Radio Interview: Does the iPhone represent a new gold rush? |
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Radio Interview: Does the iPhone represent a new gold rush?
I had the pleasure to chat about the iPhone on KUOW's "Weekday" program today, along with fellow guests Ethan Lowry of Urbanspoon, Steve Murch of Big Oven and Victor Melfi of VoiceBox Technologies. You can listen to the full broadcast here.
We covered a lot of ground in the hour long program, which concluded with host Steve Scher leading an Ocarina jam session. (I should have captured video of that.)
Some of the most interesting insights from the panel -- I thought -- dealt with whether the iPhone represents a compelling business opportunity for entrepreneurs and investors. That discussion started around minute 31, with Melfi saying the App store doesn't represent a gold rush in the traditional sense.
That's because it is difficult for any real business to make money, other than Apple.
"... The developer in this ecosystem is really taking on a lot of risk and it is not an environment which you can count on sustainable revenue," said Melfi.
Lowry -- whose Urbanspoon app has recorded more than 6 million downloads -- said that Apple does play the role of "Sheriff" and decides what gets in to the App Store. And he said it is good for consumers that Apple takes the best apps and "bakes them" into the next-generation phone.
Still, that gives a lot of power to Apple as the promoter of apps, something that Lowry said his company benefited from given its exposure in Apple's TV campaign.
"Apple really does have the stranglehold on how to get your app noticed in that environment and that is really powerful," he said.
Melfi added later that "there are no barriers" to app development and "there is no way to sustain the cost of trying enough apps to find a hit."
Scher then compared iPhone app development to fishing, with people just hoping they will get a bite.
That prompted a follow-up from Melfi in minute 43 who said established brands can do well with new apps that extends their core service, as well as small developers who get an occasional hit.
"You are going to have a lot of established brands wining and then you are going to have a revolving door of people trying to look for a hit. That creates a stimulating market for the person who owns the market -- Apple. But the probability of success for anyone player is very random. So it is a tough business."
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