iPhone apps more popular than music downloads: 1 Billion downloaded in 9 months. What gives?

Image via Wikipedia

Based on what Wikipedia says I am estimating that iTunes has maybe sold a total of 6.8 Billion songs since April 28, 2003 - i.e. exactly 6 years ago. Now Apple just announced that over 1 Billion iPhone & iPod apps were downloaded around the world (a good list of the top 20 free & paid apps is at Ben Tao's blog), during the past 9 months, already. Why is that? Why is music apparently less popular than software gadgets?  Here is my 2 cents:

• The music on iTunes is always paid-for while apps are sometimes free and sometimes paid (and at different price points), and are therefore an easier sell. Try and buy is still the best way to get hooked - and iTunes does not even allow me to listen to the full track before I need to shell out my dollar! In any case, the fact that some apps are entirely free can serve as a good reminder that for the creators there are many other, equally attractive forms of remuneration than just getting immediate cash. App developers certainly seem to have many other reasons than just getting paid 'by the unit', such as creating a stronger 'Pull' for their other offerings or providing the app to get a wider audiece for their skills - and the same argument could certainly be employed for music I would reckon. Why not start with the stream-on-demand, then offer the download for free or for a very low price - but then upsell the fans to a much larger fan package, similar to what Depeche Mode is now doing with their Season Pass. The ever-resourceful Techcrunch, btw, estimates app store revenues to be $777 Million for 2009 - I would be even more optimistic than that, though, because I expect much higher sales of iPhones and iPod after the next version comes out in June, featuring the build-in FM transmitter that can send the music wirelessly to your car stereo (radio execs... are you ready for that?)
• The music on iTunes is both too cheap and too expensive (depending on how you look it it), but there's nothing that fits the "free stuff + premium" package that people like so much these days (such as for my favorite, Instapaper) which is how most people get hooked on the good stuff. In this world, Freemium Rules, indeed.
• Most apps are really cheap and it's easy to part with a few dollars for something that may have real value for me - especially if one of my peers has just recommended it. I have purchased at least 40 apps, and I can tell you that the barrier to purchase an app is much lower than the barrier to buying songs at $1 / Euro 1. And yes, sure, unlike music the apps can't be gotten for free anywhere else (apart from what can be done with jailbroken iphones I guess) and that certainly is a factor - but even if they could be 'pirated', I would venture to say that I would still pay for them on iTunes, because it's LIQUID, quick, convenient, low-cost and no big deal. If the music industry can achieve the same (and not just on iTunes!), than you'll see those numbers go up, for sure. Liquid and friction-less are the keywords here - and that, to me, as you may have guessed, means the digital music flat rate.
• Mobile phone apps are about ME, about my personalized style and experience. The apps give me the power to select what I like, try it and love it or hate it. See a guy's apps and you can get a feel for who he is (yes... that goes for women, too, but unlike guys you probably don't see them comparing iPhone apps over a drink;). If we can make music -and other content- more personal, more customized, too, my hunch is that would help boost the sales, as well.

So, Music Industry, here is my recipe:

Lower Price Points + Freemium + Customizing + Value-Value-Value = Revenue Growth

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Imagine an iPhone Netbook 2x the size - adios Kindle and Sony Reader. Publishers: get ready!

Thinking about the current Netbook craze I have a strong hunch that Apple may well jump in and roll out a new iPhone-inspired Netbook - let's call it the Apple iNet - that could be roughly 2-2.5 as large as an iPhone. A TOUCH-SCREEN device like this could easily become a major challenge to digital reading devices such as the Kindle (which I can't try here in Europe) and the Sony Reader (which I have but don't like a lot). I have found myself wanting an iPhone / iPod like device like this 100s of times already, especially while traveling.

