Extent of App Store success surprised Apple executives

Mon, Dec 21, 2009


The scope and depth of the iTunes App Store is astonishing, with well over 100,000 apps that have generated more than 2 billion downloads to date.  But when the app store first opened up for business in July of 2008, no one could have predicted just how successful it was going to be – and that even includes Apple.

Writing for the Financial Times, Joseph Menn takes an in-depth look at the unparalleled rise of the app store, and how its success caught everyone off guard.

“We had no idea there would be 2bn downloads by October,” says Kleiner Perkins partner Matt Murphy, manager of the then $100m fund. “Most people within Apple, if you had told them it would be a fifth of that by now, they would have been pretty happy.”

And on a somewhat related note, remember that it wasn’t too long ago that carriers exerted strict control over what types of apps could run on which phones, and part of the genius of the iTunes App Store was that it completely did away with that archaic business model.

Even more important was Mr Jobs’ willingness to demand that AT&T and other network carriers give up control over what sorts of programmes could operate over their airwaves.

He argued that the iPhone was a computer, not a phone, and that consumers expected to be able to do many things with computers.

History had shown that this kind of freedom was what drove the more profitable “ecosystems” of computers – where sales of hardware were dependent on a wide variety of useable software.

As competitors continue to churn out hardware in an attempt to dethrone the iPhone, the iTunes App Store is really Apple’s ace in the hole.



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