Many ways to polish an Apple

By Mickey Alam Khan

March 10, 2008

Mickey Alam Khan is editor in chief of Mobile Marketer

Apple last week topped Fortune’s annual list of the most admired U.S. companies and bagged a $100 million fund for iPhone programmers. Not bad for a $24 billion underdog, huh?

The Fortune anointment is a prize for innovative design and a sharp customer focus – both professed loudly by many consumer electronics and software firms but just not interpreted right. Take Apple CEO Steve Jobs’ response to Fortune senior editor Betsy Morris in an interview in the March 17 issue of the magazine:

“People think focus means saying yes to the thing that you’ve got to focus on,” Mr. Jobs said. “But that’s not what it means at all. It means saying no to the 100 other good ideas that there are. You have to pick carefully. I’m actually as proud of many of the things we haven’t done as the things we have done.”

On the plus side, Apple can take credit for the Mac, iPod, iTunes and iPhone – all trendsetters in their own right. And perhaps it was ahead of its time with the Apple Newton and Apple TV. Or maybe it was outright wrong.

“One of our biggest insights [years ago],” Mr. Jobs told Fortune’s Ms. Morris, “was that we didn’t want to get into any business where we didn’t own or control the primary technology, because you’ll get your head handed to you.

“We realized that for almost all future consumer electronics, the primary technology was going to be software,” he said. “And we were pretty good at software. We could do the operating system software. We could write applications like iTunes on the Mac or even PC. We could write the software in the device, like you might put in an iPod or an iPhone. And we could write the back-end software that runs on a cloud, like iTunes.

“So we could write all these different kinds of software and tweed it all together and make it work seamlessly. And you ask yourself, What other companies can do that? It’s a pretty short list.”

Calling all for iPhone
Now, Apple is embarking on another course: opening its iPhone platform to third-party developers.

Mr. Jobs on March 6 made public the iPhone software roadmap, released the iPhone Software Development Kit and introduced the iPhone Enterprise Beta Program. It’s clear that Apple has no intention of repeating the Mac versus PC mistake, where a better operating system lost because it was closed to third-parties.

That announcement came a day after Kleiner Perkins Caufield & Byers – the venture capital firm behind Google, Amazon and Intuit – launched a $100 million fund for iPhone programmers. It is called the iFund. A new ecosystem built around the iPhone platform will soon emerge.

When asked why choose the iPhone platform over the others, Kleiner Perkins partner and iFund leader Matt Murphy told this publication he’d rather not get into comparisons.

“Clearly there are other platforms which developers will want to write to in order to address an even larger user base,” Mr. Murphy said, “but we believe all important apps will certainly be written to the iPhone – not exclusively – to maximize the experience and that it is the best platform on the market.”

What excited him about the iPhone are the user interface and device, development environment and engagement demonstrated already by its users.

“It’s off the charts relative to any other platform,” Mr. Murphy said. “Am sure you’ve seen the data that 90 percent of iPhone users are using the mobile Internet regularly relative to 20 percent on other phones, on average. This represents 70 percent of all mobile Internet usage in the U.S.!

“This is enormous and this user base is rabidly awaiting other new applications and services,” he said. “With the native apps and integration with things like the accelerometer, location info, address book, camera, et cetera, the possibilities for innovation are boundless.”

Which clearly hints at the possibility that as the Apple iPhone soars in popularity and gains wider distribution, consumption of the mobile Internet will also grow exponentially.

An easy-to-use Safari browser that delivers a regular Internet experience on the iPhone is an advantage over competitors still making the case for a mobile version of the Internet.

But is a $100 million fund enough for spurring iPhone programming?

“We’re not sure that $100 million is enough,” Mr. Murphy said. “We’d love it if it’s not. If we run out, we’ll allocate additional capital to the initiative.”

Not a hard sell
Perhaps mobile marketers and service providers should pay more attention to the iPhone’s role as a catalyst in mobile commerce even as players in the mobile media space figure out a viable model.

“Mcommerce has very interesting potential as people are able to do things like price-compare, find an item, get an offer, get product info and find it near them based on location-based services,” Mr. Murphy said.

“There is also huge potential in mobile payments, but the opportunity varies across different geographies where the payment pain varies – for example, high pain in India, less in the U.S., but still a big opportunity for convenience paying at $25 and under,” he said.

“Mobile media is a bit more difficult to figure out as right now it’s largely about repurposing Internet or TV content and I think we’re starting to see, for example, on the video side that people want ‘snack TV’ rather than to watch an entire show,” he said.

“More innovation on content needs to happen and we’re still nascent on that dimension. New media needs to emerge that takes advantage of the fact that the cell phone is also a media-capture device. An example is user-generated video and video-sharing in real-time which looks to be a very interesting new form of media and consumer use case.”

Mobile marketers and developers interested in creating applications for the iPhone should keep Mr. Murphy’s words in mind. They should also hang on to Mr. Jobs’ philosophy, as explained in that Fortune article:

“We don’t get a chance to do that many things, and every one should be really excellent. Life is brief and then you die.... So it’d better be damn good.”