Spider's Apple

Whom does Steve Jobs talk to from press?

2009-08-26T04:32:00.000-07:00

Lately there have been a couple more press articles than usually that touch upon Apple’s secrecy, especially in relation to the company’s CEO, Steve Jobs. They are accompanied by various leaks of Apple’s PR efforts that either point at cooperation or condemnation of media and reporters.

Jim Goldman’s interview with Steve Jobs was the last fully-fledged interview that Apple’s CEO gave. It was particularly long time ago – in September 2008 after the Let’s Rock conference. Much has changed since that time in the lives of Steve Jobs and Apple.

The latest sentence that Steve Jobs threw at media representatives – as recalled by Philip Elmer-DeWitt from “Fortune” – was “why don’t you guys leave me alone – why is this important?” It was in January 2009 when Bloomberg reporters managed to get hold of Steve Jobs’s phone number and called him to confirm the news he would need a liver transplant operation.

After a nearly six-month-long leave Steve Jobs came back to work at Apple at the end of June. Despite the fact that he has been quoted twice in Apple’s pres releases since that time, no one from media has managed to get any word out of him until recently when Yukari Iwatani Kane from “Wall Street Journal” has won e-mail reply from Steve Jobs to her questions about the tablet project status. “Much of your information is incorrect”, was the first Steve Jobs’s sentence articulated directly at a media representative since January’s “telephone conversation” with Bloomberg.

Why is it important? Because it seems Yukari Iwatani Kane is a “favourite” journalist of Steve Jobs at the moment. It was her who broke the news that Steve Jobs had had a liver transplant. Her article was full of details about the whole procedure. Moreover, this article was written in an unusual style for such revelations – there were no words like “our informer”, “as we have learnt” and etc. Yukari Iwatani Kane takes up an informative tone about the fact: it was here and there, this and that happened, which is rarity in this kind of reports. It could suggest that Apple (possibly with Steve Jobs’s consent) actually “sold” the news to the WSJ reporter. Judging from previous fuss around Apple’s stock exchange performance at times of uncertainty around Steve Jobs’s health, timing was perfect – Apple had just announced a tremendous sale success of iPhone 3GS and it would be easier to minimise possible negative outcomes to Apple’s stock-exchange performance…

It would be advisable to confront Mrs Yukari Iwatani Kane’s position with what happened around an article in “Sunday Times”. There were not many differences in “facts” that both WSJ and Sunday Times give but reportedly Apple’s PR forces tried twice to block the publication in the English paper. Why? It seems an author of ST article – Bryan Appleydard – lacked a special go-ahead from Steve Jobs.

“Much of your information is incorrect”, writes Steve Jobs in the e-mail to the WSJ reporter that describes in detail an Apple tablet to come. Much of it is incorrect, which means some of it is true. Has Steve Jobs just confirmed the forthcoming debut of the table? If yes, he has done it on his own terms again. Analysis of Yukari Iwatani Kane’s recent articles in “Wall Street Journal” may just confirm this.

How Apple Changes the Mobile Software Market

2009-05-25T04:00:00.000-07:00

A billion downloads and over 35 thousand applications in the App Store - this is what Apple boasted itself with in mid April. Last December statistics showed 300 million downloads and 10 thousand apps in the App Store.

Why to cite this archival data now? There is a new report by Strategy Analytics that points at the fact that Apple won 12% of the mobile software market at the end of 2008 to become its leader. The iPhone producer jumped into this very dynamical computer software market niche that will soon become the driving force of the whole market and will change the business character of telecoms. Repercussions connected with Apple's debut on the mobile software market are far reaching. As the author of the report - David MacQueen - notices, due to the fact that the mobile software market is now densely populated, competition gets really hot. Lower prices are natural consequence of this rivalry, which consequently leads to lower margins of developers. Apple does not make it any easier for developers. The App Store operator did not set clear rules how it promotes applications and developers on the most attractive places in the App Store.

The gravity centre of the mobile software market seems to be changing due to App Store's unprecedented success. Mr MacQueen notices the distribution of mobile applications used to be dominated by telecoms that kept the majority of profits to themselves before the App Store debuted. After App Store's success that was completely independent from telecoms other producers of mobile hardware reacted in the most natural way - they rushed to introduce their own mobile stores. On one hand, they wanted to get their own bite into the mobile software boom and on the other hand, to get independent from mobile operators.

