New Delhi: Last July, when Apple Inc. threw open the doors of its iPhone App Store to third-party developers, a Silicon Valley start-up immediately contacted Net Solutions India, a Chandigarh-based software shop. “This was one of our regular clients, and he was very excited,” says Maninder Bains, chief technology officer of Net Solutions. “But even if he hadn’t said so himself, we’d already realized that iPhone applications would be big.”
Bains was right. The iPhone’s applications—or “apps”, essentially small programs of utilitarian or novelty value designed for the iPhone—have spread with epidemic efficiency in the US. But they have also held out a slim lifeline for small and mid-range software firms in India, at a time when other outsourced projects have succumbed to the slowdown.
“The recession has had its effect, and we’ve all seen some decline,” Bains admits. “But as I told my boss just the other day, there are three things that are making money for us. The first is iPhone apps. The second is also iPhone apps. The third is Facebook apps.”
Utility app: Rapidsoft Technologies’ Palak Biswas with an iPhone. Madhu Kapparath / Mint
This month, Apple’s App Store turns a healthy one year old. The store has now grown to include at least 65,000 apps, which have collectively been downloaded 1.5 billion times. Its growth has been meteoric; as recently as April, the Store listed 25,000 apps. Many of these apps are free, but of the paid apps, Apple stands to earn $150 million (Rs726 crore) a year via its 30% commission, according to an analyst recently quoted in The Wall Street Journal.
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As if the iPhone’s cult status were insufficient, the apps have given Apple an even keener competitive edge over other smart-phone brands. Research in Motion’s catalogue of apps for its BlackBerry phones includes just over 2,000 programs; Google’s Android Market offers around 6,300. So, not surprisingly, advertisements for the iPhone now regularly pitch its gigantic app factory as part of—or even all of— their hard sell.
That first product Bains developed was, in fact, not an app; named Mobclix, it was a product that helped monetize and analyse traffic for other apps. Since then, Net Solutions has created Landmark Locator—which, in locating landmarks around iPhone users, does precisely what its name suggests. Another app, promisingly titled Hook Up, scours the immediate vicinity for other people to “connect” with; a sample screenshot on the Net Solutions website, for instance, introduces us to the intriguing “Angela, 21… Love to have fun and play with my cat”.
Other Indian firms have been more fertile. An Ahmedabad-based company named IndiaNIC claims to have developed at least 600 iPhone apps. “Even when the store was in beta, we thought this would be a good market to jump into,” says Shalin Shukla, a senior business development executive who focuses exclusively on the iPhone market. Nearly one-fifth of IndiaNIC’s workforce of 250 is engaged in app projects for clients in the US, priced “anywhere from a few hundred dollars to around $10,000, depending on the complexity”, says Shukla.
These firms’ customers are often companies looking to move their Web applications onto a mobile platform, but just as often they are individual entrepreneurs, looking to milk the cash cow that the App Store can be. Famously, a developer named Steve Demeter made $250,000 within two months of thinking up a game app called Trism, involving alignments of coloured triangles. Another developer, Ethan Nicholas, earned $800,000 in five months—as well as a profile in The New York Times—with a simple shooting game.
But for every Demeter or Nicholas, there are dozens of developers who can only watch their apps sputter and die. In that sense, the iPhone app is, for its owner, no sure bet. “I guess people are taking the risk because, if you compare it to the huge potential pay-off, it appears to be win-win,” says Palak Biswas, head of business development at the Gurgaon-based Rapidsoft Technologies.
Even as “big-revenue projects” were being postponed or cancelled, Rapidsoft developed and released nine iPhone apps for customers overseas; the most expensive was priced at roughly $25,000. “Utility apps, such as our planner-scheduler, will always do well,” Biswas says. “For three of our apps, instead of selling them outright, we’ve even entered a revenue-share model, because we thought the idea was a good one.” Rapidsoft thus makes a percentage of each download fee.
Jumping into this market last July, when it was still mint-new, came with benefits as well as difficulties, Biswas observes. “Leaving aside the iPhone, when you develop a mobile app, you need to think about three or four platforms, because none of them individually has the market reach of the iPhone,” he says. “Developing just for the iPhone alone, with its user base of close to 15 million in the US, is easier and cheaper.”
But firms also had to scramble to get acquainted with Apple’s software development kit, as well as the Objective-C programming language used for the iPhone.
“Initially it was a little tough, because there wasn’t much help or support available with the kit,” says Rajish Nambiar, CEO of the Bangalore-based SeQ Softech, which is fabricating its first app, a supply chain widget.
Nambiar is optimistic about the app, and he thinks SeQ will develop more iPhone apps in the future—“perhaps in the medical line, personal healthcare, something like that”. But he isn’t thrilled with Apple’s commission model. “It’s funny, because you do all the hard work, you promote the app, and they then take 30%,” he says.