July 9-10, 2013
San Francisco, CA

Early Bird Tickets on Sale

Apple has built a massive and fast-growing $16 billion annual revenue stream in digital content alone, Apple analyst Horace Dediu says.

The company announced that quarterly iTunes revenues topped $4 billion — including $2.4 billion in content alone — in its latest earnings report. Based on historical numbers alone, that’s a $16 billion annual run rate, thanks to Apple’s 500 million iTunes users. But since it also has grown at a fairly steady 29 percent per quarter for the past six years, it’s also an underestimate of the annual value of the iTunes ecosystem.

And it gets better as users have more Apple devices.

“Apple users spend about $1/day for each Apple device in use,” Dediu says.

Source: Horace Dediu

iTunes digital media revenue by product segment.

All of which means that Apple is still king of the mobile ecosystem, at least as far as monetization is concerned. Users have currently downloaded 49.9 billion apps, and Apple is currently running a contest which will see the downloader of the 50th billion app win $10,000 in iTunes cash. While Google Play is growing faster than Apple’s app store, Apple still leads in downloads, and it holds a 2.6-times revenue advantage.

It’s also an interesting metric for Amazon to evaluate itself by.

Amazon sells Kindle devices at or near cost in part because it hopes to make extra revenue on digital content — perhaps $3 per user per month – via its own app store and its digital media offerings, such as TV shows and movies. Its newly launched virtual currency Amazon Coins should help with that mission, and with 11 million to 12.5 million Kindles sold through Christmas 2012, and perhaps 15 million sold to date, that would translate into just over half a billion dollars in revenue.

And at Apple-like numbers of $40/user/year, it would be $600 million dollars.

All of which could help explain why Amazon is hitting digital media hard and buying technology to make all of its Kindles full-color, with responsive screens.

And why Apple, Amazon, and Google are increasingly hard-core competitors in their three-way battle to own your devices … and your wallet.

Image credit: 401(K) 2013/Flickr

July 9-10, 2013
San Francisco, CA

Early Bird Tickets on Sale

The cost of acquiring loyal users for iPhone and iPad apps shot up by almost a third last month as marketers started the big Christmas season push.

App marketing firm Fiksu tracks the cost of acquiring loyal users, which has ranged from a high of $1.54 in July to a low of $1.06 just in October. The big jump in November came just after four months of steadily decreasing costs.

“The big surge in costs that we saw were the kickoff to the holiday season, leading to a huge increase in marketing spending,” a Fiksu spokesperson told me this morning.

Source: Fiksu

Cost per loyal user index

Previously, app marketers had relied on Apple’s traditional holiday app submission freeze, which limits the number of new applications coming into the store, improving existing apps’ chances of visibility. This year, the spokesperson told me, marketers did not rely on the freeze as much, spending more freely to get up into the coveted top apps lists before the flood of new users.

This year, that flood was 17 million new devices activated on Christmas Day, and being in a top downloads store position will almost guarantee a surge of new organic users in addition to the ones you acquire via marketing.

Another reason for the increased costs? Updated app store marketing rules: ”Unlike last year, when incentivized networks were still part of the mobile app marketing mix, marketers faced the reality of needing to pay more to get more during the competitive 2012 pre-holiday season,” the Fiksu spokesperson said.

Fiksu also released its app store competitive index, which tracks downloads of the top 200 free iPhone apps. Downloads had topped 5.4 million in October — a seven-month high — as the iPhone 5 rollout reached its peak, then slipped 15 percent to 4.57 million in November.

Source: Fiksu

App store competitiveness index

photo credit: Photo Giddy via photopin cc

It’s the holiday season! But news never rests.

We’ve got Apple bracing for the holiday download rush, two companies shutting down, and big data machines that may one day think like brain. And if you’re expecting an iPhone in your stocking, you should read our story on open-source Instagram alternatives for your to download on one of the the biggest download days of the year — Christmas!

Instagram freaked users out this week when it changed its terms of service this week. How did you not already know that?

Need more distractions from your (very sweet, we’re sure) family? Check out the Editor’s Pick page.

Now, let’s get on to the stories you need to read:

Open-source alternatives to Instagram

After Instagram, the photo sharing app recently purchased by Facebook, made some concerning changes to its terms of service, VentureBeat reporter Jolie O’Dell checked out some alternatives. Open-source alternatives. Thankfully, Instagram wound up rolling back some of its privacy changes, but these app are still worth checking out.

