McCombs School of Business
Exchange Magazine 2009

Matt Knopf, MBA '99, at the Macworld Expo in January 2009

A Digital Gold Mine

Developers rush to cash in on the iPhone application craze

by Tom Gerrow

1 | 2

SnapDat: An application with personality

The idea for SnapDat, a contact-sharing application for the iPhone, originated after Chris James, MBA '99, misplaced the business card of a valuable contact. While the business card eventually turned up, it spurred James and SnapDat co-creator Matt Knopf, MBA '99, to start thinking about how to better share and organize contact information.

Then came the introduction of the iPhone 3G, which, combined with the launch of Apple's App Store, motivated James and Knopf to actually begin work creating a better contact-sharing solution for this new platform.

"While there were no other contact-sharing applications on the App Store when we were developing SnapDat, we knew there would be so we wanted to make sure we offered something unique," Knopf said.

James and Knopf decided to differentiate their application by giving users more control over how they present their contact information. The application lets users easily exchange personalized "SnapCards" and also supports sending vCards to those without an iPhone or the SnapDat application.

While these functions complement traditional business cards, SnapDat also takes contact-sharing a step further. Users can create multiple SnapCards for different situations, whether personal or professional, and can opt to make them public (so they can be forwarded) or keep them private. Once a SnapCard is on file, users can make a call, map an address, send an e-mail or visit a contact's social networking page directly from their mobile device.

"Everyone has a unique personality, and our long-term goal is to have a card design for everyone," Knopf said. "Applications that just transmit information will miss out on the personalization aspect. If they don't offer personalization, they are missing a potential revenue stream."

A recent confluence of technology and entrepreneurship has created the digital version of a gold rush: a few fast movers quickly rake in large amounts of cash and in the process inspire eager legions to stampede in their footsteps in the hope of also striking it rich. Sound familiar?

This time around, the technology is Apple's iPhone which, when combined with the iTunes App Store, has led to an explosion of independent mobile application development. The App Store opened in July 2008, with about 500 applications. Today Apple says there are more than 15,000 applications available in 20 different categories, from games to education and productivity to social networking. Many are free, and most others charge a modest fee of a dollar or two (though some cost significantly more).

While free is a hard price point to beat, few people will quibble over spending a buck to add some cool functionality to their iPhone. And with more than 500 million downloads from the App Store in a little more than six months, those bucks have the potential to add up fast for a popular application.

Shifting Power to Developers

SnapDat, a social networking application, is hoping to emerge a winner in this popularity contest. CEO Chris James, MBA '99, and Chief Marketing Officer Matt Knopf, MBA '99, created SnapDat to allow users to exchange personalized digital business cards, organize their contacts and populate their iPhone address books. Currently a free download, it offers a variety of design templates in styles ranging from casual to professional.

"The convergence of capabilities in the smart phone market, particularly with the Apple iPhone, created a new opportunity for us," James says. "The iPhone's advanced graphics, intuitive touchscreen interface and high-speed connectivity made it an ideal platform to launch SnapDat. Prior devices hadn't combined these capabilities quite like the iPhone did."

But just as important as the technological prowess of the new iPhone was the launch of the App Store, which really kick-started mobile application development for the device.

"Apple transformed the distribution of mobile software," James says. "They offered a centralized location for users to download software on-demand. That direct-to-consumer distribution platform transfers power from the carrier to the development community. The evolution of the smart phone into a viable platform and the centralization of software distribution are a large part of why you're seeing this emergence of mobile startups."

Technology vs. Privacy

Moximity, based in Austin, is another company entering the iPhone fray. Its free application is a location-based service (LBS) that integrates with online social networking sites Facebook and Twitter and helps users better manage their social lives while on the go. Location-based services, a hot area for developers, deliver content based on the geographic location of the mobile device.

"We believe these applications will fundamentally change how individuals use their mobile devices," says Bryan Jones, MBA '05 and CEO of Moximity. "Individuals will be able to recreate their own environment on these portable devices, instead of going to Web sites and browsing, you will use applications. Moving away from mobile browsers to mobile applications is a significant shift - it recognizes people don't use their mobile devices the same way they use their computers."

As they take advantage of the pocketful of technology that is the iPhone, developers often grapple with new challenges. Location-based services, for example, can offer users many benefits - but there are also some potential downsides.

"On the LBS side of things, there is a fascinating interplay," Jones says. "There is so much value in knowing where you are in relationship to driving directions, nearby retailers or where your friends are. At the same time, that information is personal and has the potential to impinge on someone's privacy."

Moximity addresses these concerns by giving users control over how and when they update their location information to social networking sites.

1 | 2

Top Stories

Departments

Comments?