never dreamed of becoming a high-tech Silicon Valley entrepreneur. He's
an assistant professor at Stanford, a specialist in computer science
and music whose biggest passion has been organizing nerdy "laptop
orchestras" comprising 20 people each "playing" a notebook computer.
But last summer his friend Jeff Smith—who'd
run two successful high-tech companies before dropping out of the
corporate world to take music classes at Stanford—talked Wang into
trying to create applications for Apple's iPhone.
Smith and two others put up some seed money, and Wang, 31, set to work
with a handful of engineers. They called the company Smule, and created
four applications, priced at a buck apiece. There's a virtual lighter,
a virtual firecracker, a voice changer that can make you sound like
anything from Darth Vader or an elf on helium, and the big winner of
the bunch—a program called Ocarina that turns the iPhone into an
electronic wind instrument. Released in November, Ocarina racked up
400,000 downloads in less than a month. Smule, which originally set a
goal of taking in $100,000 in revenue this year, instead will end up
making closer to $1 million. "It's amazing," Smith says. "The business
is already profitable."
Wang and Smith are riding the
latest phenomenon to sweep across the tech industry. Thousands of
people are writing applications for the iPhone and selling them through
App Store, which is part of the iTunes online market. Apple launched
the App Store in July and has already delivered more than 300 million
downloads of more than 10,000 applications (some choice samples: a free
Bloomberg stock-market terminal, and a 99-cent "iBeer" that sloshes
around when you tilt the phone). "We've never seen anything like this
in our careers," Apple CEO Steve Jobs told Wall Street analysts on an
earnings conference call in October.
the first iPhone in June 2007 and followed up in July of this year with
a 3G model that offers faster data-transfer speeds. Apple has sold 13
million iPhones, and in the third quarter of this year sold more units
than Research in Motion, maker of the BlackBerry. In terms of revenue,
Apple claims now to be the third-biggest mobile-phone maker in the
world, after Nokia and Samsung.
won't say how much money the App Store is taking in, nor will it say
how many of the 300 million downloads were free apps and how many were
apps that cost money (most apps are free; the others cost anywhere from
a buck to $10). Apple gets a 30 percent cut of any revenue generated by
apps. But for Apple right now the money isn't the point. The big thing
is the race to become the dominant mobile-computing platform, the way
IBM-standard PCs running Microsoft operating software—first DOS and
then Windows—came to dominate personal computing in the 1980s and early
1990s. The mobile-computing space looks a bit like the early days of
personal computers, when different operating systems were competing to
be king. A half-dozen smartphone platforms compete in the market,
including Symbian (used by Nokia), Windows Mobile, the BlackBerry and
Google's Android. Yet another is on the way from Palm, maker of the
Palm Pilot and the Palm Treo. Next year Palm will introduce an entirely
new operating-system platform for mobile computing. Whichever platform
draws the most developers will likely rule the market. Right now "it's
a 100-yard dash and Apple is already 75 yards down the track while the
other guys are still trying to get out of the blocks," says Ken
Dulaney, analyst at researcher Gartner in San Jose.
the fun of owning an iPhone is trying out all the cool new apps you can
put on it, and developers are cranking things out at a feverish pace.
"It's kind of a gold rush," says Brian Greenstone,
who runs a tiny outfit (it's just him and a few freelancers) called
Pangea Software in Austin, Texas, that has created several hit games
for the iPhone, including Cro-Mag Rally and Enigmo. Greenstone, 41, has
been writing games for Apple's computers for 21 years. But he says he's
never seen anything like the iPhone apps phenomenon, which this year
will deliver $5 million in revenue for him. "It's crazy. It's like
lottery money. In the last four and a half months we've made as much
money off the retail sales of iPhone apps as we've made with retail
sales of all of the apps that we've made in the past 21
years—combined." Business is so good that Greenstone won't even bother
writing for the Mac anymore. Besides, Greenstone says, iPhone apps are
easy to create: some get cranked out in just two weeks by a single
developer. "Some kid in his bedroom can literally make a million bucks
just by writing a little app," Greenstone says.
Demeter, a 30-year-old programmer, built an iPhone game called Trism in
his spare time, working nights and weekends. By the end of September
he'd earned $250,000 in just two months. He's made more money since,
but won't say how much. But it's enough that he's quit his job at Wells
Fargo bank, where he was writing code for ATMs, and he has hired five
engineers to develop a slew of new iPhone games. "We might get funded.
We might get acquired. There's a lot of things on the table," he says.
"My life is very different than a year ago." Where things will be a
year from now is anyone's guess. But for now, the little guys are happy
to be riding on Apple's coattails.