Telecoms do not want to get ousted from this attractive business and try to adjust their tactics in hope to win back developers' attention - explains David Kerr from Strategy Analytics. A couple most important players on the global telecom market have already announced their projects to launch their App Store clones. There are two biggest telecoms in the world among them: T-Mobile and China Mobile - the players with high chances to get their foothold on the mobile software market.

"Apple’s (stores) has won the initial skirmishes but the war is far from over," Mr Kerr concludes. Possibly it's true but Apple will not let it go after this initial success and winning over 12% of the market. A new version of a mobile operational system iPhone 3.0 will introduce extremely important innovation that will surely bring additional hundred millions - micropayments. Not once, not even twice has Apple proved it has a penchant for creating particularly purchase-friendly environments for its products. There is a "buy" link in every little corner in iTunes. You can order print of your calendars or photo albums with a single click in iPhoto. You are able to buy apps from the App Store so effortlessly that you might just not feel you're spending money. It will become even easier now. So far the purchase of app has been a one-time event in the App Store. iPhone OS 3.0 will change this dramatically as developers will be allowed to sell additional content right inside their apps now. The consequences of it are easy to predict and actually Apple has already shown a trace of it to us when Scott Forstall presented a preview of iPhone 3.0 back in March. You play a fancy game; you have just ended the second level and you want the next one? Pay for it without leaving your game. You want to lead a virtual life with an iPhone app? Pay for additional elements of your virtual entertainment without leaving your second life. You want to follow live result of Champions League final? Pay for it. This will boost money flow in the App Store and Apple will cash 30% of any additional dollar taken over from users.

It is almost certain that a highly anticipated new product from Apple - netbook vel. iTablet will be based on the software distribution from the App Store. This way Apple will not only largely develop its numeric distribution (the number of products with access to the App Store) but also weighted distribution (the number of products that bring the bigger chunk of sales).

iPod vs iPhone - Growth Potential Analysis

2009-05-19T07:24:00.000-07:00

"BusinessWeek" reports citing NPD's data that iPod sales fell 9% between March and April (year to year) despite the fact that the average selling price dropped 11%. The inevitable process has begun.

Gene Munster from Piper Jaffray, whose record of projecting Apple's results is quite impressive, foresees a yearly decline of between 5 and 14% in the sales of iPods. If it turns out to be true, it will be the first time in history when there will be lower number of Apple's multimedia portable players sold year to year. Mr Munster believes Apple will report between 9.5 million and 10.5 million iPods sold this quarter (ends in June). Apple sold 11.01 million iPods in previous quarter (an increase from 10.64 million a year earlier).

Interestingly enough, the average selling price of the iPod has been on a downward trend lately. This is mainly due to the new iPod shuffle - the latest player in Apple's production cycle that generates a bigger part of iPod revenues now. Average turnover from the sale of one iPod was USD 151 in the second quarter of 2009, which means the average selling price has fallen 20% from USD 171 in just a year. According to Mr Munster's calculations, it will fall 7% more this quarter to about USD 140 dollars. It will give Apple USD 1.47 billion worth of quarterly revenues. A year ago (at the end of June) it was USD 1.68 billion.

The iPod is a product that is already on the right side of a product cycle chart. A marketing name for such products is "cash cows". Their sales dynamics is low but they enjoy high market share, which still makes them attractive. The iPhone is a perfect example of "star". Stars are products that show impressive sales dynamics and consequently increase their low market share.

"Cash cows" and "stars" call for completely different marketing handling. The iPod market defined as mp3 players is shrinking fast. You can see it in analysts' projections and quarterly results presented by Apple. iPod share in Apple's overall turnover structure is lower and lower and the times when the iPod was the only product that kept Apple afloat seem to be fading away. The iPod accounted for 55.6% of Apple's turnover structure yet in the first quarter of 2006. It now accounts for no more than 12 - 13%. Apple can be praised for how skilfully it switched from one-product-based turnover structure to multi-product-based one with the introduction of the iPhone. It was truly a masterstroke. Apple can still successfully develop the iPod line (the iPod is still an integral part of the iPhone) and the company does not seem to be making defensive steps around the iPod, which rarely appeals to investors and media.

What does Apple do with the iPod then? It launches slightly modified versions of iPods in the two cheapest market segments (nano and shuffle) practically without any marketing back-up excluding natural marketing buzz that accompanies the majority of Apple-branded products, which the Cupertino-based company learnt to incite quite skilfully. It is not accidental that Apple upgrades the cheapest iPods because their short-term market potential is higher (clients find it easier to spend a couple dozen dollars than a couple hundred). This results in short-term and possibly one-time jumps of sales. According to NPD's data published shortly after the debut of the new iPod shuffle, its sales soared 50%. Chances that this high sales dynamics would be kept were pretty low, which is reflected in the latest set of data from NPD cited by "BusinessWeek". However, Apple will be likely to minimise sales declines for long months to come with such moves.

