit: www.kisky.co.uk.

                       This work is licensed under a
                       Creative Commons Attribution-Noncommercial License (US/v3.0).

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