$100 Per Download: The eBay iPhone Story

What’s the value of an iPhone app download for a brand? The answer varies wildly. For eBay, the value was nearly $100 in sales per download. According to an article in the Financial Times, eBay’s iPhone app has seen over $400 million in sales to date, from just over 4.6 million downloads. To be precise, that came out to $89.95 in sales per download – but the year end (and holiday season) hasn’t yet come.

With numbers like those, one must wonder what kind of ROI Amazon is seeing with their iPhone app. But more than anything, this news points to two key ideas: Mobile commerce is the here and now, and the mobile divide keeps getting wider.

The mobile commerce we saw take off overseas hadn’t really hit mainstream in the states. Either the technology lagged behind (i.e. RFID in-phone like in Asia), or the payment process rubbed us the wrong way (US consumers are very sensitive about wireless charges, which, along with high carrier margins, stunted the growth of premium SMS). But clearly, when payment is centralized in the “cloud” with an on-file credit or debit card, the barriers fall away. I don’t think it will be long before we start to see retailers package the “self-checkout” system into a smartphone app utilizing barcode scanning and centralized payment.

Which brings to the forefront the second issue of a mobile divide. The difference in utility between an ironically named “feature phone” and a smartphone is wider than ever. As devices like the iPhone or new Android phones become as useful (or arguably, more useful) than home computers, they resemble less and less their lower priced counterparts. It’s starting to become as ridiculous as to compare a typewriter to a laptop. The challenge isn’t even the upfront cost of the devices (heck, the 3G iPhone is only $99), but rather the addition of a monthly data charge on top of voice and messaging (which remain the most important uses of the mobile phone for many citizens). Until we see voice and text move to VoIP and chat over a single data connection, the mobile industry is going to continue to fragment, with eventually about half the population walking around with computers in their pockets, and the other half with, well, typewriters.

Luckilly, the success of apps like eBay’s will continue to drive the momentum in development and support of rich mobile experiences, and that will keep the evolution going. After all, at nearly $100 per download, it’s an irresistible opportunity.