The iPhone is a product of high development potential, which calls for high financial layouts for distribution and promotion. ChangeWave Research has recently asked 4292 smartphone users about their future purchases. 30% of them plan to buy the iPhone. This is slightly less than BlackBerry (38%) but much more than highly anticipated Palm Pre (4%) that is to debut on June 6. When asked about a new iPhone OS 3.0, one in five responders found it a decisive factor in their future decision.

What does Apple do with the iPhone then? It introduces thorough changes to iPhone OS that surely devoured more financial resources and human labour than upgrades of iPods. Apple regularly backs up its "star" with new TV ads in the most attractive advertising blocks. There are press conferences organised when every single detail is neatly discussed to raise PR hype around the iPhone. Every other week Apple informs about the new markets its smartphone is available on. If - what is being suggested more and more often - China and India join the crowd, weighted distribution (presence in places that generate the bigger part of sales) will be close to ideal.

What for, Apple?

2009-05-13T06:56:00.000-07:00

Apple has decided to directly answer Microsoft's advertising provocation in Laptop Hunters series. The Mac producer ridicules PC's faults in the latest ads of Get a Mac campaign using a similar marketing technique to Microsoft. A question arises why Apple launches into this advertising clash putting its meticulously built marketing strategy at stake.

Apple has just released four new TV spots and one of them entitled "Elimination" is in the limelight today. In this spot John Hodgman (PC) invites a couple of his friends to help a shopper named Megan choose a computer. Megan is looking for a computer without viruses, crashes and headaches. This eliminates all the PCs and she's left with the Mac.

Apple might have not reached out from its marketing creation bounders set by Get a Mac series but it is just obvious the Mac producer counterattacks the latest Laptop Hunters ads by Microsoft. Such direct engagement in advertising answers will never have positive outcomes to the brand. Average consumers usually immediately lose track of "what, who, whom and why" and they simply lose interest in it, while both brands engaged in direct advertising clash have their market image harmed.

Apple has been consequently building its marketing message based on a strategic assumption that "Macs are cool and PCs are uncool". Paradoxically, Microsoft legitimized this assumption with its latest anti-Mac ads because it did not ridicule possible faults of Macs but their price based on the uniqueness of Apple logo. An average consumer who has been watching Laptop Hunters ads and who has not been biased against any of the brands must have been made certain that Macs are truly unique - although they charge much for it but in return, they offer some added value that PCs lack.

Apple seems to be wavering from its neatly trodden path that so far has brought tangible effects in building brand awareness. It is definitely thanks to Get a Mac series that Apple successfully promoted the features of Mac brand: reliability, simplicity in use and trouble-freeness. By not answering Microsoft, Apple would prove it is still after the features. Latest Get a Mac advertising spots boil down to answering a question whether Apple hit Windows or not, forgetting about the main brand message - what it really has to offer consumer in opposition to PC.

There were some worrying signals that Apple got involved in Microsoft's play (and it is actually what Microsoft was after as MS Brand Manager David Webster put it) when Apple's spokesperson Billy Evans commented on Redmond's advertising offensive in "BusinessWeek". Apple has never commented its competitors' advertising moves before. Now Apple puts an important argument into Microsoft's hands with the Elimination spot. It is a kind of an invitation to another offensive. This is also the legitimisation of Microsoft's successfulness.

It is quite puzzling whether Steve Jobs accepted this commercial or not. Judging from all available biographical sources, Steve Jobs has always had a last word about commercials. It is generally known he likes to have a decisive stand about strategic parts of advertising spots and often makes changes in the very last moment before their airing (such a CEO is nightmare to marketing people). Mr Jobs is presently out on medical leave and as he informed last January, he takes part only in strategic projects. The question is whether the last four Get a Mac spots were on a list of such projects.

No More Free Access to Press Resources on the iPhone

2009-05-08T05:04:00.000-07:00

Free access to press resources in the Internet will soon be over. This is because of media mogul Rupert Murdoch who has just announced his company News Corp. would start charging Internet users for access to web issues of press titles. Including the ones available on the iPhone.

It will concern popular and opinion-making titles such as "The New York Post", "The Wall Street Journal" or "The Times", along with the biggest tabloid in the world "The Sun". This is no good news to all 360 thousand iPhone users who have so far downloaded a WSJ app from the App Store that grants access to "The Wall Street Journal's" premium Internet content for free. They will be forced to either remove the WSJ app from iPhone springboard or pay Mr Murdoch a subscription fee. They will most likely be faced with this choice together with the debut of the third version of iPhone OS that will allow for micropayments inside apps.

