Mobile Apps' Brush with Greatness

The success of iPhone app Brushes demonstrates the huge potential of selling software applications for wireless devices

By Arik Hesseldahl and Peter Burrows

The idea for this story came from BusinessWeek reader Anne Baker, CEO and founder of Blue Creek Marketing in Seattle.

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To the iPhone's extensive résumé, add magazine cover illustration. Artist Jorge Colombo recently drew widespread attention for creating the image for The New Yorker's June 1 cover on an iPhone using Brushes, a $3.99 mobile application.

Brushes was designed by Steve Sprang, a 32-year-old programmer who lives in Mountain View, Calif. Brushes simulates the experience of painting on the iPhone screen. Users select from a set of brushes and paint colors using their fingers directly on the screen. It is an application that he wanted to use himself: "I like computer graphics and I like creative tools, so Brushes was definitely an app that I wanted to use myself," Sprang wrote in an e-mail. "I expected it to appeal to others as well. I think a painting app is a natural fit for the iPhone."

He was right about that. More than 50,000 iPhone owners have downloaded it from Apple's (AAPL) iTunes Store since Sprang released it in August 2008, and the pace quickened with publicity from The New Yorker cover. Under Apple's rules, Sprang gets $2.80, or 70%, of each purchase, meaning Brushes has earned him about $140,000 before taxes.

Apple Leads the Way

There is, as Sprang's experience proves, money to be made selling software applications for the iPhone and other wireless devices. Apple's iTunes Store has led the way, providing the official channel for software that runs not only on the 21.2 million iPhones it has sold, but also an additional 16 million iPod Touch devices. In less than a year of sales, Apple has reported more than a billion downloads overall. Some apps are free, while many cost 99¢ to $9.99—and higher. The most expensive iPhone app, IraPro, at $899.99, is a remote surveillance controller for businesses.

And while Apple has led the way by distributing applications it approves via iTunes, wireless rivals have followed Apple's model. Phones running Google's (GOOG) Android operating system get their applications from the Android Market. BlackBerry maker Research In Motion (RIMM) has since Apr. 1 operated its own application store known as App World, and Finland's Nokia (NOK), the company behind the Symbian smartphone platform, has gotten into the act with the May 26 launch of its Ovi application store. Sony Ericsson (SNE/ERIC) was the latest, announcing June 3 it will also market wireless apps.

Many applications are games. The wireless unit of game developer Electronic Arts (ERTS) reported $189 million in revenue in its 2009 fiscal year ended Mar. 31, up from $142 million in fiscal 2007 and $152 million in 2008. Another wireless gaming concern is Palo Alto (Calif.)-based Tapulous, which makes the Tap Tap Revenge game for the iPhone. Consumers have installed the game, which requires clicking on moving lights to the beat of a particular song, more than 10 million times. It's one of the apps that has been most consistently among the leaders in terms of downloads, along with Pandora and Facebook. Nearly a third of all iPhones and iPod Touches have the game installed. And while the vast majority of those were downloaded for free, some 300,000 or so customers paid $5 for a premium version that comes with preloaded music. Tapulous CEO Bart Decrem says the game is played more than a million times per day.

Tapulous is becoming a bit of a marketing force in the music industry. Tapulous' best-selling paid app, Tap Tap Dance, has sold more than 150,000 copies. "That would be pretty decent success for an album these days," Decrem says. And each week Tapulous gives away a song-of-the-week to work with the app. In a good week, more than 500,000 people download it. Next week, the company plans to announce a deal with Universal Music Group to collaborate on a new game. Universal also will open more of its music catalog for use with Tap Tap Revenge.

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