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 (raven.me), Bill Dudney (Gala Factory Software LLC), Matt Murphy (Kleiner Perkins Caufield & Byers), Tom Conrad (Pandora Media).

Raven Zachary - (www.raven.me) 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.
    

mmurphy@kpcb.com kpcb.com/ifund

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.