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Are new platforms such as the Apple iPhone or Google’s upcoming Android being overhyped? That’s for certain. But the “Bang or Bust” panelists at MobileBeat 2008 offered their own nuanced takes about where the opportunities are and how fast they will come as closed mobile platforms open up.
Users are already flocking to the iPhone in part because it has many more choices of software available for download compared to your typical cell phone or smart phone. Sam Altman, CEO of location service Loopt, said that iPhone owners use his service 47 times more than other mobile users. Those kinds of results are the norm for companies that develop applications for the iPhone and other phones, he said. (Data shows that as many as 31 million applications have been downloaded from the App Store in just the past month).
Rich Miner, general manager of the Google Android platform, said that what’s different now is that software developers who understand consumer experiences are flocking to the new platforms. That’s forcing more changes to accommodate them, such as more open access to applications.
J. H. Kah, senior vice president at South Korea’s SK Telecom, warned that the iPhone will give consumers just a taste of what they want in terms of accessing applications over 3G data services. But the demand will be so great that those consumers will quickly find that the bandwidth available to them is underwhelming.
“The iPhone 3G is a wake-up call for American carriers to upgrade their networks,” Kah said, noting that Asian carriers have provided much faster connectivity for a while. “People will demand more from their networks.”
The slowness of the networks could hold back progress. In the meantime, the iPhone 3G is here and is clearly the focus of new investment in applications because the phones are selling out.
Matt Murphy, head of Kleiner Perkins‘ $100 million iFund, said that his fund has invested in five iPhone application companies so far. That includes iControl, which brings home automation to the iPhone so you can use it to control the lights in your home. He noted that, even with its more closed approach, Apple has opened new opportunities for app developers who were previously stuck dealing with carriers to get their software up on the “deck” of a phone where users could use it. Now, it’s much easier to get an application up on Apple’s App Store. Since the debut of the store, more than 1,000 applications are now available. Over time, Murphy predicted new business models would emerge beyond charging a fee for App Store software. Those include virtual goods sales and affiliate sales programs, where those who promote transactions can get a cut of the transaction amount.
That, in turn, should whet the appetite for getting applications on a broader array of phones using the Google Android platform. Miner said that the project is on schedule with four major handset makers engaged in making Android phones now. Carriers are also at work on carrier-branded Android phones, he said. The first will hit in the second half of 2008 and many more will come next year. There is still a wait-and-see attitude on Android, though.
Asked if the Android software development kit was delayed, Miner said that his company did roll out new updated kits to a small number of higher-profile developers. But he said more members of the developer community would get their kits soon, allowing them to get started on development.
“Android is getting attention because of its openness them, but people want to see volume sales before they develop for it in droves,” Murphy said.
He said that developers have the choice of either making an application that can run on a couple of hundred phones or a feature-rich application that exploits the uniqueness of the most popular smart phone, the iPhone. Trying to do both may stretch resources too thin.
Erick Schonfeld, editor of TechCrunch, moderated the panel. He asked whether the open versus closed models would play out between Android and the iPhone, much the same way that Microsoft’s more-open approach won out against Apple’s closed approach in the computer wars. That’s the big question.
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