U.S. visa system helps stifle early stage startup Taploid

Here’s the sad tale of how one startup went down. Taploid, a DEMO company that hoped to be the tabloid of the social world, is shut down after running out of money, hitting walls with U.S. immigration, and failing to get acquired. In the aftermath, the founders have some advice for entrepreneurs.

Apple kills a Kickstarter project: Portable power project POP refunding $139,170 to backers

Edison Junior, the technology and design lab behind the POP portable power station, is returning the full $139,170 in funding it received from Kickstarter backers to develop the device. Unfortunately, Apple has refused to give the project permission to license the Lightning charger in a device that includes multiple charging options. Check out Apple’s reaction here.

Palm founders are back with Grok, a neuroscience-inspired big data engine

Imagine a world where every machine — from the smart meter to the cell phone — is designed to mimic the human brain by getting smarter over time. A new “big-data” product called Grok promises to make those brainy machines a reality. It’s the first product from Numenta, which Palm cofounders Jeff Hawkins and Donna Dubinsky started in 2005.

Apple freezes the App Store in advance of the holiday app-downloading bonanza

Console video games see their peak sales from Black Friday through Christmas. But for mobile game and app buyers, the big season for app downloads begins tomorrow. Apple told developers today that its traditional holiday shutdown starts tomorrow, with a big impact on who comes out =on top for the holidays.

Top Santa image, Man with camera image, Apps image via Shutterstock; Taploid image via Meghan Kelly; Numenta image via Numenta; POP project image via POP

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July 9-10, 2013
San Francisco, CA

Early Bird Tickets on Sale

Surprising no one, Google Maps for the iPhone is insanely popular — to the tune of more than 10 million downloads in under two days, Google’s senior vice president of commerce Jeff Huber just announced.

In just a few hours after launching last week, Google Maps became the top free app on the iTunes store. The news surely rubs some salt into Apple’s wounds from its troubled map app, which was widely criticized for bugs and inaccurate data (at one point, it mistakenly led people into the middle of the Australian outback).

“Creating a mapping application from the ground up is actually quite challenging from a technical point,” said Daniel Graf, Google’s mobile map lead, in a lengthy interview with VentureBeat last week. “It’s not just rendering some pictures and text. Rendering a map is similar to creating a 3D game, where you have a 3D rendering engine, which we created. To have the performance you see now, where you can zoom and pan at this speed is quite a challenge.”

July 9-10, 2013
San Francisco, CA

Early Bird Tickets on Sale

You know the old story about statistics and liars, right? Statistics lie, and liars use statistics, or so the old saw says. There’s a good reason for that: Statistics are so damn easy to lie with.

Even when you don’t mean to.

Yesterday morning I posted on App Annie’s report that Apple’s app store revenues grew only 12.9 percent in 2012. And yesterday afternoon I posted — after Apple contacted me and disputed the story — that, actually, app store revenues had increased perhaps as much 200 percent in 2012.

Guess what: They’re both right. Bring out the gee-tars and let’s sing Kumbaya.

How can that be, you’re asking? Here’s the short version, based on a conversation with App Annie this morning, and reams of additional data the company sent me. Essentially, it boils down to the fact that Apple and App Annie are looking at the numbers from two different perspectives. Apple’s numbers are based on a historical perspective: growth from year to year to year. When you view the numbers that way, there’s significant and real buildup:

App Annie’s numbers — and specifically the 12.9 percent — were based on 2012 data only: growth of app store revenue from January to October. Very specifically, this is what App Annie was saying, and what CEO Bertrand Schmitt told me this morning:  “iOS’s October 2012 monthly revenues were 12.9% higher than their monthly revenues in January 2012.”

App Annie will be posting an update to its report shortly, which will more clearly specify exactly what the company was measuring and will include the following caveats:

According to a just-released study from London-based ABI Research, iPhone had only 29 percent of app downloads in the second quarter of 2012, compared to 47 percent for Android.

There are a number of factors behind this, of course. A big one is the fact that Android is significantly outselling iPhone, with 75 percent market share in the past quarter. Another, according to ABI, is that Apple recently cracked down on download bots that some developers had been using to manipulate their install numbers.

“The iPhone’s download share tends to see a lot of seasonal fluctuation, but over the past year or so it has stayed surprisingly resiliently between 30% and 37% of the total,” ABI analyst Aapo Markkanen said in a statement. “In our estimates the second quarter represented the first time the iPhone dipped below 30%. The iPhone 5 will most likely cause a second-half hike to the download count, but that may be of a rather temporary nature.”

