Phone
“Its not about 99-cent apps,” Kevin Talbot, head of RBC Venture Partners and co-managing partner of the fund, said in an interview in Toronto. “Somebody coined the phrase that a lot of people are making a little bit of money and only a few people are making a lot of money. Our job is to find the few that are making a lot of money.”
Developers are vying to produce applications that resonate with customers. Software offering more games, faster news, improved e-mail and better Internet searches is becoming more important in choosing among RIMs BlackBerry, the iPhone from Apple Inc. or a rival device, said Matt Thornton, an analyst at Avian Securities LLC in Boston.
“Applications are becoming a big differentiator for Apple and business users are increasingly aware of applications available on the BlackBerry to improve productivity,” Thornton said. He has a “positive” rating on RIM.
BlackBerry Fund
The BlackBerry fund focuses on more practical applications, like e-mail management software and business-travel guides, while another fund, the $100 million iFund run by Menlo Park, California-based Kleiner Perkins Caufield & Byers, invests in iPhone software aimed at consumers.
“Were looking for the biggest and best ideas and best teams and entrepreneurs and those right now are squarely centered on consumer-facing applications,” iFund manager Matt Murphy said in a telephone interview. “Thats the first frontier thats being cracked here.”
The BlackBerry funds investments include Xobni, a startup that makes software designed to manage and search e-mail contacts. The basic version of Xobni — inbox spelled backward — is free; an enhanced version costs $29.95.
Other investments include Neuralitic Systems, a firm that analyzes wireless data; Buzzd, a mobile-phone city guide; travel application WorldMate; and Digby, a program that enables purchases from a handset.
RIM, Thomson Reuters Corp., and RBC Venture Partners provide half the money for the BlackBerry fund, Talbot said. The remainder comes from Toronto-based JLA Ventures and individual investors. Talbot didnt disclose how much has been put into each startup.
RIM, based in Waterloo, Ontario, declined requests for an interview on the fund.
IFund
The BlackBerry maker is due to report fiscal second-quarter results tomorrow. Analysts in a Bloomberg survey predict sales of $3.63 billion, on average, a 41 percent increase from a year earlier.
Two of the iFunds biggest investments are GOGII, a text- messaging application, and ng:moco, a publisher of iPhone games. Among six other investments to date are social-networking application Pelago and Booyah!, a game designer.
Kleiner Perkinss business partners finance the iFund, Murphy said. He declined to name any investors. Apple, based in Cupertino, California, provides strategic advice, but no money.
The managers of both funds agree that the shift from a reliance on ordinary mobile phones and computers to Web and e- mail-equipped handsets is just beginning.
Sales of smart phones climbed 27 percent worldwide in the second quarter as mobile-handset sales overall dropped 6.1 percent, according to Stamford, Connecticut-based Gartner Inc.
“Things are going to get a lot more interesting over the next couple of years,” Murphy said.