[Germany] The iPhone’s App Store Bonanza is over. Not only have most sellers failed to turn a profit, many come nowhere near recouping their investment at all. And for non US companies it’s even more difficult to make a buck since they have to wait even longer to get their iPhone software approved for the strong-selling US App Store.
That’s why the small startup Mobilinga, from Bremen, which already took the number 1 spot for the most downloaded software in the German App Store, is happy that their programs can now be downloaded in the US and Canada too. For $2.99 the Germans teach how to speak Latin-American Spanish, French, German and Italian with their “mobilinga for Your Trip” line.
Each learning application contains 1,000 sentences from different areas of life such as shopping, hotels or restaurants. The user can choose phrases from individual categories or use the learning function with its virtual tab system, which saves the progress you have made. There is a recording of every sentence which can be played out loud. This means that your cell phone can also help, when needed, to ask for the bill or for directions, making the iPhone both a practical traveling companion and language teacher at the same time.
The 1.5 year old company with no VC is cash flow positive, says CEO Matthias Kose who keeps expenditures low. It helps that Mobilinga has only two employees and relies on freelancers if necessary, but every new app sees between 10,000 and 20,000 monthly downloads. That’s quite impressive for a company that only catered to the German market until now. Only 19 percent of iPhone/iPod Touch applications have more than 10,000 users and a mere 5 percent see more than 100,000, mobile advertising company AdMob revealed in its May 2009 metrics. The App Store’s long tail is in full effect, more than half of the apps in the AdMob network had fewer than 1,000 users in May.
But Mobilinga’s business doesn’t run by itself. The longer a Mobilinga software is listed in the App Store, the more its download numbers go down. Therefore the company has to steadily introduce more languages. Since March they have launched seven new iPhone applications which are also available for Android and Symbian, but the most money is made from the iPhone.
Who would have thought that in March 1999 when Matthias Kose started his first company based on a mobile application? The hotel booking engine bedhunter.com, where I first met him, seemed extremely hot back in those days. Mobile commerce on cell phones with the new WAP Internet standard was about to explode, a Durlacher Research report said – like a lot of other reports at the time. Kose planned an IPO in just one year with expected earnings of €100m. But nothing of that materialized after Boo.com went bust in May 2000 and the European VC economy collapsed subsequently in mere weeks.
Only Kose kept up his mantra: “The age of M-Commerce is just around the corner, it’s gonna be a big business”. Ten years later he seems right. But it took longer than expected and the industry looks quite different from what we thought. Sure enough, Durlacher, whose Mobile Commerce Report saw thousands of downloads and was said to be the blueprint for 600 mobile startups’ business plans, has also disappeared.