iPhone OS 3.0: Showing us just how big the iPhone is

Posted by Christian Zibreg

Chicago (IL) - As
planned, Apple previewed their next-gen iPhone OS 3.0 today to select
group of media members at a quaint company gathering inside their own Town Hall -- located at the Cupertino campus. Beyond new features shown for
users and developers, Apple executives also fed us the latest stats which astounded even veteran Apple watchers. If there's one thing the iPhone OS 3.0 preview has emphasized, it's just exactly how big the iPhone platform is, and how much room there is still left for growth and expansion.

This thing is just huge! Unlike the two years previous when it
was non-existent, Apple's iPhone platform is now the hottest mobile
platform in the world with over 30 million iPhone and iPod touch
devices out in the wild. That figure has brought over 50,000 paying developers (with over 800,000 free iPhone SDK downloads) to Apple's door. So far, they've written more programs in just eight months than the Windows Mobile platform and its third-party developers
have seen to date in over nine years. At the same time, Apple's software bazaar is
nearing the one billion download mark, enabling even a small guy to
become rich overnight with only a moderately successful iPhone app.

The App Store also shows no signs of stopping and
is already having positive effects on sales of the iPhone and iPod
touch hardware, the same as iTunes did for iPod sales. So far there have been 800 million iPhone software downloads, including both free and paid applications. Unreal.

iPhone OS 3.0 demoed

Greg Joswiak, Apple's
VP of iPod marketing, officially kicked off the
event. He was soon followed by Apple's senior VP of iPhone
software, Scot Forstall -- who unveiled new features of the operating
system for developers and end-users. It was through Joswiak's
introductory presentation, however, that we have learned of several
official figures which paint the picture describing exactly how large a behemoth the iPhone platform has
become.

With less than two years under its belt, iPhone has managed
to overtake long-established rivals like Windows Mobile in several key metrics including software availability and winning the hearts and minds of developers -- zooming past
most rival smartphones including RIM and Android G1.

It is remarkable that
Apple has actually increased the gap between rivals who still argue over
megapixels in camera, processor types and other hardware features. Such silly disputes remind me of the U.S. automobile industry who similarly insisted on
looking at specific hardware features while countless, cheaper, more efficient and smaller cars from
Japan were grabbing their market share right from under their nose.

The ultimate pitch:  An installed base of 30+ million devices!

Greg
Joswiak's highlighted stats definitely paint a picture of iPhone's
omnipresence. He said the handset now officially sells in 80
countries globally as of this week -- compared to just one territory when
it launched less than two years ago. Since its launch in June 2007, over 17 million units have been sold (as of December 2008). Joswiak
also stressed that the company sold 13.7 million units in 2008 alone,
topping the widely-publicized, self-imposed 10 million unit target.

When iPod touch sales are factored in as well, Apple has sold a combined 30 million
iPhone OS-enabled units as of the end of 2008 -- this figure does not include sales data from January, February or March.

Developers:  Flocking to the iPhone in droves

The 30 million installed user base is drawing lots of developers to the platform, each hoping to grab their piece of Apple's growing pie. Joswiak said
that since Apple started its iPhone developer program about one year ago, its
software development kit (SDK) has seen over 800,000 downloads to date.
He said there are also over 50,000 paid developers, small and big
alike, who now program for the iPhone OS, with 30,000 coming new or fresh to the platform from other products.

Referring to Apple's seemingly ambiguous
software approval process that sometimes raises eye-brows,
Joswiak said Apple approved 96% of submitted programs,
while 98% of those applications were approved in seven days or less after being submitted to Apple.

Apple still
maintains the original 70:30 revenue sharing model, keeping 30 percent
of the revenue from all paid applications for itself to cover the cost of
running and marketing the store, while developers get the remaining 70
percent, paid on a monthly basis.

App Store:  Pushing hardware sales

Joswiak made a point of noting how the tremendous developer support which exists, that which has brought an
astounding number of applications to bear on the product, has worked "giving customers more reason
to buy iPhone and iPod touch,"

confirming that the App Store (just like
iTunes) was designed to help push hardware sales of the device.

Unlike rivals who still don't appear to grasp the basic concept that the battle for mobile space consumers is fought over software and not hardware, Apple is already far ahead with its mobile software bazaar. Joswiak
confirmed that the App Store now carries over 25,000 applications,
topping even Windows Mobile by 20%. And in eight
months of operation, users have already downloaded over 800 million
applications from the store. He said, "This is just the beginning. Imagine where it's going to be in the coming months." He was teasing members of the press with the idea, but the reality is the iPhone platform has far, far to go.

Pointing
to the fact that the iPhone has revived bedtime programmers from 80s,
Joswiak ran a clip featuring Trism developer, Steve Demeter, who made a
fortune on his game overnight. He literally made hundreds of thousands
of dollars in just few months. "The App Store is a meritocracy,"
Demeter proclaimed in the video.

iPhone OS 3.0:  Focused on developers

Beyond the invited journalists and Demeter, many
other developers had been invited to the event as well. The new developer-focused
iPhone OS 3.0 provides features which leave developers satiated. Features like in-application purchases and background
notifications, paired with many end-user improvements now made possible through an enhanced API with over 1,000 new function calls; these should all come together and enable the
iPhone platform to remain competitive against the growing crop of smartphones scheduled for arrival throughout the year. But, more importantly, at the
same time it will keep consumers spellbound, increasing further the number of
developers and accessory makers looking to dive deep into the platform, profiting from the entire
ecosystem which Apple has created, fostered and addressed significantly with their iPhone OS 3.0 refresh.

As Joswiak said, "Imagine where it's going to be in the coming months." How true indeed.