iPhone Apps Have to Pay Their Way

We Mac developers all love to program. We love to design, build and create cool stuff for you. We like to hear what you think and try to make you even happier next time. That's what being a Mac developer is all about and we do that partly because we love to. We also do it because it's good business sense and, at some point, Mac devs have to eat too. I mean, did you think that Wil Shipley's shirts come from Tesco?

So there's love and there's business. And now there's a new business in town: the business of making iPhone apps. Slightly lost in the brouhaha surrounding the SDK announcement was the fact that Apple has also, in effect, announced an iPod SDK due to the fact that the iPod touch runs OS X.

I'll repeat that, in case you're still not getting it: the most popular portable music device in the world, the one everyone has, the default choice, the cultural icon, the device which Apple sells millions of each quarter, the device which has previously been closed off to all but Capcom PopCap, EA and Nike now has an SDK.

Granted, not every iPod sold is an iPod touch and the installed base of OS X capable devices is still less than two million worldwide. I'm willing to speculate, though, that the OS X platform is the future of every iPod with a screen. They renamed the traditional iPod "classic" and the word "classic" has connotations in the Apple lexicon. You know what I'm talking about here.

How long before there are as many iPods in the installed base as there are Macs? Last quarter, Apple sold 1.76 million Macs and 9.8 million iPods. Nearly ten million iPods in three months. Again, not all OS X iPods but you see where this is going. As well as an exciting new technology to work with, the iPhone/iPod SDK is going to be a goldmine for Mac OS X developers.

There are several different business avenues we could go down with iPhone apps, but I can see a few straight away:

  • Standalone iPhone app with no equivalent desktop app.
  • iPhone version of your desktop app, sold as a separate product.
  • iPhone version sold in a bundle with the desktop app.
  • iPhone version bundled for free with the desktop app.

The only scenario I hope I don't see, except as a special offer, is the last one. Possibly the worst business decision we could make as Mac developers is to devalue iPhone applications to the same level as Dashboard widgets.

Unless Apple has a great technology story that we have no inkling of, it's clear that iPhone apps will take significant development efforts to make. This isn't just a recompile - at the very least, a new UI to your app will need to be designed, built and tested. That costs time both in developer learning and also in user support. There will have to be a business case for building iPhone apps, even iPhone satellite versions of existing desktop applications.

I would hope that Mac developers look at the iPhone as the truly new platform that it is, rather than as an adjunct to Mac OS X. Just because it has some elements of Cocoa doesn't mean it's Mac OS X Lite.

Now, I don't believe that iPhone apps will necessarily command the same prices as desktop applications. One of the interesting pieces of psychology I encountered when pricing FlickrExport was that people perceive less value in something that's "just a plugin" than something that's a "whole app" - never mind that FlickrExport is more featureful and more powerful than the Flickr Uploadr app. Perhaps iPhone apps will be perceived in a similar way, but I think we as developers can make a case for the iPhone and its apps to be regarded in their own right if we market correctly.

I'm not saying that no iPhone app should ever be free, and I'm not trying to start a cartel here, but lets take the time between now and February to think about how this new market opportunity fits into our business models.

[Update: Yeah, PopCap, not Capcom.]