The following column was originally published in The National in the Business section, May 1, 2009:

Apple’s iPhone may be popular with consumers, but for software developers it has been a dream come true.

Nine months after Apple began to sell applications to iPhone and iPod Touch users through its iTunes App Store, the company announced that it surpassed the one billion download mark last week.

While it is unlikely the 13-year-old from a small town in Connecticut, who has been announced as the lucky billionth downloader, fully appreciates the significance of the honour, the accomplishment confirms what many -analysts have been saying for the past few years: the mobile phone market has made the device the computing platform of the future.

Although the mobile application is not a new concept – the beleaguered handset maker Palm largely popularised it with its PDA devices several years ago – it was Apple that perfected it.

There are more than 35,000 free and paid applications available in the iTunes App Store, and 37 million iPhone and iPod Touch devices have been sold globally.
“We believe the App Store … is more evidence of what we have always said: that software is a key ingredient for a great mobile experience,” Peter Oppenheimer, the chief financial officer at Apple, said while announcing the company’s quarterly results last week.

Much of the reason behind the success of Apple’s business model is the ease of use in making a mobile phone application, compared with a desktop or web programme.

Because of the amount of memory each mobile device can hold, mobile phone-based applications are generally designed to be small, requiring less manpower than desktop applications.

The size does offer some limits as to how much functionality each programme can have, but based on last week’s news, smaller is sometimes better.

Many programs on the iTunes App Store sell for between US$0.99 and $9.99, with the average cost about $3, but the majority are offered for free.

The popularity of mobile phone applications has also resonated with the advertising industry, with mobile developers already commanding between $0.50 to $2 for each 1,000 advertising impressions in a market that is expected to hit $12 billion (Dh44.07bn) by 2013, compared with about $1.7bn this year, according to the research company Informa Telecoms & -Media.

The success of the Apple store has awoken the company’s smartphone competitors. Research in Motion (RIM), Google and Nokia have all created their own version of the application store, each with features to lure customers.

The UAE’s telecoms market leader, Etisalat, has partnered with RIM and Nokia to bring their distribution platforms to the country, but has not announced specific dates for that happening.

Apple charges a 30 per cent take on each paid download and, although it does not publicly provide figures as to how much it has made hosting the applications, many iPhone developers have seen their fortunes change overnight.

Last autumn, Steve Demeter, the developer of Trism, earned $250,000 in the first two months, while Ethan Nicholas, a Sun Microsystems engineer, quit his job after his iShoot game sold $600,000 worth of copies in January.

Electronic Arts, one of the largest software companies in the world, recently said it would focus a significant amount of developmental work on putting its popular games on to the iPhone. Many others are doing the same.

The attraction of becoming a successful software developer with relative ease has begun to trickle its way to the Middle East.

SpinBits, a Dubai-based internet consultancy, was the first local company to launch its own iPhone application that links to its real estate website, www.restate.ae, with some initial success.

The iPhone buzz has also reached local educators. The Khalifa University of Science, Technology and Research announced a mobile application contest among 24 teams from the institute’s computer engineering faculty, and will reveal the winners in Abu Dhabi on May 9.

The applications are said to meet the criteria of being original and culturally focused, an effort to push Arabic-language content into a market traditionally dominated by the West.

With such local development gaining attention and hopefully reputation, it should be no surprise to learn that several early-stage venture capital funds are being launched in the GCC area.

Bayt, which operates the region’s largest online job site, began soliciting requests from entrepreneurs interested in receiving capital and mentoring from its Intilaq fund this past month, while Jordan-based Arab Seed Ventures, a fund backed by leading Arab technologists who have found success in America’s Silicon Valley, will open later this year.

Those funds, along with experienced players such as EFG-Hermes’s Technology Development Fund and KuvCapital, might want to look at what some mobile-centred venture capital resources – like the BlackBerry Partners Fund, and Kleiner Perkins Caufield and Byers’s iFund – have done in the market and tap into the potential of what a mobile phone application can do.

The beauty of developing such software is that you don’t need millions of dollars.

Many programmers have clearly shown that a few weeks holed up coding in a darkened basement can result in a successful product.

Venture capital can, and should, be used to make good applications great and provide valuable business expertise to independent developers to take their business from six-figure profits to a successful initial public offering.

While the web itself presents a wide range of opportunities for local software entrepreneurs, it is those who are able to take advantage of opportunities during the recession who will prosper in the future.

With the rise in smartphone sales in the area, a dearth of Arabic-based mobile applications in the region and low development costs, the decision to start making your own mobile phone applications may have never been easier.