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Apple Targeting Business World for the iPhone
The New York Times is running a couple of stories about the future of the iPhone in the business world and Apple's plan to maintain control of application development. Now that the iPhone SDK has been released and the "App store" has been demonstrated, Steve Jobs is pushing for the adoption of the iPhone as a standard business tool. In addition, a venture capitalist named John Doerr has launched a $100 million "iFund" to spur development of applications for the iPhone. From the NYTimes:
"Mr. Jobs was upfront that there are limitations on what applications can do. He talked about bans on pornography and malicious programs. He also said Apple will not allow any application to be installed on the machine other than through the iTunes store. Nor will applications be permitted that enable an end run around Apple's deals with wireless carriers. Many questions remain unanswered. How much streaming video will Apple allow, because the iPhone is such an interesting video device? Mr. Jobs did say that the application development environment will have a lot of capabilities for video playback. Will Apple allow a service like Last.FM to offer streaming music on the iPhone?"
Watch the video of the announcement yesterday. The Exchange compatability is the best I've ever seen.
As I mentioned in another post, Apple said they would announce a way for companies to release applications internally.
In my opinion, John Doerr is much more than "a" venture capitalist. Let me explain that statement in detail. Bear with me- I'm verbose, so it'll take a few paragraphs.
Doerr is a really sharp guy who saw potential in companies like Compaq, Sun, Symantec, Netscape, Amazon, and Google. The thing is that Doerr knows how to look at a business plan, understand the market opportunity a company wants to try to exploit, and have an idea of how likely the company is to be successful at doing it. So yes, Netscape, Amazon, and Google were "internet companies," but they were also companies with business plans that had not-entirely-ridiculous paths to profitability. Keep in mind that VCs typically have an awful "batting average" and invest in a lot more duds than eventual superstars, but the really big successes are generally good enough to make the overall average ROI, including the flops, quite positive.
A big part of the problem in the late 1990s is that a lot of VCs looked at Doerr's investments and basically came to this conclusion: "Doerr made a load of money for Kleiner Perkins by investing in the internet, so we have to invest in the internet." So in the late 1990s, many businesses that were basically "just like [whatever], but on the internet) were given ridiculous amounts of funding even when there was no clear path to profitability in the business plan. Yes, it's true that a VC firm can still make money in an environment like that of the mid-to-late 1990s by funding a company and taking it public as soon as it starts to show revenue growth, getting a big ROI on something that is never going to be profitable. But eventually the house of cards falls and then there's an overreaction as people say "oh, we lost all this money investing in the internet, so now we should avoid such investments," even when a good business plan appears.
I worked at a software startup in 1999. We had tests done with major retailers that proved we could increase the profitability of a given category anywhere from 25% to over 100%, depending on what the retailer's strategy was for that category (read up on "category management" for more info on category strategies). In the meetings with arrogant moron VCs, the founders would tell them about this and show them the actual data that supported the claim, plus testimonials from executives in the (multi-billion dollar) retailers where the tests were done, and the VCs' eyes would kind of glaze over. As soon as the founders stopped talking, the VCs would say something like "uh huh... so, what's your internet story." I suggested to the guy who had the original idea for the company that we should change the name to "e-[original name of company].com" and we'd be swimming in money.
The saddest thing was that apparently one such moron was from Kleiner Perkins Caulfield and Byers, which was widely seen as the VC firm at the time, in no small part due to the remarkable business vision of John Doerr. It would have been more accurate, from what I heard from very reliable sources, to say that Kleiner Perkins was a good VC firm with VCs of varying quality (yes, a high average, though), and John Doerr was the venture capitalist.
I'm not a fan of VCs in general, but I have a lot of respect for John Doerr. And if he's setting up a fund this big for iPhone app development, that makes me think very good things are coming for Apple through the iPhone. Very good things.
As always, YMMV.
"It is nice to know that the computer understands the problem. But I would like to understand it too." --Eugene Wigner
You're right, these companies will probably stick with Microsoft.
Wow, even though I should know better after reading comments on slashdot for years the ignorance does still surprise me.
1. the phone is not 3G, a 3G model should be out this year. Non multitasking? Meaning what, you want your phone to compress video for you while u talk? I can take notes, and use apps while on the phone so not sure what you mean. But you did throw the words bling-bling in to look like you are hip and know what you are talking about so i must be wrong here.
2. So since other organizations can't get developers, you do not think that Apple can? People want to develop for this platform so much that they are doing whatever they can to get on it, see http://www.modmyiphone.com/ . Not to even mention the 100 million dollar venture capitol fund for iphone apps that was shown off too.
3. So its so popular that people will do anything to be able to use one. Apple might not make the extra $ each month from these users but they are making money on each sale, and all those sales are just adding to marketshare.
4. Huh? Do you mean that a developer won't be able to make money writing iphone apps? You are seriously saying that the average developer would do better just putting up a web page and marketing their apps themselves rather than have it shown on a store dedicated to the iphone? Joe Schmoe can get the same exposure on the store as Adobe if they write a good app, thats very powerful for developers.
5. So what? Seriously, But also lets look at it the other way, did you watch the video from the event? Check the 5 developers that had 2 weeks to build apps. That was damned impressive. In some cases they started from scratch, and in some cases they just modified their existing code.
6. Not quite sure what you mean here, do you mean apple buying the companies/people that do the best apps? Or what?
It seems like people just want something to bitch about rather than using your heads.
Ducky
"Slap Android on a pure touchscreen phone and what do you have?"
A phone that's not available? That has no supporting infrastructure? No stores that sell it? No support staff ready, willing, and able to help? No iTunes? No backing from any major carrier? And no one, other than a few geeks, who care if it's "open", closed, or just cracked ajar?
Any sect, cult, or religion will legislate its creed into law if it acquires the political power to do so.
Let's take a look at a few reasons why Apple is currently doing pretty well in the smart phone market:
Look, I think Android will be a good platform, and that Google is going to put a lot of muscle behind it to limit Microsoft's reach in the mobile space and push their own interests instead. But saying "... Slap Android on a pure touchscreen phone ... [and you get an] ... Instant replacement for the iPhone ..." is a big, big stretch.
Given that we are discussing the presentation where Apple specifically announced "that the iPhone can accept pushed mail from an exchange server" with version 2.0 of the firmware, what's your point?
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