If Apple does this - and I would certainly like that , let's just imagine:

• We could finally, really read offline web-pages, PDFs, slideshows, white-papers, non-fiction books etc on a nice, full-color touch screen, using next-gen versions of existing apps such as Instapaper ****, Soonr, Stanza, Bookshelf, EReader (in fact, this may be why the new Kindle app for the iPhone is crucial for Amazon!)
• We could review our RSS feeds much easier, including images and videos, using apps like Byline (my favorite) and Newsstand, or the Google Reader offline app (once they offer it)
• We could cache i.e. record video and audio streams and play them on our 'Apple iNet' device - and actually have a really nice viewing experience
• We could use the iNet device to do some simple image and video editing - but most likely this would be done 'in the cloud' not using local software

  Image via Wikipedia

A smart, Apple-style device like this (which may have similar elements to OLPC's XO2 but would not compete in the low price markets, naturally) would give a huge boost to the mobile content ecosystem - and it would also usher in an era of rampant and wide-spread electronic book sharing that would make music file sharing look like child's play.

Publishers: you may want to get ready for this sometime soon. My 2 cents: radically lower the prices for ebooks, start looking at bundles, subscriptions and flat rates, figure out how to monetize sharing with new advertising-supported models, gear up to provide added values all the time (value is around the content!!), start planning for those New Generatives - you've got another 12 months if you're lucky. Go!!

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Apple Bends to Studios, Adds Copyright Protection to MacBooks | Gadget Lab from Wired.com

Image via CrunchBase

Madness!!! Apple Bends to Studios, Adds Copyright Protection to MacBooks | Gadget Lab from Wired.com. Talk about punishing the legal and paying user:  "Appearing to cave to Hollywood demands, Apple has quietly added a restrictive copyright protection mechanism to its new MacBooks that is preventing customers from watching movies on external displays. Apple has secretly included a copy protection scheme called High-bandwidth Digital Content Protection (HDCP) in the external display ports on the latest models of it MacBooks, released in the middle of October.."

Another customer insult, just like region coding - incredible!

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Why Apple Won't Allow Adobe Flash on iPhone (Wired.com) - but not for long I think

Good story here: Why Apple Won't Allow Adobe Flash on iPhone | Wired.com. The marvels:

"Don't hold your breath waiting for the iPhone to support Adobe's Flash software: Apple's terms-of-service agreement prohibits it....Allowing Flash — which is a development platform of its own — would just be too dangerous for Apple, a company that enjoys exerting total dominance over its hardware and the software that runs on it. Flash has evolved from being a mere animation player into a multimedia platform capable of running applications of its own. That means Flash would open a new door for application developers to get their software onto the iPhone: Just code them in Flash and put them on a web page. In so doing, Flash would divert business from the App Store, as well as enable publishers to distribute music, videos and movies that could compete with the iTunes Store"

Plausible explanation but of course there is no way Apple can let this continue in the long run - everyone wants Flash on their mobile devices. Zero chance for Apple to keep the lid on like this, imho. What do you think?

Picture via Flickr - well done Martin!

Even Apple can't control it all ;) -iPhone app developers NDA dropped

It's been a while but I just ran across this snippet ;)

Apple Reluctantly Tries Out Transparency - Welcome to the End of Control, Steve? (comment on Wired.com column)

A crucial post on Wired popped up in my reader this morning: After a Decade of Secrecy, Apple Reluctantly Tries Out Transparency | Gadget Lab from Wired.com.  These paradigm changes at Apple are indeed a big deal since in my view Apple is pretty much the only market leader and 'cult brand' that still banks solidly on a Total Control paradigm - and the bizarre thing is that I like their stuff, a lot, regardless.  So...Wired's Brian Chen writes: 

"The tight-lipped corporate giant recently made a move toward transparency when it lifted its iPhone non-disclosure agreement. The unpopular policy prohibited iPhone application developers from discussing their coding techniques. Lifting the NDA may hurt Apple by exposing the inner workings of the iPhone to competitors like Google and Nokia. But increasingly open competitors and disgruntled developers may have forced Apple's hand..."

This last sentence is important - this is happening everywhere: openness trumps closedness, trust trumps control, and increasingly so. Give it another 18 months, riding on the crest of the wireless mobile broadband explosion fueled by powerful mobile devices, and everyone will be busy showing us - the people formerly known as consumers - how open they are, and how much they will empower us and deserve our trust.

