Kleiner Perkins Caufield & Byers puts its money behind iPhone and iPod touch development to coincide with Apple's attack on BlackBerry.

Michael Singer, Contributor

March 6, 2008

3 Min Read

Apple's iPhone is getting a $100 million shot in the arm from venture capital firm Kleiner Perkins Caufield & Byers to help develop applications for the enterprise and consumer markets.

Dubbed the iFund and managed by KPCB, the investment is designed for companies that want to extend the capabilities of the iPhone and iPod touch platform. Apple on Thursday said it will provide KPCB with market insight and support.

"Developers are already bursting with ideas for the iPhone and iPod touch, and now they have the chance to turn those ideas into great companies with the help of world-class venture capitalists," Apple CEO Steve Jobs said in a statement.

KPCB VP John Doerr acknowledged Apple's past successes with the Macintosh computer and the iPod, but said the iPhone represented the third great platform.

The trend of having an Internet-connected mini-computer is going to be bigger than the PC, Doerr said during a press event at Apple's headquarters. "It's about this great opportunity, but it's about more than the money, it's about the great team at Apple and the great talent we can recruit together."

The iFund will be led by KPCB partner Matt Murphy in collaboration with partners like Doerr and other Silicon Valley legends such as Bill Joy, Randy Komisar, Ted Schlein, Chi-Hua Chien, and Ellen Pao.

KPCB said the initiative will be agnostic to stage and size of investment, with a focus on areas including location based services, social networking, mobile commerce, communication, and entertainment.

The iPhone has been wildly popular with early adopters and trendsetters, but the smartphone has had its challenges in supplanting the RIM BlackBerry as the mobile business tool of choice. Jobs said the iPhone took 28% market share in the last three months of 2007 compared with 41% by RIM. However, Jobs gleefully pointed to research showing that Apple's iPhone accounted for 71% of U.S. mobile browser usage.

Hoping to turn the tide with its business customers, Apple announced that it will natively support Microsoft Exchange through an ActiveSync license. The support includes push e-mail, push calendaring, push contacts, global address lists, and the ability to remotely wipe it off the device should it get lost or stolen.

To help increase the iPhone's ecosystem, Apple also released a beta version of a software developer kit, which he expects to be fully functioning by June. Previously, all non-Apple applications were run through its Safari Web browser.

Apple also is establishing a marketplace for iPhone development where individuals, small design firms, and even large enterprises could build, test, debug, and deploy their smartphone apps.

"You're a dev and you just spent two weeks or a bit longer writing this app, and what's your dream? To get it in front of every iPhone user," Jobs said.

To ensure quality and prevent security lapses, Apple is requiring developers to register with Apple for $99 and get an electronic certificate so that Apple can track the applications as well as supporting updates.

"If they write a malicious application, we can track them down and tell their parents," Jobs quipped.

However, Apple said it would only support Web-based VoIP applications and not ones that tap into cellular networks.

Apple also said it is working on a distribution model for enterprise customers that would allow them to distribute custom business applications to employees.

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