The iPhone gets a $100 million iFund
Silicon Valley's Kleiner Perkins to finance startups that make iPhone software
(Fortune) -- Silicon Valley venture capital giant John Doerr said Thursdsay that his firm will launch a $100 million "iFund" to help finance the development of software applications for Apple's iPhone.
The fund raised by Kleiner Perkins Caufield & Byers is intended to ignite a flurry of new games, productivity tools and so-called widgets using Apple's software development kit unveiled Thursday. Kleiner Perkins will essentially open a bank for startups focused on iPhone applications.
"We're all here today because we love Apple (AAPL, Fortune 500) products," Doerr said at an Apple's event at the company's Cupertino, Calif. "And I'm here because I love Apple entrepreneurs."
Apple, which also announced new software to make the iPhone compatible with corporate e-mail systems, plans to open "the App Store" with the next release of iPhone software. The feature will allow people to purchase and download new applications for their phones.
According to the business plan, as explained by Apple, developers will participate in a revenue-sharing arrangement. Apple will keep 30 percent of sales from every app sold. Plus Apple will host and take care of credit card fees. The software developers get to keep 70% of the proceeds, said Jobs.
The move comes four months after Google (GOOG, Fortune 500) announced its $10 million Android fund. Unlike Apple's revenue sharing model, Android is structured like a bakeoff where the best mobile applications written for Google's open-source mobile platform will receive as much as $100,000 in prize money.
Both efforts aim to break wireless carriers' near-monopoly on what applications can be downloaded to cell phones.
In typical Silicon Valley hyperbole Doerr summed up the move as the beginning of a new world order. The iPhone, he said, is "bigger than the personal computer. If you want to invent the future, the iFund wants to help you build it."
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