Emerging iPhone after-market estimated to be worth one billion
For most of us who started our business careers before the advent of the WWW, the dizzying rates of speed at which new industries emerge, peak, and then fade away is mind-boggling. The historical norm of industry arcs spanning 50 to 100 years or longer has been replaced by ones of typically 5 years. Does anyone recall the war of the giant search engines in the late 1990s? There was Lycos, Infoseek and about 4 or 5 others whose names I can't remember anymore vying with Yahoo and Google for dominance.
Now just 3 months after the launch of the iPhone, we already have a rapidly emerging industry consisting of third parties supplying games and other paraphernalia. Here's a quote from a recent Dow Jones article titled Investors eye iPhone start-ups :
Under the right conditions, the iPhone's ecosystem of third-party companies and software developers could equal the one surrounding Apple's iPod lineup of media players, [Jim] Sterling [of Sterling Marketing] believes. There's an estimated $1bn in sales annually of iPod add-ons.
So it looks like investors, including those fickle venture capitalists, are salivating over this market which is great news for startups.
Not only that, but we are starting to see mergers & acquisitions activity in the space. German software vendor, Shape Services GmbH, is acquiring New York City based iPhone Applications List. The company's founder was approached by multiple suitors before accepting the Shape Services offer.
There's anecdotal evidence suggesting the investment community's interest in iPhone-related companies is relatively strong now. iPhone Application List founder Steve Schopp said Shape, based in Stuttgart, Germany, was one of three potential buyers that approached him.
And as usual, we are seeing small players outshine the major players in terms of creativity and quality. Since a picture is worth a thousand words, let me illustrate this point with illustrations of iPhone Blackjack games from giant Yahoo and tiny MyNumo which appears to be emerging as the leader in iPhone games.
and The Beast
Click to embiggen.
So there you have you it, the trifecta of money-making opportunities: emerging technology, intense investor interest, and M&A activity. It doesn't get any better than that. Ladies & gentleman, start your engines!