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Demand for smart-phone applications spawns opportunities

February 6, 2010

Smart-phone fever is heating up the climate for innovation in the local tech community, as firms new and old try to cash in on the demand for applications that can be used on the iPhone, BlackBerry and other gadgets from the likes of Palm and Google.

Tech entrepreneurs also see opportunities in optimizing existing Web sites to make them easier to access and navigate for smart-phone users.

James Burnes went to part-time status at Media Sauce to form Mobiltopia, which targets the fast-growing market for smart-phone applications. (IBJ Photo/ Perry Reichanadter)

“Cell phones are the new computer. These are the only devices we carry with us at all times and the only device we put at our bedsides,” said James Burnes, CEO of upstart Mobiltopia.

Burnes left his post as a vice president of Carmel-based Internet consulting firm Media Sauce to form Mobiltopia with visions of big growth in the smart-phone sector.

Research firm Gartner estimates that mobile applications could reach $6.7 billion in sales this year, soaring to $29.5 billion in 2013. But good luck trying to find reliable numbers on just how many third-party developers like Burnes are out there competing for a piece of the pie.

Right now he runs a virtual office, consisting of a handful of whiz kids who understand the technology and can write code for smart-phone apps and tweaks to existing Web sites that make them more hospitable to visitors using the devices.

“It’s been difficult finding the right talent,” he said. But “we have the people on the team already going after business.”

Around here, Burnes isn’t the first to the game.

Carmel-based LaViaz Mobile launched two years ago and has been writing smart-phone apps for sports fans and for organizers of conventions.

Ron Blaisdell and two other seasoned veterans of the IT industry were in the mood to work on something new one day when Blaisdell and former Microsoft employee Steve Pieper started fiddling with an iPhone bought by Blaisdell’s wife. They wound up developing content based around Indianapolis-based college sports conference Horizon League.

As with Burnes, they found it difficult to find anyone with iPhone experience “because it was brand new.” But LaViaz built a platform for smart-phone apps from which has sprung not only mobile content for the Horizon League teams, such as Butler University basketball, but also something known as “EventView” that those attending conventions can call up on their iPhones to get the latest event information.

The first to buy the app was Gen Con, which sponsors thousands of gaming events around the nation.

To be announced in the next few weeks will be a LaViaz app for municipalities. Blaisdell won’t elaborate, but says such apps developed by others have found uses in other cities and are capable of such nifty functions as allowing iPhone users to take photos of potholes to relay the offending crater to the street department.

But much of LaViaz’s work, using a five-person tech team, has been done on a consulting basis for other companies.

Meanwhile, existing software companies are also getting in on the burgeoning business of apps for wireless phones.

Indianapolis-based FormSpring, which develops online forms—everything from online job applications to forms for teacher evaluations—recently put together for a Brownsburg HVAC contractor an iPhone app that allows technicians to order parts for a customer’s furnace on the spot. Before, they’d phone in an order or wait until they got back to the office to do the paperwork.

“Our application allows people to collect data in the field,” said Chris Lucas, an executive of the 4-year-old firm.

One of FormSpring’s former employees left the firm last year to launch his own app business.

August Trometer launched mobile coupon service Yowza, which flashes coupons onto the screen of an iPhone. Merchants either scan a bar code that pops up on the phone’s display or enter the number code accompanying it to allow users to redeem the electronic coupon.

The idea was hatched by actor Greg Grunberg, who plays Matt Parkman on NBC’s “Heroes.” A mutual friend suggested Trometer contact Grunberg and the two hit it off. Their free download service has lassoed big clients including The Finish Line, Pier 1, Sears and Saks Fifth Avenue.

Mobiltopia’s Burnes hasn’t officially lined up a client, but he says he’s close.

He already has his pricing strategy mapped out. He plans to charge a minimum of $1,500 to optimize a Web site for mobile access, plus a minimum of $49 a month to host it.

His price to develop an app is still a bit squishy. Expect to pay at least $5,000, though more complex ones can run more than $100,000.

Want your app distributed through Apple’s iPhone store, which has over 65,000 apps in its inventory? Apple’s rules are, you can pick the price, but 30 percent of the revenue flows to Apple.

For now, Burnes is left to talk about potential—“huge potential”—for writing apps and optimizing Web sites for smart phones.

Forrester Research estimates that smart-phone penetration among U.S. adults reached 17 percent at the end of 2009, from 11 percent a year earlier and 7 percent in 2007.

By “smart phone,” Forrester means a mobile phone or connected handheld using a high-level operating system, such as iPhone OS, Blackberry OS or Palm OS.

Burnes points to other analyst estimates that smart-phone penetration could soar to 30 percent by the end of this year.

“Mobile has only begun to scratch the surface,” he said.

Yet a number of Web sites aren’t compatible with smart phones, Burnes said, pointing to research by Boston-based consumer research firm Compete. It found that 8 percent of smart-phone users surveyed said they were unable to complete purchases online, and 45 percent of those said it was because they couldn’t load the Web site.

Burnes said his firm has developed a smart-phone optimization system that allows a site to determine whether a visitor is using a phone or a computer. The software detects the particular type of phone and packages content to better suit the phone’s smaller screen size.

Burnes also contemplates apps that would allow a company’s employees to file their expenses, report their hours, request vacation days or conduct other mundane chores through their smart phones.

“We could operate our entire business, generally speaking, through a mobile device today.”•

 

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