Monday, February 8, 2010

Where the money is: VCs target app developers; In-Stat predicts 50 million tablets within four years

While Reed's In-Stat group predicts a rapidly growing market for tablet readers, VCs are beginning to put money behind the new devices by funding application developers.

In-Stat, a Reed Business Information group, predicts that the tablet reader market will grow to 50 million units by 2014. Their report, "The Rise Of The Internet Tablet: The Keys To Success" (paid report), states that "the opportunity in tablets is complementary to other mobile devices, particularly smartphones and netbooks."

Meanwhile, a new investment fund, AppFund, is putting real dollars behind application development for the iPad and other devices. Launched by Kevin Wendle, co-founder of CNet, and Daniel Klaus, co-founder of Music Nation, AppFund is promising to invest $5,000 to $500,000 in each developer (I assume the developer that promises to deliver the next flashlight app would get the smaller amount, while someone who can come up with an app that can transform your tablet into a time machine might get the larger amount).

According to their web site AppFund knows what it wants:

We are looking for Apps that will become utilities in everyday life and Apps that will help business grow. So priority will be given to ideas that:
    •    Target early adopters and urban dwellers
    •    Target users 16-39 with higher incomes
    •    Incorporate video, audio, interactivity, and other capabilities unique to the iPad
    •    Have a long shelf life
    •    Have the potential to become "hits"