iPhone Apps in a Bad Economy

When the first iPhone came out, I stayed away from it – partly because AT&T was the carrier, but mostly because of the price. While the handset was about as much as you’d expect a boutique electronic toy to be, the monthly cost was, to my way of thinking, a lot for a phone.

At the time someone I worked with told me, “IPhones aren’t really that much – it’s only about $90 per month.”

Only $90 per month. Only. For a phone?

[sarcasm] Well hey, that’s nothing! I’ve always got about $90 jangling around in my pockets, why not burn it on a handheld woobie? What the hell else am I going to spend $90 on? [/sarcasm] (Sorry – HTML joke.)

Needless to say, in my humble opinion, $90 a month is a lot of money for a phone, unless you have need for it. And smart phones definitely have their uses. On the road it is great to be able to send and receive work e-mail, view documents or read trade news without having to haul out a laptop each time.

But the apps? The kinds of apps people generally talk about aren’t productivity apps – they’re fun. Look at this list from Brighthub of Top 10 apps. Music players, sports scores, Twitter, news and content readers. They’re great, but hardly necessary to the average American. Bear in mind, I am not hating on the iPhone. But when people talk about $90 as if it were nothing, I have to call it out.

So the iPhone is expensive to have. Therefore, the people who have one can afford one. The people who can’t don’t, and won’t see the cool iPhone game or application you created for your business. If you are actively seeking out the people who can already afford an iPhone, great – it’s certainly one way of addressing a specific segment while avoiding the one you don’t care about. But iPhones are definitely the domain of the Haves, while the Have Nots just have phones.

Think about the standard cell phone. 10 years ago, that was just becoming affordable, so everyone started having them. The same thing happened with computers 15 years ago, or cable television 20 years ago: Expensive and exclusive, then eventually there was a price drop and it was rolled out to everyone else.

With iPhone service costing what it does now, it is not yet the time to start developing applications so you can draw attention to your business. (Again, unless you’re only trying to get the tech-oriented upper middle class to see you.) Particularly while the economy is what it is, people are not rushing out to buy costly electronic devices that stay costly on a monthly basis just because everyone on CNET is talking about how neat it is. It may be some years before we’re back in the kind of shape where people will gladly spend that kind of money on one. Certainly it will be years until they come down in price, the way all other electronics have in the past.

(By the way, I find it perplexing that my G1 can do roughly anything for a flat $25 a month, while making calls costs another $40 and texting an additional $10. The damn thing’s SUPPOSED to make calls! Can’t a way be found to make THAT cheaper before giving me mobile YouTube access!?!)

So don’t stress putting together an iPhone app for now. In all likelihood, by the time it’s a good time to make one, the landscape will have changed again and your app will either be useless or far easier to build. I can remember being asked to look into Second Life to see if that might be valuable for creating brand presence. In 2007 all sorts of business magazines were talking about Second Life, because the non-tech oriented business mind can easily grasp it: You play a game, you meet people, you look at virtual billboards for Coca-Cola and IBM. Money in the bank!

Of course it wasn’t, because no one was buying anything there. More importantly, there were only about 8 million active users – not enough to justify the expense of the work required.

IPhones are used by more people, but not a lot more. To date they have sold 21.4 million phones – including the original ones. Many fanboys classed up to the 3G when it was launched, so the number of users is actually less than that. So while I won’t say smart phones are a fad, they still haven’t penetrated enough to be called “mainstream.”

In short, you iPhone app would reach far fewer eyes than your banners, Facebook ads or radio spots. If your product is for everyone, stick with these for the time being. Prices on many advertising platforms are cheaper than usual right now, giving you both a wide swath of potential customers and the opportunity to position yourself for when the economy has its inevitable upswing.

Until that time, or until all smart phones are affordable in anyone’s budget, a heavy investment in creating apps for them just isn’t… well, smart.

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One comment

  1. It will be soon that we will come out of this economic condition. iPhone apps for this sort of situation is very handy.

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