App Developer Conversations: What iPhone 5 means for Apple and app developers

Robi: Hello. Welcome to another episode of App Developer Conversations. I
am here with Ian Sefferman, of MobileDevHq, and Ryan Morel, of
PlacePlay. I am Robi Ganguly, of Apptentive.

Yesterday, Apple finally announced the iPhone 5 after lots of waiting,
blogosphere speculation, etc., and they showed us some cool things.
Most importantly, they told us a bunch of stats that were really
impressive. Number one was that 90% of apps are downloaded at least
once every month, which I thought was amazing. Number two, that 400
million iOS devices had been sold as of June 2012.

I think that the thing to talk about first is just Apple has created a
behemoth; it is a real juggernaut from an app distribution
perspective. I think 90%, again, is just shocking. They are selling a
ton of devices that seem to be in the world for a long period of time.
Let us jump off on that.

Ryan, what was your reaction to those announcements?

Ryan: Shock. I think the most shocking one is that 90% of apps get
downloaded every month, because there seems to be . . . The App Store
is certainly feast or famine, but with famine, you are still eating a
little bit, so maybe that is not that bad. There are probably
developers watching who are saying, ‘Great. That app got downloaded
one time. Yes, one time really sucks, but that is a chance, and it is
better than zero. If you are focused on building a really fantastic
app, one download might . . . you may not become the next Angry Birds,
but you have got to start somewhere.

Robi: What if that one download is [??], and he loves you, and then all of
a sudden . . .

Ryan: Yes, exactly.

Ian: I think it is interesting. Obviously, I do not know the stats for the
web, but I would be willing to bet that most pages on the web get
viewed less than. 90% of pages on the web are viewed less than one
time per month.

Robi: Yes.

Ryan: Yes.

Ian: When you compare the web to the app ecosystem, the app ecosystem is
actually not looking so bad. There is obviously a real future there.

Robi: I think that another thing that came out of this, just realizing how
many iOS devices are out there, that is really interesting is the
notion that if you get an iPhone 4, then you see the iPhone 5 and you
decide to upgrade it, generally speaking, we are seeing people take
the iPhone 4 and sell it on Craigslist, eBay or something like that.
What do you think that means, as an app developer? How should you be
thinking about those activities?

Ryan: First of all, as a consumer, it is amazing. I just looked, and my
wife’s iPhone 4, which we will replace, someone will pay $200 for
that.

Robi: That is incredible.

Ryan: That is amazing. This did not happen before. Now there is this second
market being created, which ultimately creates new opportunities for
developers. We assume that, let us pretend that there are 100 million
really active, engaged people in the app economy, and everyone else
would be secondary users who still want contact, they just could not,
for whatever reason, get the newest iPhone. Every person that gets
brought on board to the iPhone ecosystem is an opportunity for
developers to acquire new customers, because these people buying these
secondary devices are new, most likely. New people, go get your app in
front of them.

Ian: It is interesting to see how the iPhone 4 is now free with a new
contract. That is really interesting to see how that affects it. I
would love to see how that . . . That is obviously a US thing, I would
assume, and maybe part of Europe, but I would like to see how they are
going to handle that in Africa, South America, and other emerging
places, to see if they can break into the lower-end. Then to see, as
they break into that lower-end, how does that affect the app economy?
Does that fundamentally mean that the percentage of buys go down
because those people do not have the money to buy apps? Or does it
mean that those people will stick to the free apps and advertising
becomes even more important. That is another interesting . . .

Robi: I think one of the things that would be a guess is the fact that they
are retaining their value after such a long period of time, that you
can still sell it for $200. It is not just about the hardware, because
the hardware is actually quite a way behind at this point, if you look
at the specs and stuff. It is that software aspect, the draw of the
software ecosystem must be part, if not all, of the reason that they
are retaining such an extraordinary amount of value.

Ryan: I think everyone who complains about the iPhone not living up to the
expectations are totally unrealistic. I think, to your point, I do not
know that the hardware matters at this point. Great. It has a 4G LTE
chipset, which is fantastic, LG is awesome unless you use AT&T in
Seattle.