According to Mr Murdoch, free Internet content is a mistake: "It is obvious to press publishers that the present model of Internet content access is not working". However, it is worth to remember yesterday News Corp. reported a 47% decline in its profits last quarter to USD 775 million.

Despite disastrous financial data presented by Mr Murdoch's conglomerate and a natural impulse to seek an easy and fast way to fix the situation, his decision seems to be… wrong. At times when an imminent end to printed press is more than apparent, monitoring media reprints everything and everyone and blogging/microblogging is developing extremely fast, Mr Murdoch sentences himself to slow transformation into dinosaur. Seemingly still huge and powerful but more and more clumsy and slowly becoming extinct.

It is commonly known that printed press does not live off sales to readers but advertisements. However, the former would not exist without the latter and the prices of ads depend on range and affinity for a given target. Proceeds from the sales of press cover the costs in best cases. You earn on how many and for how much you can sell ads. It is quite strange that the biggest player on the press market deliberately lowers its range and consequently the prices of advertisements. Internet users are spoiled because they have everything for free and probably only a small percentage of them will invest in Mr Murdoch's subscription. Consequently 360 thousand WSJ downloads on the iPhone will soon melt into some 3 thousand active apps.

No Imminent End to Apple’s Discrimination Against Polish Clients

2009-05-06T07:15:00.000-07:00

There has recently been a massive press offensive in Poland against Apple’s discrimination against Polish clients. Despite the fact that Poland has been EU member since 2004, Polish clients are still unable to legally buy media files in iTunes. Unfortunately, it seems nothing is likely to change soon.

The biggest daily in Poland “Gazeta Wyborcza” has recently run a series of articles pointing at the lack of iTunes Store in Poland. Poland is part of the European Union market and therefore, Polish clients should have access to the same offers like their German or French pals. There are more clear examples of how Apple unfairly treats Polish clients. Despite the fact that Polish iPhone and iPod touch clients are able to register themselves and buy apps in the App Store boosting its phenomenal results, they were excluded from the Billion App promotion Apple staged when nearing the one billionth download.

It is quite difficult to be a Mac user in Poland, too. Although there is an official Apple representation in Poland, Apple does not sell its products on its own. There are no Apple Stores, only a couple authorised resellers whose prices are – mildly speaking – outrageous. After-purchase service is a struggle, too. You need to be really determined to fully enjoy using “the best software locked in the best hardware” in Poland.

“Gazeta Wyborcza” inspired Polish EU MPs to inquire at the European Commission about the unfair treatment of Polish clients by Apple. EU Commissioner Neelie Kroes acknowledged the fact and promised Polish Apple clients would be able to buy mp3 files in iTunes Store in May. This was in mid March. May has come and we know this will not happen anywhere soon. Two days ago “Gazeta Wyborza” published an interview with another EU Commissioner Vivienne Reading who admitted there was no chance to finish legislation that would force Apple to open its services to all EU member states until the end of this term of the European Parliament’s office. Legislative procedures in the European Union are usually quite protracted and in this particular moment largely dependent on imminent elections that will possibly change the political landscape of the European Union. This, in turn, will surely put the EU digital market regulation to some undefined future time.

As it might be easily predicted, Apple is almost mute about the issue. In their response to EU query, Apple’s PR forces explain the Polish market is not big enough to fully respond to the cost and labour of launching the machinery in Poland. This is probably true – although there are 38 million people in Poland, which makes it the sixth or seventh biggest EU market, numbers are pretty low. The highly elevated level of Internet piracy and social assent to intangible assets’ thefts are two big problems of Polish society. However, it needs to be clarified the prices of CDs and DVDs, which are usually similar to the ones in other EU regions, are too high for an average Polish consumer.

Anyway, that is not the case. Poland is part of the European Union and should enjoy the same rights as any other EU member states. To paraphrase the often used argument by the leading Polish opposition party, the Law and Justice (PiS) – we did not fight against the communism in this part of the world for such a long time to be left out again now when we are finally free…

There is no hope for imminent changes in law that would force Apple to stop discriminating against Polish consumers. However, there could be an alternative way. Polish clients could easily open Apple’s eyes with increased sales of legal music and video files. No company in the world will ever ignore a market with a couple dozen million potential clients. To do this we need to have the most obvious homework done, possibly with help from Apple and other global vendors. What we need is a successful crusade against Internet piracy, along with sound author – publisher regulations and a massive educational campaign over security in the Internet.

