[FoRK] $100M for iPhone Developers
<jbone at place.org> on
Fri Mar 7 08:28:35 PST 2008
On Mar 7, 2008, at 9:57 AM, Luis Villa wrote:
> (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
Nb, the model here is much more like the game console model, where the
vendor exercises significant editorial control over the platform, than
it is like the PC model. And I'm not sure that's entirely a bad thing
for a mass market; I would say the market for low-cost (and free)
software on Windows has suffered from a very high noise-to-signal ratio.
I also don't think this is going to be the exclusive channel. In the
last release of the iPhone OS, Apple *did not* completely re-break
known jailbreak hooks. At some point it's going to be clear that this
isn't an arms race they can win indefinitely. At that point, the mom-
and-pop ISV has a decision to make: do you avoid the App Store
channel and rely on a high level of geekiness in your (inherently
greatly reduced) target user base to have (a) jailbroken (?) their
phone, (b) found you on the Internets, (c) downloaded and installed
your software, and (d) paid for it, or do you just pay the tax and do
the deal via the approved Apple channel?
If I'm making software for money, I'm going to go the App Store
route. It has higher expected returns.
The key thing here is that even small payments add up quickly in a
mass market. It's conceivable that the iPhone installed base could
quickly get into the 100s of millions of units. Even low-cost apps
quickly get to mean big money with any reasonable market penetration.
And a 30% vig to Apple is more than worth it w/ them handling the
channel, payments, etc.
FWIW, back when we were attempting to do deals with the Magic Cap
hardware vendors (Sony, Motorola, Phillips, and Panasonic for
starters) it was common for them to want a piece of the action. Our
software had a recurring revenue piece, and they actually wanted *us*
to pay *them* for access to (i.e., bundling the basic apps on) the
device, and they wanted a piece of that recurring revenue. Point
being, this sort of thing isn't uncommon in the consumer device space
--- the economics are completely different from what you see in the
general computer market --- and this isn't at all the surprising /
appalling thing that some folks are making it out to be.
More information about the FoRK