Less than a year after the iPhone OS 2.0 made it possible for developers to write native apps for the iPhone, Apple has released a major new upgrade of the iPhone OS and software suite. iPhone OS 3.0 provides developers with a significant collection of enhancements to the iPhone SDK that enable many new capabilities and even new categories of applications. In addition, they allow the creation of completely new business and economic models for generating revenue with iPhone apps.
Apple’s long-awaited push notification service has finally arrived. All the apps on the phone now use a single shared connection to Apple’s push service, which developers can connect to and use to push messages to the device. A notification can consist of a red badge on the app’s icon, sound playback, and/or a text message. This opens up the possibility of implementing applications in everything from instant messaging and notification services to real-time news and business intelligence alerting. And to alleviate concerns that many had about being overwhelmed by too many messages, users will have the option of turning on/off notifications (sounds, alerts, or badges) on an app-by-app basis.
From a purely economic standpoint, the in-app feature could change the entire landscape of iPhone app creation. Rather than relying on the initial purchase price only—which for most apps has been a rush to the rock-bottom price of $0.99—developers can now create apps that incorporate alternative business models, including subscriptions and incremental purchases from within an app. Many current apps have attempted to do this by requiring a subscription to an external service, but the enhancements made to the 3.0 OS will dramatically simplify the user experience of subscribing and paying for that subscription.
Additionally, 3.0 enables the creation of apps that can be shipped with certain features or content disabled; only by agreeing to pay extra can that functionality be used. Think of a game that you play for a while, get hooked on, and then run out of lives. Then a message appears in the nick of time, offering you a better gun/car/airplane. How many users could resist paying a small fee—on complete impulse—to keep going? The sky’s the limit here, and I’m sure many fortunes will be created as ongoing in-app revenue surpasses the revenue coming from initial app sales.
Multiplayer games and data sharing with other nearby iPhone/iPod touch devices are now possible with the new peer-to-peer capabilities and APIs. The connectivity uses the Bonjour protocol for the identification of other devices over Wi-Fi or Bluetooth. It actually makes it quite easy for developers to write apps that locate and communicate with nearby devices.
Hardware accessory integration
By opening the hardware interface to app developers, there are three new categories of products that can be created: standalone apps that talk to accessories, accessories that require apps for user interaction, and combination hardware/software solutions where the value is from the combination of app and accessory. Examples include alarm clocks without any buttons (where all the settings are configured from an iPhone or iPod touch in an app) to a treadmill that integrates your playlist with your workout all while monitoring your heart rate.
This capability will be extremely appealing to the enterprise, allowing for the creation of barcode scanners and magnetic strip readers that can scan products, capture credit card information, and send the data to the iPhone or iPod touch. (With a truly usable mobile Point-of-Sale terminal like this, maybe Apple will finally replace the Windows-powered handhelds used in the Apple Stores with Apple devices.) Unfortunately, even though this does support both wired and wireless accessories using Bluetooth, it isn’t compatible with every Bluetooth device because Apple requires that each accessory be certified by them.
Previously, if a third-party app wanted to take advantage of the Maps and Routing functionality, it had to close down in order to launch the Maps app. Unfortunately, this created a poor user experience in many cases. With OS 3.0, developers can now improve app usability by embedding the mapping and routing functionality directly into the application. (Because of content licensing requirements, developers will have to provide their own mapping data for navigation and routing.) Add to that the new magnetic compass in the iPhone 3G S, and developers now have the tools they need to create some incredible location-based apps.
Listening to developers
In addition to all of these enhancements, the iPhone OS 3.0 has hundreds of smaller, but still significant improvements. And while some asked-for enhancements were missing—like the ability to run apps in the background and access “sandboxed” data—it is obvious that Apple is listening to the market and to feedback from the developer community.
The original iPhone SDK has surpassed one million downloads, and the App Store continues to grow dramatically with over 50,000 apps currently listed—the momentum within the ecosystem shows no signs of slowing. As long as Apple continues implementing what the developers need to create killer apps and profitable business models, Apple’s competitors will struggle to challenge the iPhone’s dominance in the mobile software marketplace.