Friday, March 7, 2008

The Coming iPhone Halo Effect

The other day Apple held their much anticipated iPhone SDK Roadmap event. Executives Steve Jobs and Phil Schiller were on hand to kick things off. Around the same time Fortune magazine published an interview they did recently with Jobs. At some point during the coalescence of these two events it occurred to me just how big the SDK announcements were. They foretell the coming storm of new Mac adoption due to an iPhone halo effect.

Jobs references the so-called iPod halo effect that analysts cite as a reason for rises in Mac market share in the Fortune article, "We helped it along. But I think a lot of it is people have finally started to realize that they don't have to put up with Windows - that there is an alternative. I think nobody really thought about it that way before." Since digital music players didn't have a monopoly brand associated with them, there was no stigma in the Apple devices gaining a lion’s share of the market. As these devices become more advanced, people are starting to realize that when they have “the whole internet” in their pocket, as with the iPod Touch or iPhone, what they really have is a mini-computer; and that mini-computer is running Mac OS X, not Windows.

Back to the SDK Roadmap, it might have been more clear if Schiller had stood on stage shouting, “Developers! Developers! Developers! Developers!” in a mad frenzy like Steve Ballmer, but it still became apparent that Apple’s strategy is to bring developers into the Mac fold to build a robust application ecosystem all the way from the mobile iPhone OS up through full-fledged OS X.

A large portion of the event was taken up by developer presentations of the work they had completed in just two weeks using the new SDK. It was mentioned repeatedly how many of them had never used a Mac for development or even used Objective-C. It was also revealed, though not trumpeted loudly, that iPhone development will take place on Macs and only on Macs. Those who want to take part in building the iPhone revolution will have to become Mac users and XCode developers.

Just how lucrative this market could be and how easy it is to sign up were clearly flaunted. Apple will host, sell, distribute, and update your app if you simply register as a developer for $99. The tools are free. The developers set prices and get a straight 70% of the revenue. And of course there was “One more thing.” If the regular enticements are not enough, how about $100 million in venture capital earmarked for revolutionary iPhone apps?

Apple is pushing the Mac market from the bottom up and from the back door in. More than a few independent developers are going to be enticed by this potential revenue. They will need Macs. Many of the mobile apps will likely scale easily to full-blown OS X. Once developers are comfortable in XCode, why switch back to anything else? At the same time users are getting used to carrying around a mini Mac. With the OS, applications, and even multi-touch gestures transferring over from mobile to desktop, more and more people will find comfort in this Windows alternative. The iPhone halo could be huge.

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