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Buzz called akin to iPhone's debut
New iPad may fuel 'gold rush' for app makers
Buzz called akin to iPhone's debut
By Bill Shea |
About the iPad

• Uses iPhone operating system.

• Uses a multi-touch screen with landscape and portrait modes.

• Has a virtual keyboard and physical keyboard dock.

• 16 GB of memory, 32 or 64 GB of storage.

• Wi-Fi equipped, Bluetooth capable.

• Comes with iTunes, App Store.

• Includes the iWorks suite of productivity apps.

• Doesn't have a camera, non-Internet telephone capability, removable battery or removable storage and can't run Adobe Flash animation.

• Cost: $499 to $829. Monthly data charges are $14.99 to $29.99.

• AT&T wireless data plans.

• Will become available in March (3G-equipped models in April).

Consumer desire for Apple Inc.'s new iPad multi-touch tablet computer is expected to be driven in part by applications, potentially fueling new revenue streams for metro Detroit's growing app developer community.

“We definitely are looking at it,” said Greg Schwartz, founder and CEO of Mobatech L.L.C., a virtual tenant in the Ann Arbor Spark incubator since May 2008.

The company has apps already in development for Apple's iPhone and has some on the market for mobile smart-phone maker Sony Ericsson; service providers T-Mobile, Sprint, Boost Mobile, Orange, BlackBerry AppWorld and independent mobile app stores Handango, Movaya and MobiHand.

“We think there will be a lot of similarities with iPhone,” Schwartz said, adding that he expects some iPad apps to launch in as quickly as 90 days while others can take up to six months.

Mobatech is part of Apple's app developer program and was getting access to the iPad's app technical documentation on Wednesday, with personal accounting and calendar apps in mind.

Schwartz said Apple's cachet in the technology device universe could help it build a market where none currently exists for the iPad.

“The buzz and buildup is similar to iPhone,” he said.

After years of speculation, Cupertino, Calif.-based Apple unveiled the iPad in San Francisco on Wednesday, creating a new type of device for what it believes is a market between laptops and the 75 million iPhones and iPods the company has on the market.

“We think it's going to be a whole other gold rush for developers as they build apps for the iPad,” Scott Forstall, Apple senior vice president of iPhone software, told reporters Wednesday.

Stamford, Conn.-based market research firm Gartner Inc. estimates that mobile app revenue will reach $6.7 billion this year compared to $4.2 billion in 2009 last year. By 2013, it could hit $30 billion.

More than 3 billion iPhone and iPod Touch applications have been downloaded from Apple's App Store in the past 18 months, the company said in a statement on Jan. 5.

More than 140,000 apps are available from the store.

Apps — which include games, social media, shopping, utilities and more — are typically priced at 99 cents, but many are free while others can cost more than $10. That means developers deal in volume.

Apple will use the same revenue model for iPad apps as it does for the iPhone: It keeps 30 percent of all app sales while the developer retains the other 70 percent. Apple doesn't charge developers for free apps.

Ben Kazez will be prospecting for that app gold.

He moved his tech-based startup Mobiata L.L.C. from Northfield, Minn., to Ann Arbor last summer and has created mobile apps for the iPhone.

Mobiata's apps include FlightTrack and FlightTrack Pro, which track flights worldwide, providing gate information, itineraries and delays. They retail at $4.99 and $9.99, respectively, and have generated more than $1 million in revenue.

While specific apps were obvious for the hot smart phone market — the Apple 3G iPhone was the No. 1 U.S. mobile phone in sales between January and October, according to a December report from The Nielson Co. — the iPad doesn't have as clear a role. Application developers like Kazez are brainstorming what consumers and the business community will do with the device.

“People still need to figure out how they'll integrate it in their lifestyle,” he said. “Why is this useful and how is it more powerful than the iPhone and more portable than the laptop?”

A desire to have several devices in one might be the key, he said.

“It's a much newer concept than the cell phone. The iPhone is still a cell phone,” he said. “The trend is for fewer devices that do many capabilities at once.”

Device convergence also will fuel device competition.

Hewlett-Packard Co. and Dell Inc. are expected to introduce slate-style computers or tablet e-readers on a Microsoft platform.

Online retail giant Amazon.com has announced it will open its Kindle e-reader to application developers. About 1.5 million Kindles are on the market, and Apple said it is challenging Amazon with the iPad's e-reader capability, which targets books, magazines, newspapers and other print media.

The Detroit Free Press and The Detroit News, which have deals to provide their content to Amazon's Kindle and Mountain View, Calif.-based Plastic Logic's QUE e-reader, also plan to get content onto the iPad, said Rich Harshbarger, the vice president of consumer marketing for the Detroit Media Partnership that oversees the joint business functions of the newspapers.

Some who engage in mobile device marketing are cautious about the iPad because of its $499 to $829 price and the lack of an established market.

“I don't think I'd change strategy for most clients based on the tablet yet, not at least until I can see some adoption numbers. There's some concern that the high price point will discourage adoption,” said Jim Tobin, president of Ignite Social Media L.L.C., a social networking consulting service that's a subsidiary of Birmingham-based Brogan & Partners Convergence Marketing.

Others are outright skeptics, such as Elliot Soloway, professor of computer science and engineering at the University of Michigan, who teaches a course on mobile app development. He's also CEO of a K-12 educational productivity apps company, Ann Arbor-based GoKnow.

“There is no need for what they're producing,” he said. “The hope is it creates a whole new market. My feeling is they're wrong.”

But even if the iPad is Apple's Edsel or New Coke, it will be a boon for some time to app makers, who are expected to play an integral role in the device's success.

“I think there will be a spurt of app development. (Apple is) betting that spurt will fuel the need. It is the developer community that will create the need,” said Soloway, whose classes have 50 students.

“I see these kids doing absolutely amazing things,” he said. “They can create software in 48 hours and people will buy it in 48 hours.”

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