Does your business need an iPhone app?

No one can deny the popularity of Apple’s iPhone. It’s sleek black lines, and easy to use interface has pushed the “state of the art” for mobile phones in directions never seen before. And with the ever expanding library of new applications, it begs the question: Does my business need an iPhone app?

The genius marketing phrase, “There’s and app for that”, has quickly become the pied-piper call for thousands of business owners. It seems like I can’t turn on the TV without being bombarded with ways I can use my mobile phone to order products & services, make reservations, and perform online banking tasks. And I have to admit, I love where the technology is going. Having the power of the web in the palm of my hand has long been in my “Need” category. Never before has it been so easy to respond to email, reboot web servers, and find local businesses. To be sure, providing a mechanism for customers to interact with your business from their mobile phone can generate a powerful marketing response.

Recently, I’ve had several people approach me with iPhone app ideas for their businesses. Filled with visions of grandeur and dollar signs these individuals can’t wait to get started. But with over 200,000 applications in the app store, I have started to wonder just how many different tip-calculators people really need and what the most responsible business strategy is for using mobile phone applications.

Assuming your idea is useful, productive, or entertaining in a unique way, the first thing to consider is your underlying motivation for wanting an iPhone app. While there are some applications out there reporting large numbers of paid users, but most apps can’t cover their own development costs. At $25-50k per app, you’ll need 25 to 50 thousand people to purchase your $0.99 application just to break even, not to mention the any ongoing maintenance and operations costs. And with 200,000+ apps to choose from, finding your application is getting harder by the day.

Next, you need to look at your customers demographics. Are they predominately iPhone users? If not you may quickly find yourself needing an application for Android, Windows Mobile, and Blackberry to provide all of your customers the same level of functionality. Faced with the additional cost of multiple apps, the financial numbers look even more depressing. In this case, a web site formatted for mobile phones makes more economic sense, especially if your application doesn’t require the native iPhone look and feel.

So if the financial numbers don’t quite work, what other reasons exist for building an iPhone application? It seems like the best reasons are marketing related. The iPhone is seen as cool and trendy, which by association can have a positive effect on you business image. And being able to have your app’s icon seen every time someone uses their phone can also keep your business front and center, leading to additional purchases, more loyalty, or better word of mouth advertising. Looking at an iPhone app as an advertising tool is much more palatable financially.

Hitching a ride on the growing mobile phone application market can be a fun, brand building experience. But make sure you understand why you’re doing it and how it fits your strategic business plans. Otherwise you’ll be taken for a ride, with nothing but a little known iPhone app to show for it.