But another factor, the analyst speculates, is the shift up the value chain to generally higher-priced tablet apps — a shift that Markkanen said is happening much faster for Apple than Google.

“We estimate in the first half of this year the iPad saw over five times more app downloads than all Android tablets combined.”

Apple’s iPads have seen wider commercial success than Android tablets, which have comparatively fewer apps optimized for the larger screens. Its newest iPads, including the mini, have sold over 3 million units just in the first weekend of availability.

That said, developers will definitely be taking note that half of the smartphone app economy (though not necessarily half of the cash in the app economy) is taking place on Android phones.

photo credit: April Julian Cakes via photopin cc

July 9-10, 2013
San Francisco, CA

Early Bird Tickets on Sale

Every day, 46 million mobile applications are downloaded from Apple’s App Store, according to Kleiner Perkins Caufield and Byers partner Mary Meeker.

Meeker spoke today about the ways Silicon Valley is changing almost everything we use in a staggering way the All Things Digital’s D 10 conference in Rancho Palos Verdes, Calif. Indeed, many of her slides included a picture of the way things used to be and the way Silicon Valley has changed it. For instance, one of Meeker’s slides showed a notepad for remembering things and making to do lists. On the other side of the slide was a picture of the Evernote application.

KPCB arrived at this conclusion after looking the App Store’s milestones. In October 2011, the company announced it had hit 18 billion downloads. Later, in March 2012, Apple announced 25 billion downloads.

Many of app developers say that it’s difficult to be found in the sea of billions of apps that live in the App Store. Crawling up to a “top 25″ spot on one of Apple’s app lists, is also difficult, and based on download numbers. Indeed, it seems this 46 million downloads a day is spread thinly amongst iOS apps, who celebrate hitting thousands of downloads, let alone millions.

But it also shows the major interest in smartphone applications. Smartphones are undoubtedly changing the way we communicate, the way we are entertained, the way we organize, the way we listen to music. Indeed, mobile usage itself is growing rapidly with 10 percent of Internet traffic coming from mobile. Monetizing apps is growing as well, but the revenue gained on the desktop still surpasses that of mobile.

Apps image via Shutterstock

After social mobile application Oink was shut down on Wednesday, the company behind the app, Milk, put up a “download your data” option so that users to grab their content one last time. It seemed, however, you could grab just about anyone’s content simply by typing in their user name.

However, Milk founder Kevin Rose has informed us that a unique hash has been added to each link to stop just anyone from accessing your content.

“For Oink it has always been that everything that a user does is public,” Rose told VentureBeat. “It’s posted to their profile pages; there’s no way to hide any of that data.”

Oink was an odd combination of Instagram, Yelp, and Foursquare, where people could take photos of their surroundings, add filters, rate what they’re doing, and check-in to various locations. It was obviously a little confused from the start, which may have led to its closing.

Pulse blogger Cristina Cordova was an Oink users, and when the announcement came out on Wednesday, she attempted to save her content. The Oink website asked her for her username or e-mail only, and then e-mailed a link to the data download.

The link (pictured right) is defined by a username, so if you input another person’s username, his data can be downloaded using the same link. Cordova swapped out her username for Oink founder Kevin Rose’s and it worked (you can check out his photos below). It seems the element of “security” here was the fact that a user only receives the download link if they have access to the associated e-mail account. But being able to manipulate the link itself is a vulnerability.

That being said, all of the information on Oink was intended for public consumption. Reviews, photos of places, public “check-ins” are open to the outside world. However, the oversight could be detrimental if used on the wrong application (imagine if Facebook had a bug like that).

“With Facebook it’s always tricky because there’s private and public data that’s inter-tangled,” Rose explained.

Rose was recently hired by Google. He confirmed the move today, stating that he and three others from Milk would be moving on to the search giant. What he will be working on has not been released.

July 9-10, 2013
San Francisco, CA

Early Bird Tickets on Sale

Apple‘s mobile products are getting a lot of love from China. The government-owned operator hit 15 million iPhone activations today despite the fact that it is unable to sell the phone legally.

China Mobile says its 3G service is incompatible with the phone’s hardware but hopes this will change after it tests the LGE network in June, according to The Next Web. It seems China Mobile users are jailbreaking their phones to run the operator’s service on the device. They are also having to downgrade to 2G, given the incompatibility. While some may think the move is drastic, T-Mobile users in the U.S. who have to jailbreak their phones to avoid switching carriers can surely relate.

