Of iPhones and revenue - This may have been the moment of 'iPhone 4,' but three other Apple milestones deserve merit

Topic

Devices

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Three numbers caught my eye during Steve Jobs' annual Monday morning WWDC keynote amongst the noise of the iPhone 4. Two of which we have been heading steadily towards (yet represent an achievement of considerable prowess) and one, a new benchmark for an emerging battleground.

The first - Apple's App Store is now a US$1.43 billion revenue stream or, as Jobs put it, a US$1 billion cheque for developers. Combine this with the ever-growing ecosystem - currently 5 billion downloads across 225,000 apps and 100 million devices - and this makes the iOS family the fastest-growing mobile platform in history.

The second? 100 million iOS devices. This is worth repeating. Given that the last-reported cumulative sales for all iPhone models stood at 51 million in Q1 2010, it's very clear Apple's 'app success' has the considerable weight of non-contract, non-cellular devices behind it. This has proven key to Apple not only in expected segments such as students and casual consumers who want the device without the ties but, critically, to developers. Low-barrier admission to the platform with no contract is something that competitors such as Android have yet to match: the iPod touch - and now iPad - of the family.

Thirdly, Apple has garnered iAd commitments to the tune of US$60 million in just over eight weeks since announcing the platform, which opens on July 1 for all iOS 4 devices. Again in Jobs' context this represents 48 percent of a recent JP Morgan forecast for H2 2010 mobile display advertising.

In itself, these three announcements would be headline news were it not for a new iPhone. By any measure, the App Store has been a pioneering, runaway success for Apple and a kick-start for the industry. While size doesn't of course guarantee success, playing the scale game continues to work so effectively for Apple since the attraction lies in the 'app for that' mentality among consumers. While no one person can claim to have tried all 250,000 apps, they do enjoy the subset that fits their usage - and with thousands more, can happily assure that their mum, dad, sister, brother or friend will find the same.

iAd is of course an entirely different cut of revenue. Today's announcement was equal doses of Apple announcing its success and a clear message to prospective advertisers - if you're not on board yet, get on before July 1. Given the current state of mobile advertising, the bar isn't set particularly high for Apple to reach in that regard, though the current clientele and committed revenue certainly is impressive momentum for two months' work. It's also worth noting that iAd exists for several reasons, not least significant is the drive of consumer expectation towards free and low-cost apps. iAd offers a comfortable, endorsed method to support - not reverse - this trend in the mind of developers.

And in usual Apple flair, there was a certain device announcement too.

Again, the statistics tell the tale of how far Apple has come as a mobile device company in the three years since June 2007. The thinnest smartphone on the market; 9.3 mm, 4x the density of the current iPhone/iPod touch screens with IPS technology from the iPad. The A4 chip, faster performance and more room for a larger battery with a 40 percent improvement in talk time. A 5 megapixel back camera with LED flash, a front-facing VGA video calling camera, a gyroscope and 802.11n WiFi networking round off the improvements to what is a substantial upgrade at the exact same price-points for the last model.

In essence, the major upgrades reflect what Apple does best - adopt existing technologies and establish their attraction through highly successful and personal marketing. The fact that some of these improvements have come at a slower rate than some consumers and commentators alike would desire serves the same reminder on the other side of the coin - that Apple is still a young player feeling their way through the mobile industry, albeit one that would rather take the time to execute with perfection than rush unfinished features.

Suffice to say, whether in your opinion Apple have raised the bar with truly new features or 'merely' execution, competition in the smartphone arena will enjoy another healthy - and rapidly evolving - year ahead.

Report details

Of iPhones and revenue - This may have been the moment of 'iPhone 4,' but three other Apple milestones deserve merit
Released
JUNE 2010

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