* picture taken from the biggest Polish Mac blog - AppleBlog.pl

Apple Sixth Most Valuable Global Brand

2009-04-30T06:32:00.000-07:00

Apple is sixth in the latest prestigious BrandZ ranking of the 100 most valuable global brands prepared by Millward Brown. This is one place higher than a year ago. The value of Apple brand has been up from USD 55 to 63 billion.

Like a year ago Google heads the ranking. The brand value of the most popular web browser in the world has crossed the psychological threshold of 100 billion dollars. Microsoft is up one place to number two. The Redmond-based company managed to increase its value by 8%. New technology brands (including mobile telephony) dominate the top ten of this year's ranking. Big loosers (not only of the 2009 ranking) are the brands of Western financial institutions.

BrandZ is one of a few globally recognisable rankings of brands whose results are acknowledged by top publicists and market analyst all over the world. Apple has been present in the ranking's top ten (top 7 actually) for two years in a row trailing only two other giants of new technologies - Microsoft and IBM. The fact is, however, that Apple isn't a market leader on any - apart from portable multimedia players - most important sectors of the new technology market. It supplies only 3% of the global PC market and just a tiny 1% in mobile telephony. Despite this Steve Jobs's company brand is worth more than bigger market players.

The picture comes from the Polish daily "Rzeczpospolita".

The Ungrateful

2009-04-29T07:19:00.000-07:00

Recently a lot has been written about Steve Jobs's deposition in the SEC's investigation into stock option backdating in Apple. The case itself is not particularly entertaining - simply some rich man would like to become a bit richer but somebody else failed to obey the rules. Much more interesting is an analysis how Mr Jobs "took care" of his most important managers and what some of them are doing today…

The questioning of Steve Jobs took place on March 18, 2008 and was nicely catalogued by Forbes and summarised by TechCrunch. What is the most interesting however is Steve Jobs's explanation of a situation after he was back at Apple in 1997. After Apple bought his company NeXt, Mr Jobs became Apple board advisor. As he put it himself, one of his initial ideas how to improve a company's disastrous market position was to install the cleverest NeXt managers on the key positions in Apple. He refused to take up the position of CEO (a week after his comeback to Apple the board sacked Gil Amelio) because he feared people in his other company Pixar would think he "abandoned" them. He was looking for CEO candidates but none of the candidates sent by headhunters appealed to him. He became an interim CEO and he remained one until 2000. He became a full-fledged CEO.

Mr Jobs surrounded himself with key managers with whom he carefully prepared and implemented Apple's plan to get back to league number 1. The four most important ones were: Tim Cook (Executive Vice President of Operations at the time), Fred Anderson (CFO) Jon Rubinstein (head of hardware) and Avi Tevanian (head of software). The two latter ones were the best NeXt managers who took up the most important positions for new Apple product development. Fearing market rivals would steal the best people from him, Mr Jobs fought for huge - worth 1 million dollars - stock options for all his top managers.

Let's see what the four key Apple managers from 1997 do today in 2009. Tim Cook acts as operating CEO substituting Mr Jobs who remains on his sick leave. After leaving Apple in 2006 Avi Tevenian has been sitting on the board of Tellme Network, a company taken over by… Microsoft in 2007. However, the remaining two former Apple managers hit the headlines today. Mr Rubinstein is President of Palm, a company that is largely financed by Elevation Partners where one of the partners is… Mr Anderson.

Palm has been hypnotising the market with its new smartphone Pre lately. It heavily "borrows" from Apple's ideas implemented in iPhone at the time Mr Rubinstein was still working for Mr Jobs. Mr Rubinstein's pal from the Big Four - Tim Cook has recently quite openly suggested his company "would not accept its intellectual property being ripped off" and Apple "would use whatever weapon to defend itself from such practice". The atmosphere between the former colleagues is - colloquially speaking - tense. There seems to be nothing abnormal in it; people come and go to market rivals every day. The old Polish saying is "there's no friendship in business". But in this particular case, there's something smelly… Mr Rubinstein is a specialist shaped by Steve Jobs. The person whom Mr Jobs gave a chance, put trust in him and followed through all steps of career. He gave him millions he needs to speak about to SEC today.

