Smule's big iPhone OS 3.0 plans

CEO and co-founder, Jeff Smith, on expanding Smule's business model

In the fourth month after launching its first product, Smule, a maker of popular iPhone apps, was only supposed to make $30,000 in revenue. Or so, CEO and co-founder Jeff Smith thought. Instead, the company brought in $300,000. The estimated goal for 2009 revenue was $1.4 million, and already Smith is confident Smule will easily beat that expectation.

That's especially when the company starts charging its nearly 1.5 million users for more goods "within the application," in the next 30 days, said Smith.

Smule, best known for turning the iPhone into a wind instrument through its popular game called the Ocarina, currently charges users an upfront application fee of $1, for an all-you-can-eat experience.

In this segment, we talk about Smule's business model and if taking an upfront fee is enough to pay for its users.

"If our community is using this network, then we know we have an opportunity to extend the business model, both through going back to the same users and charging them for more goods within the application – something we’ll begin to do this summer with iPhone OS 3.O," said Smith. "But there’s also an opportunity to offer additional services that are in the cloud, these premium services in the cloud. We’ll begin doing that in the fourth quarter.” 

What are those goods? I asked. Smith wouldn't divulge the details, but said in a jocular way that it would launch Smule into the "mainstream." I take this to be a direct hit at a prior piece about Smule I had written. (See below for related articles.)

We filmed this interview last week, so here's an update on Smule's OS 3.0 announcement, which was released today.  Smule launched Leaf Trombone World Stage exclusively for iPhone OS 3.0. The new version includes the ability to play duets with other Smu-sicians. Because the iPhone OS 3.0 supports peer-to-peer discovery and communication over Bluetooth, no Wi-Fi is required and Leaf Tromonists can discover ensemble partners and perform live duets.   

Watch the video for the rest of the interview as well as Smith's thoughts on why Smule is committed to the iPhone, and doesn't plan to offer its apps on any other smart phone platforms.

(Note: Don't forget to watch Smith as guest host of Vator Box last week. In that segment, we looked at Heyzap)