There is an incredible amount of buzz surrounding the launch of the iPhone app store today. You walk around University Ave. in Palo Alto, CA and it sounds like everyone is building an iPhone app… Before you had out and build one for yourself, here are some things to remember:

• Watch the numbers– Apple is hoping to ship 10-12 million iphones this year. This is 1% of the total estimated phones shipments this year. When compared to the total number of phones in the world (3.3 billions), the share is even smaller. If your success rely on mass penetration, go look elsewhere.
• Ignore the numbers- large numbers are only part of marketing. Relevant numbers are as important. The iphone user group is small but very homogeneous, which creates limitless opportunities for the right application. With bunch of educated, urban and early adopters carrying iPhones with them, applications like social networks, sophisticated games, travel related apps and other cutting edge products can thrive. Density over size can be a winner in this case.
• Remember App Exchange– When Salesforce.com launched AppEx software developers were psyched.  After years of one by one hunting of the big guys customers (Oracle, SAP etc), they were offered with a marketplace were SFDC customers could browse, test and buy great complementary applications. Couple of years later many say that AppEx yielded limited results and many partners admit they expected much more out of this channel. Not enough SFDC customers proactively searched for a solution and ISVs needed to invest in sales and marketing to get to SFDC customers, just like they did before with the traditional on premise software.
• Forget App Exchange- while similar, iPhone app store has some meaningful advantages:
  • Each iPhone user is an individual consumer with full purchase decision rights (unlike SFDC business users that can not buy IT on their own in most cases)
  • iPhone store will be a great place to kill 10 minutes waiting for say, check in to a flight. With no new e-mails and few minutes to spare, many apps will be purchased out of boredom.
  • iPhone apps are cheap- with most apps cost less than $10, the decision to buy one will be simple and in many cases, irrational. No business app is bought this way.
• Don’t get lost- people, contrary to common belief, are reactive creatures. There are already 500 applications in iphone app store and the number will grow every minute. In just few hours the top paid app got as many as 1800 downloads. Don’t rely on people browsing for your app- make sure it is viral, invest in getting the best reviews and don’t forget that there are no free meals- you still have to invest in marketing, PR and business development to get customers’ attention.
• Don’t launch just because you can- Apple made it very easy to create and sell an iPhone app. It will lead to many low quality applications, developed by amateurs. While you can think of an app today and release it before the month ends, don’t do it. Plan it, QA it, beta test it and make sure it is good before it is out. iPhone app store will form a community of users and communities have long collective memory…

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