Friday, March 7, 2008

Steve Jobs, John Doerr and the iPhone Ecosystem

I have always maintained that Apple's future success depends on its ability to orchestrate the iPhone business ecosystem if it is to become more than a niche player. With iTunes and iPod, Apple evolved from being a niche player to be a mainstream player in the music sector. The critical decision was to make iPod and iTunes compatible with Windows. In doing so, Apple could potentially include and involve the multiple millions of Windows users--without such a large network to tap into, Apple would have been a marginal player in music.
Now it is trying to be a rule-maker in the smart phone sector using a different approach: It is linking with John Doerr of Kleiner Perkins (the company that funded Amazon, Netscape and Google). The VC firm has established a $100 million fund (dubbed the iFund) to spearhead software development. This fund will prime the network in terms of motivating the developers to write applications for iPhone.
Steve Jobs laid out the iPhone Software Roadmap on March 6. Time will tell if Apple succeeds with iPhone and be a viable competitor to RIM (Blackberry) and Microsoft (Windows Mobile), not to mention Symbian and Palm.

Apple's move shows the importance of priming the network through investment dollars to gain preferential attention from third-party developers. The incentive has been announced. We will wait and see how the developer community responds.

Update: March 13, 2008
Here's a good video

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