Nov 5, 2008

The iPhone Market Opportunity

It's standing room only in this session. I guess there are a lot of iPhone afficianados out there. The panel includes: Raven Zachary (, Bill Dudney (Gala Factory Software LLC), Matt Murphy (Kleiner Perkins Caufield & Byers), Tom Conrad (Pandora Media).

Raven Zachary - ( product management consultant for iPhone. Helped with the Obama iPhone app.The iPhone is unique for three reasons
  1. It's persistent: mobile broadband, always-on, in your pocket.
  2. Mobile web: 13M iPhone units (source: Apple), 3-6M iPod touch (estimated by Zachary)iPhone OS generates 74% of all mobile web traffic. Beats Windows mobile, Symbian, sidekick. Blackberry is great at e-mail but generates the least mobile web traffic. The Sony PSP generates twice as much web traffic.
  3. Application distribution. Over 6,000 apps in US. 1/3 are games and entertainment. Revenue share: Apple keeps 30% of revenue.
Matt Murphy (Kleiner Perkins)
  • June 2008 - 6M iPhones (sold 1M 3G iPhones in 3 days, 7M 3g iPhones in 90 days)
  • Sept 2008 - 13M iPhones
  • Dec 2009 - expecting 50M iPhones
  • 500 apps at launch, 7200 apps now.
  • 90% of people download apps. Other phones: 20%
  • 5 iFunded companies: whrrl, pelago, iControl (control appliances in home), BooYah! (from world of warcraft guys), ngmoco
  • >3000 proposals received so far, met with >200 companies, >5 actively engaged, 5 funded. This is 20x other platforms/spaces. Looking for companies that can scale, rather than lifesytle apps.
  • Plans: business vertical, consumer vertical are the largest, healthcare (12%),
  • Would like to see more enterprise apps for the iPhone. 40% of all Fortune 500 have iPhone app in trial.
  • 12M iPhones (250M phones total in US). iPhone app downloads: 14M/week, rest of US: 3M/week
  • iPhone is changing behavior: browsing news, playing games.
  • iPhone developers in short supply.
Kleiner Perkins iFund success criteria:
  1. Inherently mobile use cases
  2. Context over content
  3. Real-time, immediate utility (apps that need 3-5 mins of training, the usage drops off)
  4. Simplicity
  5. Frequent usage
  6. Inherently viral
  7. Massive scale possible (address a large audience)
  8. Natural business model
  9. Cross platform with mobile integral (attract web users and mobile users)
  10. Take advantage of iPhone platform.

Tom Conrad (CTO, Pandora Media)
  • Largest Internet radio broadcaster. ClearChannel has 20% of all radio.
  • Apple reviews all app-store apps. Takes 24 hours to 7 days. Brew takes 1-6 months to review, at a cost of $2500, and uses NTSL for testing.

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