Sometimes you say different things about company CEOs. We call them hot-tempered, suspicious and oppressive. But we - the small ones - usually don't realise all circumstances they face in their work. Mr Jobs has always had an opinion of a "fiery" one. There is a corporate legend nicely reported in "The iCon" about people afraid of using lifts because they feared meeting Steve Jobs there. Rarely after such a ride with Mr Jobs people kept their job (he used to asked them: who are you, what do you do here and why do I pay you that much; not everybody found correct answers…). The case with Jon Rubinstein and Fred Anderson shows that sometimes you'd rather check people 100 times. You never know who will turn out to be the most ungrateful one…

Thanks a Billion

2009-04-28T06:18:00.000-07:00

Sometimes a little bit of luck can change your life. Sometimes it comes at the least expected moment. Sometimes you just arrive at the very centre of limelight for a moment. Thanks to Apple, this light is shining over Connor Mulcahey and Bump Technologies today. Apple gets some rays too…

Connor Mulcahey is a 13-year old from Connecticut who is a winner of Apple's billion download promotion. But he was not the only lucky guy out there as there is also Bump Technologies, whose application Bump was downloaded as an app number 1,000,000,000 from the App Store. Mulcahey was granted iTunes Gift Card worth 10 thousand dollar for downloading the billionth app, along with iPod touch, Time Capsule and a shiny MacBook Pro. Bump was also given something precious - a promoted place in the App Store and full PR splendour that accompanies Apple's promotion. Bump - a simple and free application that makes it possible to exchange basic data between two iPhones - has been in the App Store for just a month but it has already made history. It is simply impossible to find a medium that would not hint at Bump while reporting on the billionth app downloaded from the App Store. This has a tangible financial value.

The developers of Bump: David Lieb, Andy Huibers and Jake Mintz are former Texas Instruments employees. "I knew there had to be a better way", says Mr Lieb in his interview for "Macworld". He was no wrong. Good times came and it seems the gentlemen know exactly how to turn the world's attention into a nice looking batch of dollars. They already plan to release a premium version of their app that will surely bring them a couple dollars. They also think about branching out into other mobile platforms: Android and BlackBerry. They hope that users of all platforms can exchange information using the Bump technology

Apple? They could not have a better winner than the 13-year old from Connecticut. Teenage client is a massive market for smartphones that - according to latest research - is still to be accommodated. App Store's impressive development, especially in the field of mobile games, seems to be perfectly targeted on young consumers. What is even funnier is the fact that the teenager's win in the billionth downloaded app promotion refutes a theory that Microsoft has been promoting in its anti-apple TV spots - that young consumers do not buy Apple branded products.

Apple celebrates the billionth downloaded app on its apple.com website and with very interesting Internet ads (again on New York Times' sites). You may also expect App Store's results to find their way into TV spots soon. More billions will surely soon fill the App Store.

AppStore Billions

2009-04-27T11:35:00.000-07:00

App Store is a virtual store with iPhone and iPod touch software with an amazingly purchase-friendly interface. No installers, no tiresome filling in personal details - you need only a native iPhone application and active iTunes Store account. You purchase iPhone apps from App Store with simply two taps on its touch screen. You may find yourself spending money not even realising it.

That is why, among others, App Store has seen a billion apps downloaded in just nine months. This magical threshold of a billion downloads was crossed last Thursday, which Apple triumphantly announced on its website and awarded a user who made the historical download with a USD 10 thousand iTunes Gift Card, MacBook Pro and iPod touch. Apple rivals are fed up with looking how the market escapes right in front of their eyes knowing it is likely to be bigger than the mobile advertising one in forthcoming years. They rush into introducing their own App Store clones hoping for similar profits. There is much to fight for really. The market of mobile software - including games, ringtones, wallpapers and mobile TV is - according to Strategy Analytics - to grow 18% to USD 67 billion in 2009 despite global crisis.

Each day iPhone and iPod touch users download 3.5 million apps. It means that each and every user out of 37 million Apple clients has so far downloaded 30 apps on average. There are over 35 thousand applications already in the store, verging from the most advanced games, via e-books to professional business apps and even… human fart simulators. Both - third party developers (the biggest players on the market and total amateurs among them) and Apple (that charges a 30% sales commission) cash in on App Store. It is believed the value of App Store sales will cross USD 2 billion in 2010. Apple will earn USD 600 million net, then. Add proceeds from the sales of iPhones and iPod touches to it and you are likely to see Apple boast with at least one billion dollars in 2010 from products that have been around since mid 2007.

There have so far been 37 million gadgets with App Store access sold: 21.7 million iPhones and 15.8 million iPod touches. There is no official statistics in Poland but it is believed Era (T-Mobile) and Orange have so far sold over 100 thousand iPhones 3G. Nobody - probably apart from Apple that does not report partial statistics - monitors the sales of iPod touches in Poland.

