While AT&T, Google and smartphone manufacturers like Motorola may take a near-term hit when the iPhone becomes available to Verizon customers next month, Apple’s expansion to other wireless carriers will have a positive impact on the entire mobile sector. This is particularly true for local application developers.
“The iPhone is going to explode, and this will increase the adoption rate of smartphones in general,” said Alex Bratton, CEO of Lisle-based Lextech and multiple related companies in the mobile application space. “So many people were waiting on this.”
Bratton added that many of his government and municipal clients that are locked into Verizon contracts will finally be able to tap into the iPhone and all of its innovation.
Ashish Rangnekar, founder of Chicago-based education application developer Watermelon Express, sees a “shift in customer demographics” among the millions of new iPhone owners in 2011.
“Our apps are primarily targeting students in the 16-to-30 age group,” he said. “With Verizon on board, we are expecting to see a possible deeper penetration in this customer segment.”
Hoping for another app gold rush
For game and application developers that missed out on the first wave of the iPhone app phenomenon in 2008, expansion to Verizon represents another bite at the Apple boom.
“Late adopter iOS (the mobile platform for the iPhone, iPad and iPod touch) developers have fantasized what it would have been like to be there at the launch of the App Store,” said Josh Hernandez, CEO of Chicago-based game developer Tap Me Inc. “Now they will have that opportunity with even more buzz.”
Chris Grove, chief technology officer of Downers Grove-based iPhone and iPad application developer KeyLimeTie, is not as bullish.
“With tens of millions of iPhones already out there, I don’t think the impact will be that substantial,” he said.
A friend in the trend
Regardless of how many Verizon iPhones are sold in the months ahead, the multibillion dollar mobile application industry that Apple introduced to the world only three years ago (and that Google has expanded with its own impressive array of Android-powered devices) will only grow. This means new opportunities for local businesses, entrepreneurs, and even high school students to profit from the innovation.
Two years ago, University of Chicago Laboratory School student Sam Kaplan (then in 7th Grade) made national headlines after his iPhone app development prowess was first profiled in this column. With new titles in the works for the iPhone and iPad, Kaplan expects a wider customer base for his high school years.
“Every time Apple makes its products available to more people, it helps me and other developers,” he said.
Bump raises $16 million
Founded by University of Chicago Booth School of Business students, Bump Technologies was a pioneer in the iPhone application development space. Bump was the 1 billionth app downloaded to an iPhone in April 2009. The company has since moved to Mountain View, California, developed a popular Android app, and inked a major distribution deal with PayPal.
Earlier this month, Bump raised $16 million in a venture round raised led by Andreessen Horowitz, a Silicon Valley venture capital fund co-founded by Netscape founder Mark Andressen that also recently contributed to Groupon’s $950 million round.
Bump is among three recent winners of Booth’s New Venture Challenge to raise significant venture capital. Watermelon Express, noted above which focuses largely on SAT training apps, raised money from Groupon’s founding investors. Bucktown-based GrubHub.com raised $11 million late last year in a round led by early eBay and Yelp investor Benchmark.
“It shows you the cool stuff coming out of Chicago,” said Entrepreneurship and Finance professor Steven Kaplan, one of the founders of the New Venture Challenge as well as Sam’s father. “Now students are coming to Chicago Booth expressly for entrepreneurship.”