The release of the iPhone 3G in July 2008 changed the telecommunications industry forever, and instantly made the device one of the hottest products on the planet.
But it wasn't just the iPhone's cool looks and functionality that drew customers. Where Apple really struck gold was with the App Store, a site where iPhone and iPod users could download applications, games and novelty programs.
The App Store has led to the creation of an entire industry. Across the world, software developers began working on their own applications to sell through the App Store, with application developers splitting revenue with Apple 70/30 (in the developers' favour). The App Store launched with about 500 applications available, but at the time of writing there were 25,000 applications available with over 800 million downloads recorded.
In Australia, a small group of independent developers have been able to cash in on the iPhone craze by developing their own applications and selling them around the world. The eclectic bunch includes full-time software developers, IT workers tinkering in their bedroom, and some of Australia's biggest games development houses.
The application craze has also now spread beyond Apple, with BlackBerry, Windows Mobile, Google and Nokia all launching their own application stores to cash in on the trend. But Australia's leading application developers say the market has become flooded with cheap and useless applications, and warn that the business model of the application market will need to change.
Success stories
You will find all sorts of applications in the App Store, from
the useful to the absurd. While applications delivering news,
weather and stocks information are popular, the most downloaded
applications are games and novelty programs, such as those that
turn the device into an etch-a-sketch or a fake glass of beer.
In fact, research released recently by analysis firm Pinch Media showed most applications are quickly abandoned by users, with less than 5 per cent of buyers still using an app 30 days after they download it. But just because applications are disposable doesn't mean they are not lucrative. Self-employed application developers with little more than some spare time have been able to create programs that have earned them a relatively impressive amount of cash.
There was talk of money to be made, and I already did some stuff at home and thought I could try it
iPhone developer Travis Yates
In the US, developer Steve Demeter created geometry-based game Trism in his spare time and managed to earn US$250,000 in profit from sales of the app, which cost just US$3 per download. He has estimated that the top iPhone developers are earning US$5000 to US$10,000 a day.
Australian developer Graham Dawson of OzPDA developed the OzWeather application that allows users to customise Bureau of Meteorology data to their local area. The app has reached the number one spot in the Australian App Store, and has consistently remained in the top 10 since its release last year. Dawson says his OzWeather application has recorded 34,638 downloads as of 7 April, and at a price of AU$2.49 per download that has provided him with an income of AU$60,374 so far this year, for that app alone.
Cairns-based developer Travis Yates experienced first-hand the type of publicity a popular application can bring after his card-counting application was featured on CNN and even banned by the Nevada Gaming Control Board. "I already worked from home, I'm into different internet marketing companies and I'd done a bit of programming before," he says. "I hadn't done any Apple programming before, and I figured I could learn it quite easily."
Yates says that his AU$6 card-counting app recorded 1650 downloads on its best day, netting him AU$10,000, of which he would have received about AU$7000. "There was talk of money to be made, and I already did some stuff at home and thought I could try it," Yates says. "That was the main reason I started."
Keith Ahern, chief executive of development studio MoGeneration, designed applications for News Limited before entering the industry for himself. "Basically I liked working with the iPhone so much that I left and formed MoGeneration and picked my own team with some contractors," he says.
MoGeneration has created applications across a range of genres, but its most popular is a game designed for children called "MooShake". The AU$1.19 app reached the number two spot for kids' games on the Australian App Store, and managed to reach number four on the US charts.
God i hope the iPhone dose not become like Facebook. Full of useless childish crap apps. Apple should vet what gets released on the Apps Store.