The iPhone Business Boom

May 1, 2009 — -- To appreciate the sheer volume of frustrated entrepreneurial energy in the United States that is being bottled-up by the economy and Washington, you need only look at the Apple iPhone. To me, it is emblematic of what is both right and wrong in America right now.

As you may have read, last Thursday at 5 p.m. Apple announced that somewhere out there in the world one of its customers had just downloaded the 1 billionth iPhone software application.

That's an astounding number, especially when you consider that the Apple App store only opened in July. It means that iPhone users downloaded an average of more than 5 million apps per day during that interval and that climbed to more than 5.5 million per day during the final run-up to billionth.

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In other words, not only is that pace being maintained, it is actually accelerating as the installed base of iPhones grows (it is now more than 15 million units in the U.S.), the number of application developers grow (there are now thousands), and iPhone users continue to increase the number of applications they wish to load into their devices.

These figures absolutely swamp the nearest competitor, smartphones featuring the Android operating system, by at least ten-to-one. However, Android phones are still relatively new, with an installed base in the U.S. of less than 2 million devices, so the gap shouldn't be surprising. And we can assume, as the numerous other Android phones now in development -- such as Motorola's -- hit the market that will we see a land rush for applications in this business as least as great as the one for the iPhone.

The implications of this flat-out race for supremacy in smart phones is the topic for another column. What I'm interested in right now is the larger cultural meaning of this explosion in iPhone software.

Sure, the iPhone is terrific device, with a lot of breakthrough features -- and some obvious weaknesses. It is targeted at a customer base that is legendary for its emotional commitment to Apple products and the company is willing to expend enormous amounts of intellectual capital designing new products and applications for Apple products. And the device has benefited from the usual the media coverage of a major, Steve Jobs hosted, launch followed by a classic Apple marketing/advertising campaign.