Thursday, November 12, 2009

App Attack (As the Government Builds Unwanted Cars)

While the Obama Administration tries to prop up your great grandfather's boom industries, LOL, the real action is happening in the Bay Area. WSJ has a great piece on the booming industry for iPhone App's. But notice, the article states the boom is occurring "despite the recession", but this is what a recession is all about, a readjustment away from Federal Reserve manipulated industries and in the direction of industries where non-manipulated market demand:
There is a hint of that old boomtown feeling again in the Bay Area -- this time in living rooms and garages and cubicles where a cottage industry is unfolding around the iPhone app.

Despite the recession, hundreds of start-ups have sprung up in the area since Apple Inc. launched the iPhone two years ago and opened up the device so third-party developers could create games and other software applications for it. "This is our dot-com boom," said Samir Shah, 26 years old, a co-founder of Mountain View-based Snapture Labs LLC, which makes a $1.99 camera app that has been one of the top-ranked photography apps since September.

Mr. Shah and two other Snapture co-founders graduated from Carnegie Mellon University in Pittsburgh in 2007 and moved to Silicon Valley shortly after. They work on their iPhone business in their free time from one of their apartments, but said they hope to eventually turn it into a full-time business.
Apple, which has sold more than 30 million iPhones and 20 million iPod touches, boasts more than 100,000 apps on its App Store, through which people can download games, entertainment and utility applications. Most are free -- and make money from ads -- or cost less than a dollar. Developers get 70% of any revenue they make from app sales, with the remaining 30% going to Apple. That is a better proposition than app development for other mobile phones has been in the past. Rivals now offer similar revenue-share models....

The popularity of the iPhone App Store had led its competitors to provide similar offerings. Research In Motion Ltd., Google Inc. and Palm Inc. have opened similar stores and have been trying to woo app developers with promises of better support. Though the costs of developing applications for all the devices are prohibitive to many of the smaller developers, some companies, like Flixster, a San Francisco-based movie sharing social network, have created apps for all of them.

The new cottage industry is thriving even as other businesses in the area cut back in the recession. Ngmoco Inc., the San Francisco game app company founded in June 2008 by a former Electronic Arts Inc. executive, landed $10 million in a financing round in March. Since its inception, it has grown from four founders to more than 25 employees. Ngmoco has 11 apps in Apple's App Store and is preparing more for release in coming months...

Many iPhone developers have helped inject fizz back into the start-up scene by holding conferences and get-togethers. In August, a nonprofit called iPhone DevCamp had an event attended by 600 people to network and share ideas. A group called the Silicon Valley iPhone Developers' Meetup gathers once a month in Palo Alto to trade project ideas.

Silicon Valley's universities are also coaxing the iPhone app boom along. In September 2008, Stanford University began offering an iPhone app-building course taught by Apple's engineers. It also posts the course online free. Roughly 130 students have taken the course since last fall, and more than one million people have downloaded the lectures, said Julie Zelenski, a Stanford lecturer in computer science.

Edward Marks, founder of iPhone app start-up Indelible Software LLC, is one student who took the Stanford course and then set up his company in Palo Alto in June upon graduation. The 23-year-old said he briefly considered moving to Hawaii but realized everyone he wanted to do business with was in the Bay Area. "We just realized that this was basically the center of the iPhone world," he said.

Some local techies are finding the iPhone app opportunity so attractive that they left jobs at more secure tech firms to jump into the scene. Sam Yam, 25, one of the founders of AdWhirl, a Palo Alto ad network company for iPhone apps, says he left a job at Mountain View service company Loopt Inc. in February to start the company, which helps manage ad placement in iPhone apps...
Read the full WSJ article here.

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