Tapulous, which develops Apple (AAPL) iPhone game apps, got its start in 2008, with the help of high-profile angel investors like Salesforce.com's Marc Benioff and Sun's cofounder, Andy Bechtolsheim. Since then, the company's growth has been stunning. There are now 17 million users. Is it any wonder that Tapulous' website says: "We love the iPhone"?In fact, the company is clearing about $1 million a month from the iPhone. Much of this is due to the popularity of the Tap Tap Revenge game, which is quite addictive. Kind of like Guitar Hero, you can punch out tunes by tapping your iPhone.
Tapulous has certainly hit a gusher. But, as is the bane for any game company, it's not easy coming up with an encore. Then again, Tapulous has been able to build a brand and also learn from its massive user base. Also, the company has been effective in putting together promotions with Apple (such as by having Tap Tap tournaments in Apple stores).
However, the big winner is, of course, Apple. The company is essentially a toll-booth for apps, getting a 30% split of the revenues. Over the past couple years, the App Store has seen more than 2 billion downloads and there are now over 100,000 apps. And, as the iPhone base grows -- which is now over 50 million phones -- the App Store revenue stream is likely to be substantial.
Tom Taulli advises on business tax preparation and resolving tax problems. He is also the author of a variety of books, including the including The Complete M&A Handbook
. His website is at Taulli.com.
Comfort Zone Investing: Unconventional Thinking Needed
BP to Begin Scaling Back Oil Cleanup
Oil's Uncertain Economic Outlook
