Dear coders, you know the idea that's been marinating in the back of your mind for the last year or so? That thingy you think is so innovative that no one will be able to resist. The one which if only you could get in front of the right people would free you from the purgatory of your cubicle, let you finally tell your boss exactly where he can go stick his crappy IT job and make you the kind of money that allows for regular vacations in Tahiti? Well now's the time to go for it. If this sounds like a pitch for some get rich quick scheme, it is in a way. The latest trend for programmers with champagne wishes and caviar dreams is coming up with hot new applications for smart phones.

To help them the iFund, a $100 million investment pool, was created this year by Kleiner Perkins Caufield & Bythe. Its raison d'etre is investing in start-ups that dream up applications for the iPhone. Of the over 2,400 submissions the fund has received so far they have put money in just 5. Their investment in an idea ranges from as little as $100,000 to as much as $15 million. Average investment per application has been about 5 to 8 million. Whrrl, a free app from Seattle based Pelago, was the first to receive funding. The software combines the mapping abilities of the phone with recommendations from friends in a users network to create a Tomas guide of sorts for the social age. Say you need to find a decent sushi restaurant in the San Fernando Valley but all you know is the Westside. Just enter your location and you will see a list of dives that members of your networks have rated as the best. The app has creepy stalker potential because your friends can track your location making it much harder to lie about why you could not hang out with them.

Another beneficiary of the iFund's largesse is iControl Networks which makes the iControl application that allows you to look at live video feed of your home and do things like turn on the security system or the thermostat so it's toasty by the time you arrive. iControl is scheduled for release either later this year or early next. It is free but requires having an iControl network in your home. The company received $15.5 million to develop their software. One that received $5 million is Gogii which lets a user point their phone at an object and pull up information on it and another in the works is game developer Ngmoco.
iFund plans to take all the companies it's invested in public within 7 to 8 years. Pushing the wave of interest in mobile apps that is flooding Silicon Valley is the fact that there are over 3 billion mobiles in circulation and an increasing number of those are getting more sophisticated and capable of exploiting faster dater speeds. We are reaching a convergence stage where calling will be just one aspect of mobile devices as they become essentially palm held computers. Up till now the control over what applications and features showed up on a phone lay in the hands of the carriers making it virtually impossible for enterprising developers to get their idea to the market. Users basically bought a phone along with whatever programs the carrier had decided to load on it. But since the advent of the iPhone the game has changed and now with Google's Android mobile operating system looming overhead get ready for a tsunami of mobile centric startups.

In a recent interview with the Wall Street Journal, Apple CEO Steve jobs stated, "the phone of the future will be differentiated by software" a view shared by his competition. Gone are the days when mobile manufacturers tried to best one another with smaller sets or more buttons. Faster networks, GPS and more sophisticated chips have made it possible for a phone to do everything short of making you breakfast. In the short month since the launch of the iPhone App Store the tally of total downloads by iPhone and iPod touch users is north of 60 million. The store offers both free and paid programs. Understandably most folks (10 to 1) download the free apps. The total take from the App Store so far is around $30 million, 70% of which went to the developers with the balance being pocketed by Apple. Almost half of it went to the ten most popular programs like Super Monkeyball created by Sega, which has seen over 300,000, downloads at $9.99 each. If they can sustain this rate of $30 or so million a month the store could potentially rake in $360 million annually. Jobs envisions it reaching half a billion soon and maybe even a billion in the future. Ambitious but then he has never been accused of being a pessimist now has he? And with 10 million programs downloaded within the first 3 days he has no reason to be anything but positive.

There have been some potholes in the road like the recent kerfuffle over the "I am Rich" application which required a wallet that matched your ego. For $999.99 you received a gaudy spinning ruby on you screen. Apple pulled the program, which was not at all malicious, from the store. Their knee jerk reaction brought to light the doomsday device built into the iPhone operating system. This "kill switch" allows Apple to disable programs that pass the vetting process and go onto the store. If the company later decides the application is harmful it can reach in and kill it even after it has been downloaded onto a user's device. This would most likely happen during a syncing process where the phone is connected to iTunes.

The confirmation of a big brotherish kill switch opened a whole can of privacy concerns about just what the company could do with the info it collected. Think of all the things the iPhone is used for, music, photos, contacts, web surfing, email and downloads from iTunes and the App Store. Using this data Apple and its’ software developers could draw up a dossier on your habits that would put J. Edgar Hoover's FBI to shame. But they are not alone in this since other carriers routinely keep an eye over what programs are being used on their sets and some like mobile software seller Handango (which offers nearly 4,000 apps in its online store) remove games and apps that it deems to be in violation of another company's copyrights. Handango also knows which phone model customers use, what programs they purchase and routinely recommends related products. Microsoft (Windows Mobile) and Nokia both gather user info for marketing and development purposes and both have some type of kill switch albeit much more limited than Apple's. The App Store gives Apple an edge. The company already knows the musical tastes of iTunes users and because about 40% of iPhone customers download programs they will now also have insight into what games and utilities they prefer and the speed of a download would give them knowledge about the efficiency of the network. Using this they could more effectively churn out software updates, fix problems and develop features, things that previously required phone makers to gather info from their carrier partners or focus groups.

The blockbuster success of the iTunes App Store and initiatives like iFund has lit a fire under other mobile manufacturers and venture firms who are racing to establish development funds of their own. One such endeavor is the $150 million BlackBerry Partners fund from Canada's JLA Ventures and Research in Motion (RIM) maker of the most popular smart phone in the US, the BlackBerry. RIM says it is open to software created for other platforms not just their BlackBerry. Google hopes to encourage coding on its upcoming Android operating system by putting a $10 million purse put towards its Android Developer Challenge. So far it has received over 1,700 international entries. Among the finalists were a navigation app that uses street photos and a futuristic security program called BioWallet based on eye scan verification.

Mobile software distribution is still a work in progress with the App Store being the most successful model so far. While iPhone users just click on the App Store in their home screen others, like users of Blackberries and Windows Mobile smart phones, have to navigate a gauntlet to find software or log onto their carriers store to get an application. The straight up 70% cut of revenues that developers receive from their software takes the pain out of negotiating a financial arrangement with a mobile operator as is the case on other platforms like the Blackberry where a carrier can take as much as 50% of the proceeds. More programmers have been developing for the iPhone operating system because of the ease in getting the software out to customers and the phone's sophisticated features like touch screen and motion sensors which make for more possibilities but that could quickly change once Google's Android take its bow later this year. Competition to invent hot mobile widgets is getting intense and the potential financial payouts for successful applications means more and more coders are trying their hand at writing for the third screen. They are limited only by their imagination and available technology and they all have one thing in common, to make your phone more than the sum of its contact list.