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26 Mar 2010

The rise of the app entrepreneur

iphone with apps
The soaring popularity of smart phones has created a new type of entrepreneur - the “app developer”.
Whether it is finding ladies toilets on the London underground, identifying bird songs, forecasting snow conditions at ski resorts or just buying stuff online, somebody, somewhere has come up with a clever little computer programme that lets you do the task from your handset.
The industry has grown up around the iPhone. More than 140,000 different iPhone applications have appeared since Apple opened its Apps Store on iTunes to outside developers in July 2008.
Although it is the dominant player, there are many more to choose from including those from BlackBerry, Microsoft, Google, Nokia, and Samsung.
Applications rarely cost more than a few dollars or the equivalent in other currencies to download. Many are free.
But already the app market is worth nearly two and a half billion dollars a year, according to data from AdMob, an advertising company.
Other smart phone brands are striving to erode Apple’s early lead by developing their own platforms for apps.
‘Pocket gods’
The popularity of apps has created a gold rush mentality among a new breed of independent software developers. Some have even become millionaires.
However, it is hard to find an app developer who admits to being rich. Dave Castelnuovo is a possible candidate.
Based in San Francisco, he is the co-creator of Pocket God, a popular game for the iPhone that costs 99 cents and has been downloaded by more than two million people.
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“We are currently the best-selling app of all time,” he says, sounding slightly bemused.
The runaway success of his product has clearly taken him by surprise.
“When we started out we only budgeted a week’s worth of time to Pocket God, hoping we’d make a little bit of money and have a framework for doing a real game,” he says.
The setting for the game is a tropical island peopled by characters called the pygmies. The iPhone user controls their lives.
“You can do good things like watching them fish or feeding them,” explains Mr Castelnuovo.
“But most of the fun lies in the sadistic things you can do, like sacrificing them or flicking them into a volcano.”
He describes the game as “a safe sandbox that allows people to get that mean itch out”.
It is an interesting insight into what tickles the fancy of smart phone users around the world
But Mr Castelnuovo denies that he is a millionaire. “Uncle Sam has kind of taken care of that,” he says referring to the taxes he must pay the US government.
‘Powerful idea’
The success of Pocket God and other pioneering novelty apps has inspired large numbers of small scale entrepreneurs to have a go at developing software for smart phones.
Pocket Gods
Pocket Gods has become a firm favourite with app fans
Nobody knows how many app developers there are, but the figure could run into thousands.
However, with so much competition around it has got a lot harder to create a top seller.
“You definitely have to do a lot more work today - doing PR and talking to people,” explains Mr Castelnuovo.
The essential point about current apps is that they are mostly intended to entertain and they have not involved a lot of work to develop.
The typical app development company consists of “two kids in a garage”, explains David Yoffie, a technology expert at Harvard Business school.
But he believes that ultimately the app could change the face of computing.
“There’s enormous innovation and a constant stream of new creative applications are coming online”, he says.
“So forget about current applications, what matters are the creative things we may see in future.”
It’s a lot like the internet bust that happened a few years ago
Dave Castelnuovo
Mr Yoffie draws a parallel with the early days of personal computers.
“If you think about the old spread sheets before Lotus 123 and Excel, they weren’t terribly functional,” he says, referring to two landmark programmes in desktop computing.
“But ultimately we figured out how to take the basic ideas that were developed in the very early days and make them better, more effective and very powerful,” he adds.
‘Crazy ideas’
Mr Yoffie believes apps for smart phones will go through a similar process of evolution.
In the longer term, he thinks smart phones will have the capability to act like portable subtitling machines, translating foreign languages for those visiting foreign countries.
Other firms also offer apps for their handsets
But not everyone believes the centre of gravity in computing will shift to smart phones.
Among the doubters is Mr Castelnuovo.
“When something generates a ton of excitement at a certain point people are entering it because of the excitement not because there’s anything solid there,” he says
“It’s a lot like the internet bust,” he says, referring to the share price collapse of internet companies a decade ago.
“A lot of people are doing a lot of crazy ideas… it could end up being a bubble,” he says. But he also believes the app economy “could take off”.
So the two-year-old market for smart phone apps seems to be at a crossroads.
On the one hand it is growing fast and there is the potential for really powerful apps that could change of the nature of computing.
On the other hand, it is also possible that the app phenomenon has been overblown.
Commentators say a lot depends on the success or failure of Apple’s much-hyped tablet computer, the iPad, which is due to go on sale soon.
Many see the iPad, with its iPhone-like appearance but much larger screen, as the ultimate vehicle for running apps.

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