According to a study by Gartner, despite the 1 billion iPhones expected to be sold in China by the end of 2012, Apple has dropped to fifth place in Chinese mobile market share. It was recently beaten out by ZTE. That hasn’t placated the cult-like following Apple has amassed around the world, earning it 25 billion downloaded mobile applications.

Chunli Fu in Qingdao, China downloaded Disney’s “Where’s My Water?” free app yesterday, marking the milestone. He received a $10,000 gift card for being lucky number 25 billion. The amount was amassed over three years since the launch of the iOS app store in 2008. Much of Apple’s bread and butter has come from its mobile devices, along with the App Store. The company sold 37.04 million iPhones and 15.43 million iPads in the first quarter of 2012 alone, which considerably contributed to its $13.06 billion net profit. According to Apple chief executive Tim Cook, China used to pull in a few hundred million dollars for the mobile arm of the company, but last year swelled to $13 billion.

Mac sales have risen 100 percent in China as well, according to Cook. The year-old Mac App Store has generated one hundred million downloads, separate from the much larger numbers produced by the iPhone and iPad. This falls in line with Tim Cook’s prediction that the iPad would far surpass the PC.

“Many of us thought at Apple [when the iPad was being introduced], that the tablet market would become larger than the PC market,” Cook said at the Goldman Sachs technology conference. “I feel that stronger today than I did then because I look out and see all these incredible uses for it.”

Cook goes on to say that the iPad has “cannibalized” Mac sales, with Mac apps only making up four percent of today’s milestone. Worth noting, however, is the fact that the iPhone only supports apps that are downloaded from the Apple marketplace. Mac personal computers, however, can download applications from all over the Internet and are not as reliant on the Mac store for content.

Google‘s Android App Marketplace, which also launched in 2008, currently boasts 11 billion downloaded apps.

hat tip The Next Web

VentureBeat is holding its second annual Mobile Summit this April 2-3 in Sausalito, Calif. The invitation-only event will debate the five key business and technology challenges facing the mobile industry today, and participants — 180 mobile executives, investors, and policymakers — will develop concrete, actionable solutions that will shape the future of the mobile industry. You can find out more at our Mobile Summit site.

Since Download.com released its installer in July, people have complained about the “special offers” portion. At the beginning, the installer took you through a couple of steps, including one that offered to install a toolbar or new homepage for advertising purposes. At that time, the customer could only click “next” if they wanted to complete the download (see screenshot right). Once done, the installer would change your homepage or launch a toolbar the next time you opened your Internet browser. Since users couldn’t opt-out, they found the process skeevy. CNET was effectively force feeding advertising to users.

The proprietary installer is only available on some software, and customers who don’t wish to use it can use the software’s download URL to bypass it. After taking some heat from its original design, CNET changed its installer to include a “decline” button on the special offers page. But Nmap founder, and self proclaimed hacker of the good kind, Gordon Lyon is still upset with the use of the installer on his software.

CNET explains the special offers in its FAQ section:

“Users will encounter a single offer during their download, which is clearly disclosed and provides the option to accept or decline it before proceeding with the download. We only show offers for software that is approved for listing on Download.com [and] has undergone additional screening to ensure compliance with the Download.com Software Policies.”

For Lyon, it’s not about the decline option, but more about the branding of his company’s name on the installer and the quick-clicking nature of people trying to get through the download cycle.

“The idea is they know people just click through installers,” Lyon explained in an interview with VentureBeat. “They’re trying to get as many people as possible to fall for this.”

How many times have you clicked the “okay” button to get off an interrupting screen and get back to what you were doing? Lyon doesn’t believe the “decline” button helps at all as it is off to the left side of the installer box, with the “accept” and “close” buttons off to the right (see screenshot below). He expects many will bypass decline button and then be annoyed to find the new content on their computer.

“Then the next time the user opens their browser, they find that their computer is hosed with crappy toolbars, Bing searches, Microsoft as their home page, and whatever other shenanigans the software performs!” Lyon wrote in a blog post. “The worst thing is that users will think we (Nmap Project) did this to them!”

Another of Lyon’s gripes is that the “Nmap” verbiage is used on each page of the CNET installer, leading consumers to think Nmap is in some way associated with the special offer company, in this case Microsoft Bing. He even goes so far as to call this “trademark violation” and asks for US copyright attorney suggestions at the end of his post.

Lyon also points out that after sending the installer to VirusTotal.com, security companies McAfee, Panda, F-Secure and seven others determine the executable, or code that tells a computer to perform a set of commands, is malware. Eight of these define it as a Trojan. Trojans, at their core, are meant to seem as if they’re performing one approved act, while in the background they steal information or install unwanted software.