Apple's rivals on the smartphone market (advanced mobile phones that are used for surfing the Internet more often than making calls) have no intention of seeing Steve Jobs's company earn thick millions on the mobile software boom. They collectively announced the set-ups of their own App Store clones at the biggest mobile industry fairs that took place in Barcelona, Spain last February. Nokia presented Ovi Store - a mobile store that will be pre-installed on the new N97 models starting this May and that will be available on other smartphones from the Finnish producer. PoacketGear showed App Store for Symbian - a mobile store with software for Symbian-based Nokia phones. It remains uncertain how it will be competing with Ovi Store. Microsoft, in turn, will soon introduce its new mobile operational system Windows Mobile with Windows Marketplace, a virtual store with roughly 20 thousand applications.

Google and RIM - BlackBerry smartphones producer and Palm had launched their mobile stores earlier. Google set up Android Market last October but has been allowing paid apps since last February only. RIM invited developers to write apps for BlackBerry phones last October too but it is unknown when they are available to users. Palm that is preparing for a triumphant return with a new smartphone Pre introduced Palm Software Store last December. There are only about 200 apps in it, though.

The leading global telecoms - T-Mobile and China Mobile plan to open their own mobile software stores too. The Chinese player is expected to benefit from the mobile software boom because iPhone and consequentially App Store have not made their way to the Chinese market yet.

While others are constructing their own mobile distribution platforms yet, Apple is already introducing innovations that will ensure another wave of ready cash to its pockets. The company presented a new mobile OS - iPhone 3.0 last March. The most spectacular changes come in App Store. Apple's new way to boost sales is micropayments. So far purchase has been a one-time event. Now it will be possible to sell additional content in App Store. Moreover, you will be able to sell it inside applications. You can just imagine the consequences it will bring to iPhone users. You play a fancy game; you have just ended the second level and you want the next one? Pay for it without leaving your game. You want to lead a virtual life with an iPhone app? Pay for additional elements of your virtual entertainment without leaving your second life. You want to follow live result of Champions League final? Pay for it. This will boost money flow in App Store and Apple will cash 30% of any additional dollar taken over from users.

How to optimise AppStore. Ideas

2009-04-24T07:28:00.000-07:00

AppStore's success is so spectacular that it is actually burdensome to Apple and iPhone developers. How to successfully promote apps whose functionality is a bit more than just imitating indiscriminate human noises? There are already 35 thousand apps in the iPhone software store and navigation around it seems highly difficult. So far Apple has done little to make this navigation easier.

Developers' problem is to reach iPhone users with information about their apps. iPhone owners learn about them mainly from lists of the most popular apps already downloaded on iPhones. There are usually one-dollar apps whose functionality - let's face it - is none. However, in order to appear on the list with the most popular apps developers artificially lower the prices of their apps, which makes them less profitable. Lower revenues mean lower budget for potentially better apps. Vicious circle.

Apple seems to realise that the development of iPhone software does not depend on the popularity of such apps as iBeer or iFart and starts to make moves that aim at promoting more valuable applications. The list of promoted apps in iTunes's AppStore has been enlarged recently. There are now 100 apps presented in each category (previously 50). There are new categories such as "Staff Picks", "What's Hot" and "New and Noteworthy" as well. It seems however that these moves do not change much to both: iPhone users (they still need to flick through hundreds of mediocre apps) and developers (there is no mechanism that would promote more expensive but better applications).

What would Apple do next?

Genius

This feature brought by iTunes 8.0 makes it possible to music fans to discover new artists based on data collected from their own media library in comparison with other users of Apple's jukebox. Genius works better and better, more and more successfully suggests the direction with new musical impressions to music amateurs.

Apple could implement Genius for people browsing AppStore. Based on apps already installed on the iPhone, Genius would recommend new applications that appear in AppStore. This would help more advanced applications' users cut from - let's call them this way - entertainment apps. Developers would have easier access to their targets, too.

AppStore Premium

There is already an on-going discussion about the separation of AppStore's premium part with more advanced and expensive apps. Despite obvious advantages of this idea to iPhone developers who would find it easier to shape their pricing policies for iPhone apps, it would be maleficent in the long run from the end-users' point of view. Firstly, independent developers would be banned from the limelight (it would definitely be focused on AppStore Premium) and they would have fewer chances for spectacular successes. Secondly, big developers would find it too easy to raise prices of their products. This would hinder free competition and possibly push Apple into antimonopoly trials.