Look at this key sentence in Apple's explanation why -until now- they required NDAs for the iphone app store developers:  "We put the NDA in place because the iPhone OS includes many Apple inventions and innovations that we would like to protect, so that others don’t steal our work"

The fear of being ripped off caused them to want to control the people that worked with and for them - their biggest fans and most important users! Sound familiar? In the future, this is a risk that you'll just have to take - you cannot publish something and then build a remote control safe 'catch' into it. My prediction: watch for Apple dropping the DRM from iTunes in the near future, as well -because now, really, Friction is Fiction.

More from Wired:  "So what gives with the openness? One of the things that's happening to Apple is that it's less able to keep secrets than it used to be, because it has a broader supply chain and broader distribution," said Roger Kay, an Endpoint Technologies analyst. "And because it's dealing with parties that need plans -- partners as well as some customers -- they need to disclose their plans. Kay explained that Apple isn't alone anymore; the company is now working more closely with partners, such as iPhone developers, mobile carriers and so on. That inevitably forces the company to open up..."

In other words, you can't go it alone anymore, you can't keep the lid on people that are adding value to your enterprise, and you can't dominate a decentral ecosystem - anymore.

Welcome to the End of Control, Apple?!;)

Why Is Apple Scared of the Free Market with iPhone 3G? (via Full-Blown-iPhone)

Good comment on Apple and the total-control-of-the-iPhone-apps issue here: Why Is Apple Scared of the Free Market with iPhone 3G?.

Quotes:

"My complaint is that the App Store is the only sanctioned method to get apps on the iPhone, that only “blessed” apps get in the door, and all of those apps are essentially crippled apps, as compared to the full functionality of the “jailbreaked” apps..."      I totally agree.

Alex goes on: "The point of this post is to ask why Apple seems to be afraid of competition? It has produced a revolutionary new device, putting computing power and Internet access in the palm of anyone’s hand, but then holds it (and the applications on it) back from competing in the full market place. Apple’s rhetoric is that the iPhone is the über-phone, and evangelists like me are spreading the word, and the millions of iPhones sold so far are evidence of that. Apple says it has the best solution for creating and distributing applications for the iPhone. If those statements are true, why not instead of locking the iPhone and its apps down, let them stand on their own merit and compete against other offerings in the open market? The pricing subsidy, the crippling of official SDK applications, and the limitations of who can sell what in the official App Store each hold the iPhone back from reaching its potential. It’s already amazing, but the competition would make wireless carriers’ services better, it would make the applications better, and it would competitively lower the iPhone’s price instead of artificially relying on this subsidy-model shell game. Why not open up a little, Apple?"

He makes a very good point here. My question is this: are we willing to forgive Apple's relentless control desire for what some of us think is the best possible walled garden of mobile goodies we can get at this time? How does one weigh against the other? Where does the legitimate compromise end, and where does the wall-building start? Is this for the good of Apple or the good of the people formerly known as consumers?  Please comment below. 

And don't forget to visit my other blog over at Mediafuturist.com (where I post a lot more regularly - for now!)

Apple iPhone - the new walled garden ?

Techcrunchit has a good feature on this - food for thought, indeed:

"Geeks and enthusiasts.. lined up enthusiastically on Friday to purchase a device that is completely proprietary, controlled and wrapped in DRM. The irony was lost on some as they ran home, docked their new devices into a proprietary media player and downloaded closed source applications wrapped in DRM. I am referring to the new iPhone - and the new Apple iPhone SDK that allows developers to build ‘native’ applications. The announcement was greeted with a web-wide standing ovation, especially from the developer community. The same community who demand all from Microsoft, feel gifted and special when Apple give them an inch of rope. When Microsoft introduced DRM into Media Player it was bad bad bad - and it wasn’t even mandatory, it simply allowed content owners a way to distribute and sell content from anywhere. Apple has wrapped the iPhone SDK in enough licensing, security controls and right management that it would make the Microsoft Acive Desktop team blush. The phone and platform that is certain to soon take second spot behind Symbian in the smart phone market is also the most restricted and closed. Applications can only be installed from a single source, iTunes, and open source applications and distribution is near impossible. How do you install an iPhone application without iTunes..."

It is surely bizarre that we are willing to accept this from Apple but utterly reject it from everyone else. Thoughts, anyone?  Use the comment box below.