“One of the main draws of the site was that they checked the software and made sure it was clean, and doesn’t install any of this crap on your machine,” said Lyon of Download.com’s popularity. “I consider it a trojan because it comes along for the ride with the software we created.”

Part of that popularity came from an Adware and Spyware zero-tolerance policy, which Download.com took on in 2005. The policy banned all bundled adware packages.

At this point, the installer is still a headache for businesses that don’t want to be associated with the special offers, although CNET has taken some steps to alleviate its own liability. Business that don’t want their software installed with CNET’s proprietary installer can request to opt-out, though CNET says it will review these requests on a case-by-case basis.

In general, the issue shows that proprietary installers can easily hide instructions to push content or software onto your computer without your knowledge. Make sure you always know what you’re clicking and don’t get trigger happy with the mouse.

We have reached out to CBS Interactive, CNET’s parent company for comment and will update upon hearing back.

[First screen shot via gHacks, second screen shot via Nmap]

Sept. 9 - 10, 2013
San Francisco, CA

Early Bird Tickets on Sale

Apple is looking for a way to merge multiple Apple IDs, since developers have found having multiple sign-ins cause problems on iOS 5 and iCloud, according to MacRumors.

Apple did not immediately respond to a request for official comment.

The issue of using multiple Apple IDs has been a minor annoyance in the past, with users needing to switch between them when performing updates and certain downloads. People who had an Apple ID and a MobileMe account, for example, would fall into that category. But now Apple has instituted a new policy with Automatic Downloads, which do not let you switch between logins and locks devices for 90 days to a single account.

Apple thus far has not provided a solution or even any suggestions for resolving the issue. The only official comment the company has provided is that Apple IDs can not be consolidated at this time. MacRumors said an Apple spokesperson told a customer with the issue to just use a single ID for all future purchases.

As someone who has multiple Apple IDs and toggles between them to download apps for the iPhone and iPad, this is a particularly troublesome issue for me. I’ve used two IDs for several years to help keep work and personal downloads separate, but now Apple will be mandating that I only use one, and I’ll lose the ability to update many of my apps. I’m certainly hoping Apple allows the merging of the two IDs before iOS 5 and iCloud are officially released.

July 9-10, 2013
San Francisco, CA

Early Bird Tickets on Sale

Apple’s App Store, the store in which iPod, iPhone, and iPad users buy and download applications, has surpassed 500,000 approved applications according to a combined estimate by Chomp, 148apps, and Chillingo.

Since its debut in 2008, a year after the company launched the first version of the iPhone, the store has witnessed considerable success amongst developers — paying out nearly $1.4 billion in revenue — and users, who have downloaded a total of more than 15 billion apps.

The three startups, whose businesses operate on the iOS ecosystem, have also put together a comprehensive infographic to surface some of the key statistics from the milestone. Most interestingly, the 500,000 apps were built by 85,569 unique developers, include around 185,000 free apps, and are priced on average at $3.64. Games are the most popular category of apps (15 percent), followed by books (14 percent), entertainment (11 percent), and education (8 percent.)

Among the most popular paid apps are Angry Birds, The Moron Test, Moto Chaser, and Flight Control. According to 148apps, buying every application on the store would require a 7.5 terabyte iPhone and $891,982.24.

In comparison to the App Store, the competing Android Market, responsible for Google’s Android, has an estimated 294,000 applications according to Fortune.

Apple has yet to confirm the milestone, but it will most probably do so at the upcoming Worldwide Developers Conference next month. CEO Steve Jobs is expected to discuss the future of the iOS platform at the event, as well as show off the next iteration of its operating system, OS X Lion.

Such a change would lead to more flexibility for users, since they’ll be able to download music they’ve already purchased on their iPhones or iPads without syncing with their computers. But it’s still no music streaming service — one that would allow consumers to listen to music streaming over the web, instead of downloading — which has been the main thrust of iTunes revamp rumors since Apple purchased streaming music company Lala in late 2009.

Bloomberg’s sources say Apple is negotiating the unlimited download deal with music companies including Sony Music Entertainment, Warner Music Group, EMI, and Vivendi Universal.

In addition to letting users access their music collections without synchronizing to their computers, the download deal would also serve as an unlimited backup for users’ music. Additionally, it could serve as a stepping stone to a future iTunes music streaming service. Apple would need a robust infrastructure to let users stream media without interruption, and offering unlimited downloads would be a first step towards providing that.

Photo via Cerebro Humano on Flickr