The author shows insight. The key thing that he realized is that for Nike, etc, run-tracking apps seem to be treated as branding tools to help them sell more shoes. In essence, his company is getting free advertising via Nike's ads. As they sell more of their pedometer hardware, he gets new potential customers.
Likewise, this special circumstance makes it a bit difficult to extrapolate from his success to another situation. If the giant arrives and actually intends to wrest control of the segment from you and profit from it per se, the situation will play out differently.
I really appreciate the plucky nature of this post, but I'm really not holding my breath.
Right now the Nike app is $2.99 and number one in the Healthcare & Fitness section - Runkeeper is $9.99 and ranked 24th.
Yes - Nike really wants to sell shoes, but they really want to sell shoes this app can be a loss leader for them, they don't need to really show a profit - heck if it breaks even they're fine. You really don't want to compete with someone like Nike with an app where they don't need to make a profit. Heck he mentions that they're 14th (actually 13th now) and Addidas is 18th in the section, but thats the free apps section. Again Addidas doesn't need to make a profit with their product when they are really making their money on shoes.
As far as I can tell runkeeper is just an app? eek.
Why compete via the bestseller list when you can compete with your previous sales records? They doubled sales! Who cares if Nike sold more? McDonalds sold more coffee yesterday than every Startup here put together has paying customers, but that doesn't make anyone less successful.
Did their "sales" double? or their users/downloads? The author likes to conflate downloads of their free app and their paid app. I went back and looked at the previous post - when their "numbers" doubled. Then they moved from 11 to 8 in the store, now they're at 13.
Now that Nike has a directly competing product at 1/3 the price I want to see the follow up post with revenue numbers after Nike's app has been in the store for more then a day.
I see no reason to believe their conversion rate would change. If it did that would be a nice disclosure, but why are you seemingly so offended by an optimistic entrepreneur? Is there any other way to win?
Likewise, this special circumstance makes it a bit difficult to extrapolate from his success to another situation. If the giant arrives and actually intends to wrest control of the segment from you and profit from it per se, the situation will play out differently.