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Summary:

It has been widely reported that iPhone owners use data connections to surf the Internet more often than people whose smartphones have built-in browsers do. Now the very same dynamics are working their magic on all those applications that were made available on the iTunes App Store. Get ready to see the iPhone bump. Continue Reading.

It has been widely reported that iPhone owners use data connections to surf the Internet more often than people whose smartphones have built-in browsers do. Indeed, flat-rate data plans, a bigger screen, a near-desktop quality web browser along with the ability to connect to multiple networks (3G and Wi-Fi) are all contributing to the heavy Internet usage on the part of iPhone owners.

Now the very same dynamics are working their magic on all those applications that were made available on the iTunes App Store in July alongside the launch of the 3G iPhone. Demand for iPhone apps is so great that their makers are getting what could be called an “iPhone bump” — where the release of an iPhone application boosts the fortunes of a mobile application maker overall. The impact is going to be even more pronounced for mobile software makers that had previously been selling to other platforms.

This realization came on the heels of a long conversation with Andrew Fisher, chief executive officer of Shazam, a London-based mobile music software maker that’s a little over four years old. That’s how long it took get his music recognition application into the hands of some 20 million mobile users in 60 countries.

The software lets you hold up the phone to a radio to have it figure out which song is playing; it then helps you get the track from one of the music download stores. On average, the app was getting used between three and five times over the life of a cell phone.

Then came the iPhone. In the 10 weeks since the app has been available for the iPhone platform via the iTunes’ App Store, it’s been downloaded 1.5 million times. The result has been some 20 million “calls” from the app to Shazam’s servers — indicating that people were using it to look up between two and three songs every week.

Shazam experienced an iPhone bump. To be sure, Shazam is not alone. An increasing number of startups are seeing a sharp rise in their user base due to the iPhone. Take for example fellow London-based startup Truphone, maker of mobile VoIP services. Since 2006, it’s been offering up a way to place cheap long distance calls using the Wi-Fi network instead of more expensive mobile minutes.

When I spoke with Truphone’s chief technology officer, Alistair Campbell, last week, he told me that Truphone for iPhone now accounts for about one-half of the total number of Truphone users. And while he wouldn’t disclose the total number of downloads, he did say that the company is focusing more of its resources on Apple’s platform.

That’s probably a good idea. Shazam’s Fisher, a veteran of the mobile industry, thinks there’s a larger strategic implication of the iPhone bump: A bigger installed base that is more engaged with the device means that now companies such as his can take the concept of mobile advertising more seriously and think of it as a relevant revenue stream.

AdMob, a mobile advertising company based in San Mateo, Calif., is already seeing a big jump in the number of ads it is serving on the iPhone – about 103 million in September vs. just 35 million in August Apple’s iPhone is already the fourth most-used device through which AdMob’s ads are accessed in some form or the other – a good proxy for application developers. And perhaps an indication of where companies will be looking to place their ads throughout the economic downturn.

This story also appeared on Businessweek.com.

  1. HTC Touch is another device people love to use to surf web sites. The only reason I’m not getting Iphone is that it’s from Apple and it runs OS X. Hard to get out of WINMO world :) + I have an unlimited data plan and pay $7 a month.

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  2. It truly is amazing the level of interest in iPhone apps. Most of the credit is due to Apple in how elegant and easy the App Store makes it for any end user to download/upgrade their apps. Just as an example, I work for Ifbyphone, which released the Voice Broadcast app. It was a tremendous success for us for both new sign ups, as well as helping market our company name.

    I think it will be most interesting in the coming months to see how Apple controls the App Store. How do you keep developers engaged in your platform while at the same time prevent end users from becoming overwhelmed in the number of apps that continue to be added all the time?

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  3. Got my IPhone 3G three days ago and absolutely LOVE it!

    Jiff
    http://www.privacy-center.be.tc

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  4. [...] this application and has also integrated with Shazam, a London-based music discovery start-up that I wrote about earlier this week. Facebook, however, has no plans to release its app for the Android platform. Atleast for now. No [...]

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  5. i’m still a 1st Gen iPhone user who only downloads free applications (unemployed since june) although i don’t get the benefits that 3G iPhone users get with their apps, i have to say that i couldn’t go a long period of time without netnewswire, evernote, air sharing and many games on the iPhone. now if only i had a 3G, i could look up recipes WHILE grocery shopping :P

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  6. [...] Apple says that in 102 days since the iPhone Apps store opened, nearly 200 million iPhone apps have been downloaded. There are about 5500 apps available on the iPhone Apps store. Follow iPhone Apps on our TheAppleBlog. (Related story: What about that iPhone Bump?) [...]

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  7. [...] according to Apple Insider, the App Store may still be climbing faster than iTunes Music did, GigaOm is pishing the posh on the iPhone bump in [...]

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  8. [...] according to Apple Insider, the App Store may still be climbing faster than iTunes Music did, GigaOm is pishing the posh on the iPhone bump in [...]

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  9. [...] according to Apple Insider, the App Store may still be climbing faster than iTunes Music did, GigaOm is pishing the posh on the iPhone bump in [...]

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  10. [...] according to Apple Insider, the App Store may still be climbing faster than iTunes Music did, GigaOm is pishing the posh on the iPhone bump in [...]

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