If you have an iPhone, iPad or Android phone, chances are you have at least one “Talking Friends” app on your favorite device, especially if you have kids. Which is it? Tom Cat? Santa? Roby the Robot? Rex the Dinosaur? Harry the Hedgehog? Or is it Bacteria John?

Kids may abolsutely adore those quirky apps, but apparently building and selling them is quite a solid business to boot.

Outfit7, the company behind the ‘Talking Friends’ series of apps for iOS and Android, says it has reached 41 million downloads in less than six months since the first app was released. The download rate is accelerating at 10 million a month and the company’s CEO, Andrej Nabergoj, tells me they expect to hit 100 million downloads by the second quarter of 2011.

For your comparison: the oft-hyped Angry Birds apps have been downloaded roughly 42 million times to date – 12 million paid, 30 million free apps – only it took Rovio twice as long than it took Outfit7.

In case you’re not familiar with ‘Talking Friends’: each of the apps from the series features an animated 3D character that can be poked, tickled, and played with in various ways via the touch screen. Using the device’s microphone, you can speak to the character, and they will repeat back everything they hear in their voice.

Trust me, kids go absolutely crazy over this. And not just kids.

Users can also record their own videos of the characters speaking and playing, and share them on YouTube, Facebook, or via email straight from the app. While I’ve used some of the apps in the past, I’d never recorded a video before, until now (see above).

So from the 41 million downloads, how many were for the paid apps? About 6 million units, Nabergoj tells me, with prices ranging from $0.99 to $2.99 each. The free apps are advertising-supported and boast in-app purchases, and Nabergoj tells me they’re seeing “significant revenue streams”, using multiple ad networks (AdMob, InMobi and MobClix).

Taking into account Apple and Google’s cuts on sales, the company could be bringing in up to $20 million in revenues, according to my very own back-of-the-envelope calculations, not even including the revenue streams from advertising and in-app purchases.

Outfit7, which employs some 15 people and was initially founded in Ljubljana, Slovenia, has just planted its new HQ office in Palo Alto, California. The company is self-funded and, according to Nabergoj, “needless to say, profitable”.

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Authors: Robin Wauters

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