Apps Recommendation between iPhone Users

A good idea would be a recommendation system between iPhone users. It has been known for long that bouche-a-oreille (or buzz marketing) pays an important role in new technologies' popularity. The star evaluation system in AppStore is rather inefficient and quite often abused. The possibility to send recommendation of apps directly between iPhone users would help good apps live in consumers' awareness.

Week, Month, or Price Rankings

Apple would also change the presentation system of their "Top Paid" and "Top Free" lists into a more detailed one. What's wrong in presenting sales and download results on weekly or even daily basis? New apps would have more chances to appear on lists, which would also make them more exposed to new clients. Instead of AppStore Premium it could also be advisable to prepare rankings based on the prices of apps. More advanced applications that cost USD 10 would have a chance for higher attention of potential clients.

We will soon learn whether Apple introduces any of these ideas. It seems everybody no longer doubts AppStore needs optimalisation as far as transparency and navigation are concerned.

Spider's Web Going Global

2009-04-02T07:32:00.000-07:00

I have been thinking about it for a couple months, but now after I have finally changed the template of my Polish blog, I have decided to do it. Let me introduce… Spider's Apple - an English version of my Polish blog Spider's Web.

You will find selected posts from Spider's Web here in English. Not all of them, not as often as in the Polish blog and only selected analytical posts on business and marketing issues. It may also happen that there will be independent from Spider's Web posts on Spider's Apple.

Welcome! Let me invite you to read my posts, comment them in English and add the site to Your rss readers.

About Me

2009-01-01T07:18:00.000-08:00

Welcome to my blog!

My name is Przemyslaw Pajak. I'm Polish. I was born in the last century, in the seventies, and when I reveal my age I already need to start with 3. I am married to a wonderful wife, and we have two beloved boys. Professionally, I am a public relations manager working in the FMCG sector in Poland, an owner of a small but robust company, and an amateur journalist.

I used to be a promising basketball player (my height is 180 cm, or 6’2”, only), a promising musician and a promising academic. I was not as successful in these endeavors as I would have liked, though - apart from the second thing - I do not regret it.

I failed to make it to my chosen secondary school and then law studies, but I'm pretty happy things turned out this way because, really, I can't imagine myself as a lawyer today. I graduated from the English Philology Faculty of the University of Silesia and then Marketing and Management Faculty of the University of Economics in Katowice. I used to work as an academic in universities as well as a sports journalist; I trained in public relations agencies, too. I have been working in the marketing business for 9 years now; starting in its agency part and now in its consumer part.

My interests are wide-ranging: I am fascinated with new technologies, particularly Apple products and its social, marketing and business dimensions. I also like good music, the type that comes out of good musicians' fingers, but also modern literature and philosophy. I am also a fan of football.

Not only can you follow my writing on Spider's Apple, but also on Spider's Web (in Polish), "Newsweek Polska" (a Polish version of "Newsweek") and "Moje Jabluszko" (a Polish Mac fanzine). I use a nickname "przemekspider" in the blogosphere and in forums.

You will also find me here:
e-mail: przemyslaw dot pajak at gmail dot com
Twitter: http://twitter.com/przemekspider

About Spider's Apple

2009-01-01T07:17:00.000-08:00

Spider's Apple is a blog about Apple. It focuses on business and marketing dimension of Apple and its products.

Spider's Apple is an English version of Spider's Web, a Polish-language blog. I started following Apple as MyApple's editor under the nick przemekspider. After leaving it in August 2008, I focused on developing my own blog that I had set up a couple months earlier. I call myself "late switcher" because although I had been fascinated with Apple computers for long, I bought my first Mac only just in 2007. This was a carefully thought out and perfectly prepared decision, though.

Spider's Apple is not a blog about news form the Apple world, although I do not run from commenting events around iPhone, iPod, Mac or iTunes. I focus on business and marketing analysis of Apple and its products' existence. Apple and its CEO Steve Jobs have a natural touch of creating technology products that become part of mass culture and set up standards of modern design. I report and analyse the growing popularity of iPhone, which I call the most important product of consumer technology if the 21st century. Since mid 2007 we have been observing a growing cult around Apple's multi-dimensional mobile gadget that truly resembles the cult that was born at the beginning of a new century around a small jukebox known as the iPod.

You will find my own comments on present events from the Apple world in business grasp. I focus on the analysis of new product development, corporate events and reports on changing market data. I also analyse the marketing aspect of Apple and its products. I also comment on the most important products of Apple's market rivals in the context of their fight against Apple brands and products.