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Luke Lockhart, co-founder of PopHire and William Lam, founder of Date Ideas, seen in their downtown Toronto workplace, are two of many recent tech start-ups. (SARAH DEA/SARAH DEA/FOR THE GLOBE AND MAIL)
Luke Lockhart, co-founder of PopHire and William Lam, founder of Date Ideas, seen in their downtown Toronto workplace, are two of many recent tech start-ups. (SARAH DEA/SARAH DEA/FOR THE GLOBE AND MAIL)

Canada's app developers in sweet spot as world goes mobile Add to ...

On a recent fall day, a courier ran across an airport tarmac in Idaho, his hands carrying a box of computer servers from IBM. For Ted Livingston, this delivery was a genuine business emergency.

Mr. Livingston is a university dropout in Waterloo, Ont.. A year ago, he started a small software company called Kik Interactive Inc. Today, it is still small - just 12 employees - but has suddenly gained cachet as the designer of one of the hottest software products for smart phones.

The software application, or app, lets users of any major smart phone "chat" with one another - that is, exchange messages by text, in real time - much the same way BlackBerry users converse on the widely used BlackBerry Messenger. The concept was simple, but even Mr. Livingston could not have anticipated its popularity. In the two weeks after it was launched in late October, more than one million mobile users signed up for it. Whoopi Goldberg even gave it a mention on The View.

So quickly were new users downloading Kik Messenger that its servers, the hardware that helps run websites and applications, were at risk of crashing under the pressure - hence the urgent order to IBM to deliver the goods to Idaho, where Kik rents space in a data centre. "We were starting to see 300,000 new users in a day," says Ted Livingston, a computer engineer who quit the University of Waterloo last year. "Waiting three days to get a server was just too long."

Since the death of Nortel Networks, the Canadian tech industry has been on search for the next big thing. But the next big thing, it seems, is small. Canadian Tech 2.0 is being built on the single most important trend in technology today: The world is going mobile.

The desktop computer, which turned Microsoft Corp. into the biggest technology firm in the world, is giving way to the smart phone and the tablet computer (and a new top dog, Apple Inc.). Software programs, sold in boxes, are being replaced by apps that can be downloaded in seconds. And all of this is happening at unprecedented speed. It took 60 years to sell a billion television sets. It's expected it will take only 10 to sell the same number of smart phones. The PC is not dead, but its era of dominance is clearly over.

As a result, the playing field is being reset on the entire technology industry - and at the moment, that's to Canada's advantage. Small, nimble app developers and startups are popping up all over the country, fuelled by a small but growing pool of venture capital and helped in no small part by the presence of Research In Motion Ltd., one of the world's biggest makers of smart phones.

RIM's hometown of Waterloo has been the centre of the action, of course. But Toronto, with its booming mobile developer community, its large university population and its role as the centre of Canadian finance, is giving Waterloo a run for the title of Silicon Valley North. Through the ascendance of mobile, Canada's technology industry has the opportunity to start punching above its weight, at last.

ON THE 44TH FLOOR of the Brookfield Place tower in downtown Toronto, John Albright and Kevin Talbot gather in a boardroom to explain how they plan to take on the world.

The two men are co-managers of BlackBerry Partners Fund, a venture capital firm backed with money from RIM, Royal Bank of Canada and Thomson Reuters. With $150-million under management, BBP claims to be the world's largest independent venture capital fund focused solely on mobile technology.

Until now, the firm has invested only in a handful of startups outside North America. Today, it's opening offices in Asia, the Middle East and Europe, hoping to capitalize on what Mr. Talbot describes as the "Wild West opportunity" of what is potentially the most lucrative segment of the technology business today.

"All our focus going forward will be on mobile," he says. "In mobile, geography is meaningless."

His optimism is grounded in several facts. App developers also have a cost advantage over traditional software makers. The online application stores set up by Apple, RIM and Google Inc. provide a ready sales outlet - no trucks, no physical distribution network. Even the cost of renting space in server farms has plummeted.

But the most important factor is that consumers are adopting smart phones faster than almost any other type of gadget in history. So the gold rush is on.

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