The WWDC 2008 Keynote hat a number of good messages for iPhone developers. Among others: Developing for the iPhone is easy and it is a more pleasant experience than on any other mobile platform. Attendees were given an iPhone Developer Parade to prove this. A couple of observations are noteworthy, however.

The 10 or so developers fell into four categories:

• Games developers who ported their games to the iPhone (Sega, Pangea, Digital Legends)


• Web 2.0 guys who made an iPhone client for their services (loopt, Ebay, TypePad, AP, MLB.com)


• Vertical solutions providers who tend to a special interest market (Modality, MIMvista)


• The guy who does something fun in his spare time (Cow Music)

We did not see one "commercial" innovative app unique to the iPhone. Let's look at the economics at work here to understand why:

All of the developers stated that they had spent (read: invisted and risked) very little effort to bring the products to the iPhone.

The games developers already had almost all of the code and content for their apps developed and already made money on them on other platforms. Their investment for coming to the iPhone was to simply port a small fraction of their code, the so-called games engine to the iPhone. This is a very low investment and risk with a potentially high return. Even at $9.95 per sold game, the deveoper is set to make a huge profit from the $7 they get from Apple, even if they sell only 10,000 copies.

The Web 2.0 guys also have a business that does not rely on the success of the iPhone. They even can afford to give away their iPhone apps, because they plan on getting their revenue from elsewhere. For them, the iPhone is just an additional vehicle to get customers to their services and nothing is lost should Apple decide that the app is not suitable for the App Store. Also a very low investment with potentially high returns.

The vertical solution providers did not state what their prices would be and I suspect that they will be well above the $9.95. But their customers will buy iPhones to run the vertical solution on them and not the other way round. Again, none of the developers really depends on the iPhone, they have plenty more solutions available for their target markets that run on other platforms. They probably put a little bit more investment at risk than the other developers but in relation to their other products still not that much. Their customers are also potentially companies who qualify for the Enterprise program and could circumvent the App Store by selling their solutions directly to the IT departments of these customers.

The last case is also very interesting: Band by MooCowMusic, the only app that was both innovative and unique to the iPhone, was done by a guy in his spare time as a hobby. Of course he will make a huge profit, because he has zero costs. All he risked was a couple of free weekends and evenings. Maybe that was a big risk to his relationship but in terms of money, he can only win.

As those examples testify, the iPhone is a great platform for your product as long as you do not risk too much. If you have an existing business model or application, it is a no brainer to bring it to the iPhone. If you are a student or develop in your spare time and can think of something cool, it might be worth it to try. If you tend to a vertical market and your customers could do something with the iPhone they couldn't do before, it might also be worth a little investment.

If, however, you plan for world domination and invest accordingly, you would be ill advised to base you business on the iPhone alone.