Posts Tagged ‘apple’

AppsFire wants to viralize iPhone apps

February 12, 2010

Ouriel Ohayon is famous among French entrepreneurs as the former writer of TechCrunch France, but he is an accomplished entrepreneur and VC in his own right, who is now based in Israel. He recently left his plush VC gig to start a new company called AppsFire. I sat down with Ohayon on his last trip to Paris to talk about AppsFire.

AppsFire is a simple app that helps you share iPhone app recommendations with your friends. AppsFire has all the trappings of the latest startups, including its own short URL http://getap.ps/ and an API that will come soon, Ohayon tells me. Android and BlackBerry versions are also forthcoming.

AppsFire wants to solve an important problem: there are over 100,000 iPhone apps, and the iPhone app store alone isn’t enough to help discover all the useful apps out there. Meanwhile the iPhone app store is now a billion dollar market and app stores are sprouting up all around numerous devices and platforms.

The company also recently launched PasteFire, an app that lets you share links and other items between your iPhone and your computer — copy something on your iPhone and you can paste it on your computer, and vice versa. Ohayon tells me that PasteFire is superior to other similar services because PasteFire is smart. For example, if you put a phone number into PasteFire, it will recognize it as such and prompt you to call or add to contacts; if you put an address, you’ll be able to look it up on Google Maps, etc.

For Ohayon, the grand idea behind AppsFire is to help apps in every app store become viral and, in turn, become the center of distribution of mobile apps. Ohayon told me his business model is “secret” but it’s not hard to see how such a thing could be monetized. If AppsFire pulls it off, it could be a very powerful service.

Both AppsFire and PasteFire are part of this grand masterplan. Ohayon wouldn’t tell me what the link is between them, but again, it’s not hard to tell: PasteFire suggests actions — apps — based on the links or items you share in it. This would significantly help AppsFire boost the virality of useful apps.

Ohayon was bullish about the future of app stores in general — not just on the iPhone and other mobile devices, but on cars, fridges, etc. His goal is for AppsFire to help spread apps virally within all of the app stores that exist today and will in the future. He’s also bullish about the future of his own company — when I asked him if he was afraid that Apple would copy them, he said he’d welcome it.

He’s not the only one who believes in the future of his idea: AppsFire recently raised a big angel round from first-tier French investors including Marc Simoncini (founder and CEO of Euro online dating leader Match.com), Jacques-Antoine Granjon (cofounder of vente-privee.com), Xavier Niel (cofounder of Iliad, a huge French ISP) and Jean-David Blanc (founder of allocine.com and also investor in Jack Dorsey’s Square).

If Ohayon can bring about his powerful vision of boosting mobile apps’ virality, AppsFire is clearly a company to watch.

The strategic implications of iPad

January 28, 2010

Plenty of people are ooh-ing and aah-ing about the features of Apple’s new tablet, the iPad. A good summary is here, and a rundown of the minuses (that I pretty much agree with) is here (all via Gizmodo, including the picture above this post).

That’s all fine, but I’m more interested in the business strategy implications of the iPad (other than “it will kill netbooks!” “it will kill the Kindle!”). Here are the things that I find fascinating about what the iPad announcement tells us about Apple’s strategy:

  • Apple makes its own CPUs. This is huge! I can’t believe I’m the only one who is fixated on this. We all know Apple acquired semiconductor company PA Semi back in 2008. Everyone assumed that they would use them to design auxiliary power-saving chips for the iPhone, iPod Touch and other mobile devices. But Apple just came out with its own central processor. This is, to the best of my knowledge, the first time Apple has built its own CPU for a device, going way back to the original Mac’s Motorola 68000 (a stalwart of the history of computing!) It is also huge, of course, for Intel. Apple was sort of backed into choosing Intel to provide its CPUs as the G4 architecture kept sliding behind the PC’s x86 architecture. But Jobs knew all too well that couldn’t last. After all, Intel is exactly the same kind of company as Apple: big, secretive, extracting fat margins from its should-be-commodity products through superior engineering and savvy marketing, and most of all, never shy at playing rough. I’m pretty sure Steve Jobs stayed awake at night more than once at the thought of depending on Intel for the core of his products. Now that’s gone. Intel will still power Macs for the foreseeable future, but now Jobs has a whole new negotiating position with them. And of course, it begs the question: while Intel will probably always have a lead in high end processors, how long until Dell and HP buy small semiconductor manufacturers and do the same as Apple for their low power devices? This is potentially a seismic shift in how the personal computing industry functions.
  • Apple is now officially a media company. iTunes! Apps! Newspapers! Books! Movies! The original strategy with the iTunes Music Store was not to make money from it, but to use it as a “killer app” for the iPod, where the margins are, and also, of course, for lock-in. In fact, Apple has always been a hardware company using software to sell hardware. Apple makes very little to no money on software and cloud apps such as media stores. Is this changing? We all know how Apple at first rejected putting third-party apps on the iPhone and now is embracing the App Store. On the App Store, like on the iTunes store, Apple at first took a 30% cut expecting only to cover the cost of managing the store, but it is turning out that it is a huge business in its own right. Is Apple shifting to a strategy to making money on content delivery? Which leads us to…
  • The iPad is CHEAP. Jobs famously said that Apple didn’t know how to make a piece of consumer electronics under $500 that isn’t a “piece of junk,” and when analysts called Apple’s strategy into question (remember those times? It was a looooong time ago.) he called Apple’s strategy the “BMW strategy”: own the high end through superior engineering and marketing, and make money through fat margins, not big marketshare. The opposite of the Dell strategy, which is why Michael Dell and Steve Jobs openly despise each other, despite everything they have in common: they come at their markets through radically opposite points of view. The iPod was an outlier in that it was both as expensive as a BMW and as widespread as a Toyota, but overall, that was still Apple’s strategy. And now the iPad starts at $499. I’m pretty sure Apple gets fat margins on the upper-end models (there’s not much extra in there to justify the extra hundred dollars), but its margin is probably razor thin at the $499 price point, which is probably going to be the most popular. This is a huge gamble for Apple. First of all, because the iPad could cannibalize its other products where it gets fatter margins, making Apple a victim of its own success. Second of all, because this is a whole new strategy: going for dominance of a new segment instead of just the high end. In fact, I suspect (no way to be sure yet) it might herald Apple turning its strategy on its head: instead of using software as a “loss leader” to sell hardware, using hardware as a “loss leader” for selling digital MEDIA. Again, there’s no way to be sure yet that that’s what Apple is doing, but if this is it, it represents a huge shift in Apple’s strategy, its business and its culture.

