With hundreds of new iPhone applications appearing every day, and with a cut-throat economy of third-party developers all competing for the top spot, how are these app builders to stay ahead of the pack? The answer may just lie in crowdsourcing.

Crowdsourcing allows developers to harness the creativity of a social community, and one Rome-based mobile developer, iWikiPhone, is leading the way. Its aim is to develop the new killer iPhone apps by harnessing the intrinsic motivation of a growing community – and by offering rewards for those who join in. They explain the philosophy here in an animated video.

The company was founded in June last year, and launched its community-based crowdsourcing model six months later. Since then, it has amassed over 10,000 participating community members, and three crowdsourced apps are already in the iPhone app store. Three more apps – including a business app for the iPad – are set for release in the next few months.

“We want to create an idea community with a sense of belonging,” said iWikiPhone founder Luca Di Cesare, “something that would hit a sense of emotion with the users. We develop the foundation and structure to maximize their creative motivation.”

The model works like this:

1. Members of the community submit ideas for new iPhone applications;
2. iWikiPhone selects the top five most feasible ideas;
3. The community discusses the selected ideas, contributes modifications, and then votes for the best idea overall;
4. the winning idea is developed and marketed by the iWikiPhone team;
5. the contributor of the winning idea gets $500 and 10% of the first month’s profit, while the top ten idea contributors get $50 and 1% of the first month’s profit

Alex Grant of iWikiPhone described the relationship between apps sales and community participation in a recent interview with SMI:

By having our worldwide community vote on the ideas, we are getting market research as well as creating a demand for the app. By emotionally involving the community in the early phases of the idea generation and development, this leads to them to purchase the app.

As seen below in this iWikiphone business sketch, B2C application developing is closely related to the marketing, market research and community management.

The marketing and community management parts of the model are entirely invested in social media channels and word-of-mouth advertising. “Advertising should be about Facebook,” says Di Cesare. “We try to implement the company functions to parallel our Facebook community.” Its Facebook fan page has 12,100 active fans, and the iWikiPhone community building model below shows how social media marketing really fosters the advocacy out of a specific community of iPhone users.

From what we’ve seen, iWikiPhone appears to be the first of its kind in fostering community spirit for mobile application crowdsourcing in this way, although others such as MEDLMobile.com, and uTest.com have done similar work with idea-rewarding.

Crowdsourcing tactics are often the product of a one-time social marketing campaign that attempts to get people involved and talking about a product or service. For example, Dunkin’ Donuts made a contest to crowdsource the perfect donut, and they gained extra online publicity and a new fan-conceived donut recipe. On a simpler level, however, crowdsourcing forms a community around a certain brand or product, and it gets people talking and sharing to make something they love.