Two tech trends have emerged as unstoppable in recent years: The growing reliance on smartphones for most of our day-to-day computer needs, and software as a service, the idea that you can deliver software over the Web and charge for the service rather than a copy of the application’s code.
So what do you get when those two forces collide? A crop of Santa Barbara-based software startups testing out new ways to make money off of applications for Apple’s iPhone.
iPhone application developers Zuujit, SBClick and Phone Halo have business models that take advantage of the iPhone’s popularity and neat hardware. But they don’t depend solely on selling copies of their programs to make a profit. Instead, they plan to draw revenue from fees on eBay sales, contributions from markerters and even hardware that helps prevent users from losing that fancy new mobile phone. And any of the three companies could go big. Mobile apps are still the Wild West, akin to the early days of home PCs or the first stages of the Internet, where user tastes and winning business models emerged and solidified in tandem.