Cashing in on the iPhone

Consider them prospectors of the digital age.

Software programmers are aiming to strike it rich by developing applications for Apple's much ballyhooed iPhone.

"If 700,000 people around the world pay $2 to download my program, I'll make a bundle," said Collin Donnell, a 23-year-old developer who was raised in Sonoma County. "And $2 isn't much more than the cost of a song."

Apple announced in March it would let third-party developers create applications for the iPhone, which it expects will be in the hands of 10 million people by year's end.

Programmers have rushed to create a wide array of software add-ons. The applications are sold directly over the iPhone, using the iTune interface. Apple takes a 30 percent cut from each sale at its so-called App Store, which opened July 11.

By creating a central store, Apple is doing for applications what it did for music, said Ryan Joseph, an iPhone program developer at Santa Rosa-based Micromat.

"I think it's a far better business opportunity than most people realize," Joseph said. "The App Store is a game-changing evolution."

Unlike the music industry where well-established labels make it hard for newcomers to be noticed, the iPhone is an entirely new platform.

"We have the same chance as Adobe or anyone else. It's a new platform; we're on the same footing," Donnell said. "That's pretty neat."

Many of the best-selling programs were written by companies with only two or three developers, Donnell said.

The fourth-best selling iPhone application was designed by Shashwat Parhi, who works at a four-person company that specializes in IT solutions for schools. The program sells for 99 cents and lets users do unit conversions, such as feet into meters or up-to-date currency exchange rates.

"Units, my first iPhone app, has reached top 10 in the App Store," he wrote Saturday on Twitter, his mini-blog. "I am really excited now. :-)"

The three top-selling applications are all games, which were designed by Apple, Vivendi Games and Sega. But the eighth-best selling application, a program that allows people to virtually finger-paint on their iPhone, was designed by a family of four in Austin, Texas.

"There are four of us, two parents and two children, and everyone plays a role in creating our iPhone applications," according to IMAK Creations' Web site.

Donnell is part of a two-person team in Sacramento working to design iPhone apps. The company, Stone Cobra, wants him to design a board game that co-workers can play against each other while stuck in boring corporate meetings. He is also working on his own applications.

"I try to focus on really simple solutions for everyday problems," he said. "I've seen applications I could create in a few days, and then there are things we'll be working on for a few months."

Kleiner Perkins Caufield & Byers, the famed venture capital firm in Menlo Park, announced in March that it was offering $100 million in funding for people looking to design iPhone applications.

Rebecca Smith is co-founder of Micromat, which designs the repair software that Apple includes with its extended three-year warranty.

Micromat is developing a security program for the phone, but the company didn't want to release too many details.

"It's an application that will make you feel more secure about carrying your phone everywhere you go," Joseph said. "Because it's not just your phone you take, it's your documents, it's your notes, it's details about your financials . . . it's a mobile computer in your pocket that just happens to have a cell phone chip embedded on it."

Smith co-owns another Santa Rosa company, Soft77, which is also designing an iPhone program. It will let doctors and lawyers record audio memos and then securely send encrypted versions for transcription. It's a big market opportunity, she said.

"I know so many people who use voice memos. And people carry their phones everywhere," she said. "It's a new world."

You can reach Staff Writer Nathan Halverson at 521-5494 or nathan.halverson@pressdemo

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