The reality is that the ecosystem around all of your content living on
one platform that works across multiple devices is what keeps people.
This is not 2005 or 2006, when a new Sony Ericsson or new Nokia would
come out and you would say, ‘I was going to go get that,’ because it
is the awesome, new hardware. At this point, it is all about the
merging of the hardware and software experience, I think.

Ian: That feels like we have gotten to the point with laptops, almost,
where . . . When I buy a laptop today, I do not really look at the
specs so much. I say, ‘I know need at least 4Gigs of RAM. Outside of
that, speed is going to be probably OK. I am not doing crazy graphic
stuff. All right. Here we go. That is it.’ It sounds like we are
getting there with mobile devices, already, where people say, ‘I do
not really care what the chipset is in there, it is probably going to
be OK. I am much more biased towards what does the ecosystem look
like?

Robi: Talking about speeds and feeds is their own way to go. One last point
on the new announcement, and then we can segway into some other stuff,
but it is a bigger screen, it is taller. I think what is interesting
about that, from an app developer’s perspective, is that you are
always struggling for loyalty, engagement, and making sure that your
top-of-mind with a consumer. Now there is an extra row, which means
that you just have that much more of a chance to show up on the home
screen. Do you think that enough app developers are thinking hard
about it showing up on the home screen, and does this change how they
are thinking, at all?

Ryan: I think it is probably, and Ian can probably talk a lot about this,
and [inaudible: 06:42]. We know from just web search that first page
results get 85% or 90% of the clicks. What is on your home screen of
your phone is similar to that first page, that is what you use most.
There being an extra a row, yes, of course that is important. I would
say that . . . I know that Ian talks a little more this, but having a
really nice icon is really important. Even if it is just pretty to
look at, and it goes on the home screen, that is good enough.

Ian: It will be really interesting to see, just from a boot perspective,
there is an app, and now you get four app icons, by default, to go on
the home screen.

Robi: Right, yes.

Ian: Which is not even necessarily a user action, it is just going to
happen, and that will affect things. You guys spend a lot of time in
retention and things like that. Do you have any understand of what the
home screen matters or how developers can use it best?

Robi: It certainly matters because you are more likely to just get them to
open you up and look at it. It is not clear, from a statistics
perspective, how many people are showing up on what home screen,
because there is not a lot of data that is shared around that. I think
that point that you just brought up is that app developers, if you are
looking at your stats over the next two months and you are starting to
see a boost in activity, it means you are just beyond the fold and the
fold has now changed. You were just on the top of the second screen,
and you are showing up, now, on the front screen. I think a lot of
people should be paying attention to that increased engagement, trying
to go connect with those people, and maintain that. Any time you can
actually communicate to your customers in whatever way you have,
whether it is email, app, inboxes, or things like that, maybe you
should actually be asking to show up on the home screen, or perhaps
even trying to understand if you are on the home screen. I guess, I
think that people could probably do more work around figuring out what
would drive them to be top-of-mind for a consumer, and maybe being
more explicit about it.

Ryan: Maybe there is something interesting like an in-game promotion: ‘Send
us pictures of us on your home screen.’

Robi: Yes, exactly.

Ryan: Something really stupid that people get excited about: ‘We will give
you 10 coins,’ or whatever is. That stuff gets picked up when other
people do it. I had not even thought about that until you brought it
up, and it is a really interesting opportunity to have for awareness.

Robi: I guess you could poo-poo the taller screen all you want, but there
is a whole set of app developers who are about to be very big fans of
the taller screen.

Ian: Yes.

Ryan: Just from my own personal perspective, I was really worried that they
were going to make a wider screen. Even though I have relatively big
man hands, when I use bigger screens, I cannot get my thumb across the
side, and that is really annoying. Then I was said, ‘Four inches
taller, do I really care about that? I think I do.’ It is nice.

Robi: Awesome. That was the first installment. In the next installment we
are going to be discussing some more about the changes to the App
Store, and what is coming down the pipe with iO6.

Ian: From my perspective, it feels like a little bit of natural evolution,
which is that once the app ecosystem reaches so many apps that
categories really does not fit the bill anymore. You have . . .