iPhone App Developer Speaks

Sam Gustin sees a sign of the times.

Six months ago, Greg Yardley was a project manager at Yahoo, where he worked on the company's advertising platform. Today, he is the co-founder and chief executive of Pinch Media, a New York-based startup which provides services to iPhone developers. Pinch Media recently closed its first round of venture capital from Union Square Ventures and other investors.

On the eve of the launch of the iPhone 3G, I caught up with Yardley for his views on the new iPhone App store; how apps are going to make money; and his advice for Jerry Yang.

Tech Observer: How would you gauge the level of enthusiasm in the iPhone developer community?

Yardley: It's huge. There are tons of people working on interesting projects, and I think the 552 applications that were out the door this morning are really just the tip of the iceberg. And this is just the first iteration, so we're going to see these things get better and slicker, and there are going to be a lot more of them. I really think the best minds in the Mac development community are working full-steam on interesting iPhone applications.

Tech Observer: How big is the potential market for iPhone applications?

Yardley: The question isn't so much how big is the market for iPhone applications, it's how big is the market for mobile applications. The iPhone is a force for change. It's a beautiful thing. It's shaken up the entire mobile marketplace. I think the iPhone, just based on the strength of the App Store, is going to get a lot of market share. I think we'll easily have millions and millions of users within the United States on the iPhone alone. And I think that worldwide, Apple is really going to blow out their sales numbers.

Tech Observer: Do you think the App Store is actually more important, or more newsworthy, than the actual new iPhone model itself, as David Pogue suggested the other day?

Yardley: I agree with that somewhat. First of all, don't underestimate the vast reduction in the upfront price. Yes, I've heard that it costs a lot more to own and operate an iPhone just because the price plans have increased, but dropping that thing down to $199 is removing a big psychological barrier that I think will drive a lot more people to get one. It's just a lot less upfront. So that's very, very big. 3G is very, very big, if you're in a location where you can access it. But, I do think the App Store is extremely important, and I think it's as least as important as those two other factors, if not more.

Tech Observer: How are iPhone applications going to make money?

Yardley: Paid downloads right now are the dominant way that developers are going to make money. There are other ways to make money with an application. But the market is still very, very young, and we still need to be very, very careful. The iPhone is a beautifully designed device, and it would be a shame if advertising [on the iPhone] became like a lot of the Flash, interactive, interruptive, crap ads we see on the Web, quite frankly. If that happens, we've failed. I know some ad agencies aren't going to like this, but quite frankly, we have to keep the interests of the user and developer in mind.

Tech Observer: Before I let you go, I would be remiss if I didn't ask you, a former Yahoo employee, if you have any words of wisdom for Jerry Yang.

Yardley: (laughs) If I had any advice for Jerry Yang, it would be that business is a marathon and not a sprint, so keep your head down, focus on executing, focus on getting product out the door, and good things will happen. That's our philosophy, and as far as I'm concerned it should be his as well.