[FoRK] $100M for iPhone Developers

Luis Villa <luis at tieguy.org> on Fri Mar 7 07:57:33 PST 2008

On Fri, Mar 7, 2008 at 10:32 AM, Jeff Bone <jbone at place.org> wrote:
>
>  On Mar 7, 2008, at 6:23 AM, Luis Villa wrote:
>
>  > I agree that it is a vastly superior device but I guess I don't see it
>  > as so superior that there is a multi-million dollar business hidden in
>  > there.
>  >
>  > Or to put it another way- are there even any KPCB-sized companies
>  > whose software is OSX-only, much less iPhone only?
>
>  I'm not sure it's a valid comparison;  OSX is definitely the second
>  (or third, if you count desktop Linux) platform in the end-user
>  computer space.  OTOH, the KPCB bet seems predicated on the idea that
>  the iPhone is a qualitatively new platform, fundamentally different
>  from the devices that came before it.  Whether or not you think the
>  new fund is a good idea is probably directly related to whether and to
>  what degree you buy that hypothesis.

Fair. I guess I don't see it as qualitatively new, or maybe more
precisely the only thing I see as qualitatively new is the
web-browsing experience, and that qualitative lead won't last, since
it is based on delivery of standards-based content.

>
>  >> The whole distribution thing (App Store) is huge.
>  >
>  > Why? No other platform has decided that's a good thing.
>
>  Two responses:
>
>  (1) The fact that nobody's done something before doesn't mean it's not
>  worth doing.

Sure. But most of the benefits you list below (consistency, ease of
use, etc.) have been obvious for as long as there have been fat pipes
to the home. In fact, Apple's been doing something similar with their
download center for about as long as they've been doing OSX. But (1)
that hasn't created a VC-worthy Apple-only software community and (2)
it doesn't lock out third-party stores, which this one does.

>  (2)  In fact, I'd say that in essence it *has* been done before, just
>  slightly differently.  I recall back in the day when we were doing
>  Ding! learning a surprising and disheartening fact about PC users:
>  something like 85%+ of PC users never installed an application (not
>  counting games, content CDs, AOL and so on) on their PC --- they just
>  used what came bundled.  Getting into vendor bundles was THE means of
>  getting third-party apps "out there" --- in effect, the vendor bundles
>  were a kind of "store."
>
>  That observation of market behavior helped spur a mass exodus in the
>  software apps business from desktop software to Web software.
>
>  I'm not sure to what degree this holds anymore, users are somewhat
>  savvy than they were at that point 10-odd years ago.  But nonetheless,
>  it's worth pointing out that it's error-prone to try to extrapolate
>  from our experiences as geeks to the behaviors of the mass market of
>  non-geeks.  In this case, users have become used to using e.g. the
>  iTunes Store, and that presumably low-friction experience could
>  translate nicely to software purchasing.
>
>  In any case I think it's safe to say that *without* this sort of thing
>  you're *never* going to see a mass market for native apps on this
>  device.  Even with the momentum that it's got I wouldn't expect to see
>  a mass market retail presence for this stuff --- buying software off-
>  the-shelf in some brick-and-mortar outlet is going the way of the
>  dodo.  And buying and downloading and installing onesies from
>  individual developers' web sites lacks some of the advantages of
>  centralization and consistency of user experience that a consolidated
>  "online" market for apps would have.

(1) I don't think having a store is a bad thing; most of the things
you say above are true, and well-implemented, could certainly be a
boon for developers.

(2) making the store *exclusive* and taxing every sale by 30% is
almost certainly a bad thing for incentive and innovation; my guess is
that it is such a bad thing that it will  I believe in other contexts
we'd call this a command and control economy, and we know that in the
long run those don't work very well. But hey, they're consistent,
UI-wise: http://images.google.com/images?q=russian+propaganda+posters

More generally, there is no VC-level market for consumer software
anymore outside games and Office, is there? Not sure how Apple and
KPCB changes the fundamental 'people don't want to pay very much for
software' dynamic.

I'm not saying that this is going to be a failure for Apple- it'll be
a great lockin play for them, since everyone will have one or two apps
that they can't live without and hence will never go back to another
phone platform. They've learned that much from Microsoft :) But there
is a huge gap between 'it creates enough value that Apple wins' (which
I agree is very likely) and 'it creates enough value that KPCB's
investors win' (which I think is unlikely.)

Luis

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