Michael Alvarez is the CEO of Avantar, the company behind iPhone applications like One Tap Movies, Showtimes, Calculator AXL, Yellow Pages, AirYell, and Munch. As part of TiPb's ongoing interview series and our look at the iPhone App Store, Michael was good enough to discuss Avantar's views on Apple's new mobile platform, where it is, and where it's going.

TiPb: Avantar has a wide range of apps on the market. Most appear to focus on quickly acquiring and succinctly displaying useful information like movie times, business listings, and restaurant options. What made Avantar choose these particular apps for your initial iPhone offerings?

Michael Alvarez: You are right. Our applications are meant to be locally relevant, where we use the iPhone's GPS capabilities to locate the user and then provide relevant information in his or her surrounding area. This is the ultimate stop gap where the brick and mortar business world meets the most relevant, and targeted, digital advertising solution. And, no one is doing it better than we are on the iPhone right now.

What made us choose these particular apps is a bit of a long story. It begins with the President of Avantar's passion for everything Apple. In his youth, Mr. Adrian Ochoa's kicked off his successful career with his purchase of Apple's first computer, which eventually led him to grow a very successful advertising agency and movie production studio.

More recently, he was also one of the first to get the first generation iPhone and it allowed him to envision what the future holds for a mobile Internet and the effect it will have on the advertising industry. Research and data support his conclusions of hyper-growth market opportunity in this sector. Recently, research firm Informa Telecoms & Media stated that "the mobile ad market is expected to grow to $12 billion by 2013, up from an estimated $1.72 billion for 2008." If you think about it, it just makes sense. Not everyone has a computer, but cell phones are more readily available to the masses. The population of this earth is 6.6 Billion and 3.3 Billion mobile handsets have already been sold.

When Mr. Ochoa and I learned about the plans to launch the App Store, we were in the process of ramping up our interactive yellow pages business and saw the marriage between mobile, Internet, & GPS as the perfect fit for what we had in mind. A few of our developers downloaded the SKD and begun programming our apps several months before the launch of the App Store. We now have nearly 1 Million downloads, and the rest is history yet to be discovered.

Given the diversity in Avantar's lineup, when designing user interfaces how do you weigh consistent branding/unified look-and-feel against the possibly very different requirements of each individual app?

Getting the right balance is the formula for success. It really comes down to experience, and being that the iPhone Apps are so new we learn new things through trial and error every day that help us to create that balance. We are also very thankful for excellent users who've downloaded our apps and provide us with their feedback all the time. We even had one user from Serbia who offered to redesign one of our apps and sent us all the files for free. How amazing is that?

When bringing your content and services to the iPhone, how much did you have to rethink existing presentation and interaction paradigms? Is there anything you learned from developing for the iPhone that would inform, or be carried back to, development for other platforms?

The iPhone was new for us so continue to learn as we go along. We just had to adapt our web design/usability experience and transform it into a smaller window view. Our collective experience in usability and design also help a great deal.

With 3G speed and GPS location, we're starting to see a shift in applications not just from "static" to "dynamic" but from "when" to "where". Instead of an alarm telling me it's 3pm, I can get an alarm telling me I'm passing the grocery store and I need milk. How fundamental will this change be for end-users?

Grand! Think about how much progress our two apps have made to simplify people's life:

1) Yellow Pages: No more phone book, no more searching two or three websites, no more reading through a list find what you want that's closest to you, and now you have all the information you need with a few taps of your finger including phone number, address, and driving directions.

2) Showtimes: No more calling an outdated recording for each theater, no more hunting around for information through two or three different websites, no more creating traffic jams in front of the theater to try and read all the posters and showtimes, and no more need for the newspaper. All of the necessary information shows instantly with a single tap of the finger.

Which, if any, of your iPhone apps (or feature(s) of your apps) have especially delighted you? Anything turn out even better than you first thought, or catch on with your customers more than you anticipated?

Showtimes has been as high as the #7 most favorite app, and Yellow Pages has also been a very popular app. Recently Apple published a report stating that the App Store reached it's 100 Millionth download, which means we currently receive nearly 1% of all their downloads.

Most developers are still experimenting with the business model behind the App Store. You offer both free and paid applications. Does that give you the best of both current worlds? Is there anything Apple could tweak or surface to make things even better for you and your customers?

Our strategy behind offering both paid and free apps was more experimental since no one really knew what to expect when the doors opened. It's been a great learning experience for us.

One thing I would ask Apple would be to add our own affiliate tracking links on the confirmation pages for each confirmed download. This would allow us to optimize advertising campaigns to know which source produces how many downloads, and thus increasing downloads and sales for both of Apple and us the developers.

Thanks Michael! Avantar.us is Avantar's website, and their applications One Tap Movies, Showtimes, Calculator AXL, Yellow Pages, AirYell, and Munch are available via the iTunes App Store.

James Thomson is the acclaimed developer behind DragThing for Mac OS X and PCalc RPN Calculator for the iPhone and iPod Touch. Following up on his recent blog postings about the challenges involved navigating the still-nascent App Store business model for developers, and TiPb's own look at whether or not there's a "long tail" potential for the market, James was gracious enough to sit down (virtually) and share his thoughts with us about the issues facing 3rd party iPhone developers going forward.

TiPb: James, you recently blogged about PCalc in the context of a "postmortem". What was the reaction like to that article, and did it bring about any changes in your current thinking or how you plan to proceed with PCalc going forward?