Of course, I don’t have to say that if this is Apple’s strategy, and Apple succeeds, this would be bad for open standards and open media delivery. There’s nothing Apple loves more than locked down systems, and you can bet all that media Apple delivers is going to be chock-full of DRM. After all, it’s also the ultimate consumer lock-in. Once you’ve bought all those movies and TV shows on your iPad, you’re going to want to watch them on a big screen, and for that you’re going to have to buy one of those big screen iMacs.

These are interesting times indeed.

(I will now let you return to your originally scheduled iPad coverage: ohmigod it’s so pretty! It doesn’t multitask, Steve Jobs you killed my dreams!)

Steve, go big or go broke

January 21, 2010

Microsoft’s new strategy under chief software architect Ray Ozzie has been “three screens and the cloud,” the three screens being mobile, desktop and living room, and the cloud being Microsoft’s actual cloud infrastructure, Azure, and presumably the web, i.e. Bing, Hotmail, MSN and Microsoft’s other web properties.

How are these doing?

Obviously, Microsoft is still dominant on the desktop, and will remain so for a while now. Even though web apps are a long term threat to Microsoft’s desktop software, at the high end (Macs) and the low end (netbooks), right now they’re safe, because software can still do a lot of things the web can’t do, especially in the enterprise, where Google can’t get a foothold.

In the living room Microsoft has a very strong beachhead with the XBox, which is fast turning into a social multimedia entertainment center, which is how it should be.

In the cloud it’s too early to tell. Amazon is clearly the dominant player in cloud infrastructure, but it’s much too early to tell who will end up with the biggest slice of the pie, and Microsoft seems to be doing the right moves so far.

When it comes to mobile and web, though, Microsoft is foundering.

Bing is a strong effort, and has been picking up marketshare (largely through deals and not organic growth, though), and if and when Bing becomes Yahoo!’s search engine, that should give them enough scale to really refine their product. Microsoft’s search leader, Qi Lu, is a scarily talented executive. That being said, so far, it’s practically impossible for Bing to present a credible threat to Google search. It is marginally better in some respects, but in order for people to change their entrenched habits, you need more than marginally better. You need remarkably better. And Bing isn’t that, by a long shot.

Meanwhile, in mobile, it’s a disaster. Windows Mobile 7 is a long ways off. Even if it’s a tremendous product  — and while it will probably be better than previous efforts, it almost certainly won’t be as good as Android or OS X — mobile OSes are a platform game. To win in mobile, Microsoft needs tons and tons of apps — developers, developers, developers — and for that it is very, very late to the party. Plus, how does it make money from mobile? Apple makes money on hardware. Meanwhile, Android is free — in fact, less than free: Google offers revenue share on advertising revenue to mobile operators who use Android. Microsoft wants to charge Verizon to put Windows Mobile on its phone, meanwhile Google is paying them to use a  product that is so far superior, and by now proven.

My point is this: these are two crucial markets where Microsoft can’t win through incremental improvements. It must go big or go broke. In search, it must introduce a new paradigm — so far the most promising looks to be what Mahalo is doing. In mobile, some have recommended that Microsoft buy RIM. The two have tremendous synergies from their strength in the enterprise and BlackBerry’s software. That would be a start. In fact, they should also buy Palm, which is struggling in the market, but has better software and hardware and more apps.

I have a few ideas on how precisely Microsoft can win in search and mobile, but they’re beyond the scope of this post. The point here is: Microsoft must go big or go broke. The only thing they have left is their huge size. They should use it.