Apple's iPhone to Bring Educational Gaming to the Masses

With the launch of the app store, Apple (AAPL) has successfully completed 'phase one' of their foray into gaming. Apple gaming, however, is much more than just a game. Apple gaming is more relevant than traditional gaming because it is founded upon practical information and practical skill development. Instead of idling away your time, Apple wants your recreational time to be well spent.

Thus far the games receiving the most hype are those that utilize the iPhone's accelerometer, such as Super MonkeyBall and Cro-Mag Rally. But the largest volume of new apps are educational in nature. This trend is significant because it reveals the true intention of the platform. Apple is planning to revolutionize casual gaming by not only going 3G mobile, but by customizing educational options for iPhone users.

The secret sauce of iPhone 1.0 was access to the 'real' Internet. The secret market share success of iPhone 2.0 will be the ability to customize the 'real' Internet in a way that has never been done before. We live in a world where customization is desired above all else. We want custom homes, we want custom made golf clubs, we want custom motorcycles, custom cakes, custom software... custom anything and everything! Items or services that are individually formatted for use tend to captivate customers.

Apple already did this with the music industry, allowing listeners to purchase their favorite songs instead of entire albums. Customized playlists became all the rage. They have also done it with widgets on the Mac providing custom stock quotes, custom weather, or custom sports. Now they're doing it in a more formal way on their mobile mini-computer. The apps for the iPhone allow users to educate themselves with their very own, individually-tailored curriculum.

You want religion? iPhone's got it for you. You want to create music? iPhone's got virtual instruments, recording and mixing. You want a personal trainer while running, cycling, or hiking? iPhone's got it. How about a birth buddy to help your wife with labor contractions? iPhone's even got that. Some other practical apps include iLingo which can teach you a new language, Trigger which helps with trigonometry, and apps specializing in banking, travel, photography, shopping and social networking. If you were amazed at how quickly you became totally dependent on your cellphone for communication, watch what happens to your newfound dependency for customized information on iPhone 2.0.

Ironically, these real life educational tools have been generated from a college drop-out. Steve Jobs didn't even last one semester. Perhaps his disdain of busy work and useless information that floods traditional education is what fuels his quest to provide a better way.

The launch of the app store is a bigger story than the 3G iPhone release. In the same way that Google (GOOG) search allowed us to sort and find relevant information on the web, the Apple app store will help us to narrow down and choose educational pursuits of interest. That is what phase one of Apple gaming is all about. The real job of phase one is to allow the iPhone/iPod touch platform to become an accepted medium for learning math, science, language, music, etc... This is why Apple is willing to give away the iPod touch when students purchase a Mac. They want consumers to become acclimated to the app store.

Phase two is coming. Phase two will add to the educational experience by implementing physical participation in a similar way to what Activision (ATVI) has done with Guitar Hero and Nintendo (NTDOY.PK) has done with the Wii. The difference is that Apple gaming will actually teach the user how to play a real guitar or a real piano or real drums.

Apple apps might have a different feel than traditional games but they are setting themselves up to become the first company to successfully scale educational gaming to the masses. Any platform that fulfills that kind of need is certain to be long-lasting as well as financially rewarding.

Disclosure: Long AAPL

Comments

[NetworkEffect]

this is exactly the value of the iPhone. couldn't agree more. it's the ecosystem around it that is the largest revenue opportunity for the iPhone. right now, everyone is focused on the revenues Apple will generate from selling the hardware. but as soon as they see the statistics on how many applications have been downloaded over the next couple weeks/months, they will start to realize the explosion that is the iPhone network. this thing is a snowball rolling down a hill.

[Mac'em X]

The lack of this ecosystem is where BlackBerry is going to get hit hard. Apple's built tremendous interlocking pieces of an ecosystem over many years. No need to knock RIM – they've had great success – but by comparison, the BlackBerry is a one-trick device and will struggle to keep afloat in the iPhone sea.