Tempering iPhone's Frenzied 'Irrational Exuberance'

cracked iphoneNot everyone has succumbed to iPhone idolatry -- even in the wake of Apple unveiling the faster, smarter new 3GS and the $99 3G this week. Patrick Moorhead, director of emerging media at Razorfish, has taken on the job of tempering the "irrational exuberance" that's evolved around iPhone apps in particular.

"I have a conservative position on this," acknowledges Moorhead in an interview while in New York for the Advertising 2.0 conference. Like others in his postion, he's been deluged with clients in the last year who previously may have had little or no interest in mobile marketing but suddenly need to have their own branded iPhone app.

Moorhead's skepticism stems mainly from two factors: the small iPhone user base relative to the overall mobile phone population and the ever rising number of apps in the App Store. By investing in an app, marketers are trying to reach an audience of iPhone owners that makes up less than 5% of the roughly 300 million total U.S. mobile users.

And with the number of iPhone apps-50,000 and counting-growing faster than iPhone sales, it becomes increasingly difficult for new entrants to get noticed let alone hit the App Store's top 10 list. Worse, the typical lifespan of a downloaded app is only a couple of weeks before users move on to the next cool new offering. "You're chance of success is very slim," said Moorhead.

Instead, he often recommends clients spend the same $100,000 (not including marketing costs) or more on building a decent WAP site that will reach a far larger potential audience than an iPhone app. If an estimated 8% to 10% of clients' Web traffic is coming via mobile devices, it's important they offer a mobile-optimized site, he said.

Apple would be quick to point out, as it did during its developer conference Monday, that 65% of all mobile Web usage is generated by the iPhone alone. Moorhead allowed the iPhone's overrepresentation in Web browsing but noted that it still reflects only some 10 million U.S. iPhone users. Sporting a Nokia, Moorhead, fittingly, doesn't appear to be among them.

4 comments about "Tempering iPhone's Frenzied 'Irrational Exuberance' ".
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  1. Tamara Gruber from Crisp Wireless, June 12, 2009 at 11:04 a.m.

    Our team at Crisp Wireless couldn't agree more. Sometimes apps make sense but discoverability and cross-platform support are big drawbacks. We recently posted a blog about when you need a mobile app vs mobile website or both.

  2. Kevin Planovsky from Vert, June 12, 2009 at 2:24 p.m.

    Ditto from the team here at Vert Mobile... with the emergence of HTML 5.0 and more robust mobile browsers (some including location awareness like iPhone 3.0) it is time to invest in the mobile web. However, we can do it for tens of thousands less than $100,000... don't throw your money away...


  3. Josh Copeland, June 16, 2009 at 12:12 p.m.

    I partially disagree with Moorhead's point of view. Granted, he's taking a conservative stance but I still believe that iPhone applications with well-defined objectives that serve a real purpose can provide tangible value to consumers that want it.

    Unfortunately most marketers want to shotgun an app to match a campaign when the nature of a truly useful app is to provide resources to people on a regular basis.

    That said - I agree with Kevin that HTML5 browsers on more smartphones (Pre, G1, iPhone) should drive more website investment and innovation than basic app development. All told - very exciting innovations on the horizon...

  4. Todd Ziaja, June 17, 2009 at 12:51 p.m.

    I agree with Josh and Patrick. People want access to robust content on the go, specificaly on the just needs to make sense for them, be part of a larger strategic push, and have the support of offline media to be successful...think Chase, National City and State Farm—although the "success" is still a question mark. Also, if your market, or a segment of your market, is the "early adopter" group, then the latest and greatest channel makes sense at least as a pilot. And, let's not forget that just doing something in the iPhone app space has inherent, perceived PR value.

    But if reach/frequency of your message/service trumps the above, and for most it does, spending your dollars on expanding your WAP presence is sound counsel.

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