James Thomson: Reaction was interesting. Many iPhone developers contacted me privately, and via the blog, to say they had encountered similar problems with sales after the recent changes to the App Store.
Some pointed out the "Availability Trick" to change the App Store release date for your software when you do an update, to make it sort higher up in the listings. I talked about that a bit in a follow-up post here. It's unclear whether it really is a trick, or just what you are supposed to do, but it does seem to work.

I've also tried a few other suggestions, like renaming the app to "PCalc RPN Calculator" to make sure it appears during searches for the word "calculator" which it didn't before. So far, there has been a relatively small boost to sales, but I'm not sure how much of that is due to my changes, and how much is just down to the overall publicity that the article generated.

I'm working on a small 1.1.1 update at the moment to fix a few things, and I'll likely add some more layouts and themes. The real question is what will happen to sales then. If they remain flat, with all the other changes, then I'm going to have to try some more traditional marketing beyond the Google AdWords adverts we are already running. To a certain extent, the blog itself /is/ a form of marketing - I don't think I can really deny that, given it is raising the profile of our software.

Read the rest of the interview after the jump...

TiPb has been looking at the App Store and whether or not there is a "long tail" for developer income. Do you think there is currently a long-term business model for developers of niche-apps?

I think it's a much harder market than it was back in July. It's well publicised that the store is pretty crowded now, and it's getting increasingly harder to find things.

I think that when the App Store launched, the initial sales numbers were so high, that many developers - myself included - ended up with cartoon dollar signs for eyes, multiplying the first few months of sales figures out to a whole year. Now that there are many thousands more applications on the store, I don't think we're ever going to get back to those early days.

I think it's certainly possible to have a big "hit" application that breaks the top 50 and stays there for a while, generating significant income, but I don't think the store is geared towards more substantial applications that will be updated over a long time. Our sales are still non-zero however, so perhaps the level of the tail is just lower than expected.

Also, to be honest, this isn't happening in a vacuum - the state of the global economy isn't really helping matters. A lot of the software on the store isn't essential - PCalc excluded of course - so people might think twice before purchasing if they are worried about their savings. How much of that is a factor, I don't know, but I can't imagine it helps sales.

Since Apple and the App Store is the only way for developers to make their Apps available, does this shift some of the promotional responsibility to Apple? I.e., does Apple have some duty to promote Apps and provide as much visibility as possible, or do iPhone developers, like traditional devs, have to take on the marketing aspect for themselves?

I think Apple does bear some responsibility, at least in so far as making the store as easy to use as possible and helping customers find what they want. And more importantly, highlighting the best examples the store has to offer. If thousands of people are buying something, but it has a lot of one star reviews, why should that be more "popular" in the listings than something that has all five star reviews, but only a handful of people have found it?

I'd like it if a new iPhone user was looking for a more advanced calculator, they could quickly see that PCalc has 70-odd five star reviews and a very loyal group of customers. How you would represent that on the phone, I don't know. But Apple has lots of very talented user interface designers who could come up with something

Of course developers need to do some marketing themselves. But Apple gets 30% of the sales, so I don't think they are completely off the hook.

PCalc is a $9.99 App, which many have said seems to be the "sweet spot" for paid apps at the moment. However, we see some vendors switching from paid to free and back, or running short-term "sales" to either benefit from volume pricing or drive up their popularity before switching back. Is this a reality in the current App Store model, and is it something developers now all have to consider, both for their Apps and competing apps?

That's a really good question, I don't honestly know. Of course, you'll always get people who say that if your software was just that little bit cheaper, they'd buy it on the spot. How accurate that is, I'm not sure. If PCalc was $4.99, would I sell more than twice as many copies? If it was 99c, would I sell more than ten times?

It's a little tempting to just try it, and get some empirical data, but if you reduce the price and find that it doesn't actually help sales that much long term, then you're just losing out. And if the market tends towards lower and lower pricing, then I think the quality of software on the store will suffer.

I priced PCalc at what I thought was a fair price for what I've made, I can't really do much more than that. As it was there on day one, we didn't know what the prices of our competitors were going to be, so we tried not to worry about it too much. As it is, there are calculators on the store from free up to twice the price.

I do think it's equally hard for customers to know whether something that's priced at $9.99 is ten times better than something that's 99c...

What steps could Apple take, short term or long term, to help developers gain greater visibility in the App Store?

Short term, I'd add more categories, perhaps add another level below each of the main categories. Put all the calculators in one place so you only need to look at 20 things in a given section, rather than 2000. Perhaps some filtering options, so you don't see apps with lots of very low ratings. Even just a sorting option to sort by rating would help.

Long term, I think there needs to be a way of presenting what the "best" apps are on the store rather than just those that sell the most copies. I want to see apps ranked by quality, perhaps some combination of sales and rating, maybe with an editorial component. I don't think Apple has the time to do that right now, given that an app still takes a week or so to show up on the store after submission, but I hope they are thinking about it.

Some way to support limited trial versions in the store would also be very useful for customers. The Xbox Live Arcade store on the Xbox 360 has the right model for this - everything on it is a demo version that can be converted to a full version within the app itself.

The iTunes model for music doesn't work as well for selling software.

Last question: does "backspace" belong on a virtualized Calculator? (That's a cheap shot at Apple channeling my counterpart at Crackberry.com... )

Wow, I never even noticed that the Apple calculator doesn't have one. Yes, it certainly does

James, thanks for your time and generosity in sharing your insights with us and our readers!

Dragthings.com is James Thomson's website and blog, and his highly-regarded calculator application for the iPhone and iPod Touch, PCalc is available from the iTunes App Store.