India's mobile app market
Indian mobile application (Apps) market is booming. Many people predict that the market could reach $4 billion this year and $20 billion by 2015. The interesting fact is most mobile apps are designed for the Indians market rather than for export. Apps cover everything from checking transport fare to how to put on a sari etc. Mobile apps market start from few cities in India then spread to the entire country and continue to grow larger. Today creating mobile apps is seen as a new way to make money in India.
According to a local survey, I just less than three years, India already has over a thousand mobile apps companies and the list continue to rise each day. In a small room of a house near Mumbai is the offices of Spiel Studios where a dozen young men work intently at their computers. Some are designing cartoon characters to star in their latest mobile game; others are working on complex software codes. The company is specialized in mobile game for customers in India but it is planning to sell their games around the world too. It started in 2007 by Mohit Sureka, who was 22 years old at the time. He said: “When we started, this industry did not exist, mobile apps development was not considered as a business. Most Indian developers preferred to work for outsourcing market such as coding and testing for customers in the U.S or Europe. It opens opportunity for us because of less competition so we could grow fast. I started with five people but now have over hundred and if the growth rate remains the same, I could have thousand by next few years. Not long ago, I had to borrow money from family and relatives for my company, now there are many investors who are willing to invest in our company because mobile app development is making money, a lot of money."
Ajay Harikrishna, another 20 years old company owner said: “Mobile app is relatively simple; it does not need a lot of trainings. Anyone can learn to develop mobile app in few weeks. I started my company when I was in high school with few friends but when they went to college, they quit. So I hired young people who were too poor to go to school and trained them to be mobile app developers. The word spread throughout the slum that it is possible to earn $5 dollars a day, which is much better than other manual jobs that existed in the slum. More than that, they can work indoor with a computer instead of looking for craps in the garbage heap, and under the heat of the sun. Since my company is located next to the slum, I have no problem of hiring these young people. My company specializes in graphic details, especially for game companies because they need people who can work with details. Graphic work is difficult as it requires intensive concentration and most educated software developers do not want to do it. However in the slum, it does not matter, it is ten times; hundred times better than garbage works. When asking for revenue, Ajay refused to disclose for fear of government tax people. However, he admitted that it is somewhere in few million dollars each year.
The major change in the industry is the growth in the ownership of smart-phones worldwide. As more people switch from mobile phone to smart phones, the demand for smart phone apps is increasing and many Indian companies have been able to expand globally by opening offices in the US and the UK to develop more apps for their customers. With lower costs and a large pool of skilled workers in India, many can be trained quickly in few weeks, these companies can grow quickly. Today many global companies are looking at India for more apps production.
However, with more smart phone users in India, the domestic app market is also booming. According to the study, the current value of the Indian mobile app services industry was estimated at $3.8 billion dollars in 2011. This is a big surprise to many well established outsourcing companies because they never think that mobile apps can make that much. Even when smart phone become more popular, most of these companies do not think that there is business in that “small market”. A company executive lamented: “When an app sells for less than a dollars, how long does it take to make money? Because of that thinking, we ignore this market and allow small companies to grab the market share until too late. Now we know that an app may sell for a dollar but with several million downloads, it means big money.”
Data from India suggest that the number of smart phone user in India could reach several hundred million in the next five years. One in three people who have laptops also have smart phones and they will buy mobile apps for their own use and India could export their apps to users in other countries. Today the mobile app industry is expected to earn between $10 billion to $20 billion dollars within the next five years.
Of course, many mobile apps in India are being made for the Indian market. There are thousands of applications available to teach you how to cook a curry dish or wear a sari the correct way. Some allowing users to check for bus or train schedule, and many companies offer games, movies guides, and even astrological chart. With about over 100 million smart phone users, it is still a relatively small proportion of the country's 1.4 billion population. However with over 858million mobile phone users, the number of people switching to smart phone is rising fast. Judging by the population, India domestic market of mobile apps will be huge. If this market can expand to neighboring countries then the market for apps will get much bigger.
Sources
- Blogs of Prof. John Vu, Carnegie Mellon University
