Kleiner Perkins Caufield & Byers announced Thursday a $100 million venture fund that will backstartups developing applications for Apple Inc.'s iPhone and iPod Touch.
KPMG will manage the so-called iFund while Apple will provide market insight and support, the VC firm said.
Coinciding with the announcement was Apple's release of a software kit that will enable third-party developers to write applications for iPhones. The application programming interface, or API, will grant developers access to the iPhone's address book, some databases, and location information to create location-aware applications, as well new video and audio capabilities, 3-D effects and an embedded version of graphics technology OpenGL, according to a story on the MacWorld website.
The move mimics that by Facebook Inc. to open its API, spurring an avalanche of new applications being built, and transforming it from a social network into a platform. The move also prompted venture firm Bay Partners to start a seed fund dedicated to startups making applications for Facebook.
The iPod has a virtual stranglehold on the marketplace for digital music players, with the latest version--the iPod Touch--featuring Wi-Fi capabilities that allow users to connect to the Internet. Meanwhile, the iPhone has enjoyed big success since its launch last year, as competing players all race to come up with a similarly winning product.
Apple has said it expects to sell 10 million iPhones in 2008 alone, which would enable the company to meet a goal of claiming 1% of the world's handset market by the end of this year.
Kleiner Perkins partner Matt Murphy will head up investments from the new fund ,joined by John Doerr, Bill Joy, Randy Komisar, Ted Schlein and Chi-Hua Chien. Investing across all stages, the vehicle will focus on areas including location based services, social networking, commerce, communication and entertainment. -- George White
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Why the lukewarm reception to this news by Wall Street? The day of the announcement, AAPL stock actually took a small hit.