iPhone in 2010: Mobile Commerce, Social Networking Star

The App Store and the iPhone really grew up last year, setting the stage for even bigger things to come this year. Expect social networking to become a key part of the iPhone experience, big new app players, and the start of a mobile commerce tidal wave.

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Apple's App Store is fast becoming the social hub of the mobile world, where we chat and play games with friends, catch movie trailers, shop for everyday things and even get a little work done.

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Call it a coming of age. The App Store, in its adolescent years, had its share of silly games and apps. Last year was a turning point as social networking apps became equally popular on the PC and iPhone. The iPhone's popularity should attract big brands and a sense of seriousness this year, analysts say.

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Last year, some of the most popular new apps were social networking ones like Facebook and Twitter clients. "This year, the largest trend will be social networks around applications," says Krishna Subramanian, founder of Mobclix, an operator of a mobile ad exchange marketplace.

Consider NGmoco, which has built a network for game developers for the iPhone. App developers can plug into the network and gain instant access to a horde of iPhone gamers; and gamers on the NGmoco network can see what games their friends are playing. All of this drives leader board watching, high scores and, of course, usage of the apps themselves.

Social networking games like Mafia Wars on the iPhone are poised for big growth this year, too, says Subramanian. The iPhone has proven itself as a great social networking platform, he says, citing a study whereby an average iPhone session runs an hour.

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2010: Mobile Money

Some analysts say that this year will also be the year of the start of a mobile commerce tidal wave. Market researcher Gartner predicts mobile app revenue will hit $6.7 billion this year, up from $4.2 billion last year — and the trend will continue to almost $30 billion in 2013. "Games remain the No. 1 application, and mobile shopping, social networking, utilities and productivity tools continue to grow and attract increasing amounts of money," said Stephanie Baghdassarian, researcher at Gartner.

One of the reasons for the money train: slow moving, big brands are finally realizing that the iPhone is a real platform for reaching customers. "Last year has really awoken big brands to deliver an iPhone app," says Subramanian. "We're starting to see a lot more movie studies starting to advertise in the iPhone space."

Games and movies aren't the only kind of apps evolving. "You'll start to see apps that really bring enterprise software to the mobile phone, as well as more conference calling and video chatting," says Subramanian.

According to Gartner, the top 10 mobile consumer app areas for 2012 will be: money transfer, location-based services, mobile search, mobile browsing, mobile health monitoring, mobile payment, near-field communication services, mobile advertising, mobile instant messaging, and mobile music.

2009 By The Numbers

Here's a look back at some of the highlights of 2009, according to Mobclix surveys and research:

1. Social network apps like Facebook and Twitter clients rose in popularity. "The volume of downloads surprised mobile ad networks," Subramanian says.

2. Overall, users downloaded more than three billion applications. More than 130,000 apps were available (and four out of five apps were not free).

3. Games and entertainment were still the most popular categories in terms of most number of apps, downloads and usage, with role playing games the most popular by far. Also, role playing games had one of the highest average file sizes at a little more than 25 MB.

4. Emerging categories such as health and fitness, medical apps and references, enjoyed success out of the gate and even drew some of the highest average category prices. Reference titles, for instance, led all apps with nearly a $9 average price.

5. The iPhone as a gaming platform really evolved last year, as marquee developers delivered more sophisticated games. "We saw a huge shift toward premium games," Subramanian says.

As for negative surprises in 2009, a number of iPhone app categories didn't really take off, says Subramanian. Among them: file sharing apps, voice-activated apps, fast-food restaurant apps, and international calling apps. "There just wasn't enough awareness," he says.

Tom Kaneshige is a senior writer for CIO.com in Silicon Valley. Send him an e-mail at tkaneshige@cio.com. Or follow him on Twitter @kaneshige. Follow everything from CIO.com on Twitter @CIOonline.

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