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Indian outsourcing and the iPhone apps boom

Bloomberg  |  Mumbai 

Between piles of trash and stray dogs near a Mumbai slum is the entrance to Pvt, where two dozen workers sit shoulder-to-shoulder with no air conditioning and write codes for iPhone apps on laptops.

“The rates Indian developers charge are very low,” said Akash Dongre, chief operating officer at MoFirst Solutions, where clients pay as little as $15 an hour for a programmer.

MoFirst is tapping India’s next wave in outsourcing, with thousands of programmers that charge a fraction of Silicon Valley prices to capitalise on demand for programmes for Inc’s iPhone and devices running Google Inc’s Android software. Developers-for-hire for mobile applications may generate $5.6 billion in revenue by 2015, a 14-fold jump from this year, Forrester Research Inc estimates.

“India is a logical place to do it for the same reason the software and services model has worked here: lower cost,” said Anshul Gupta, an analyst at research firm Gartner Inc in Mumbai.

Applications on Apple’s online store have been downloaded more than 15 billion times since its opening in 2008 —with the Cupertino, California-based company getting a 30 percent cut on each sale—as the surge of iPhone sales spawned demand for games and applications. “It’s not about the device —that’s not what makes sales happen—it’s about the ecosystem,” said Gupta. “You need to have applications.”

Largest App Outsourcer
Companies or individuals seeking to hire can turn to sites such as Elance Inc’s service, where companies such as MoFirst will bid to win app-development projects lasting from a couple of weeks to several months.

India is the world’s largest recipient of outsourcing orders, according to Elance, whose website showed more than 450,000 professionals offering their services as of yesterday.

Requests for programmers who write code for Apple’s iOS platform rose 20 percent in the second quarter, according to California-based Elance. Demand for programmers with Android skills rose by 15 per cent, while developer requests for Research In Motion’s devices increased by three per cent, according to the company.

“The iPhone stuff is very, very hot,” said Ajai Shankar, who spent 12 years in the US as a software writer and moved back to India this year to embrace the app-outsourcing boom. “The struggle people have nowadays, is that once you’ve developed an application for iPhone, the next thing you know is you have to do the same for Android.”

Pricing Edge
Indian developers may have the edge in pricing. MoFirst bills clients in the US, the UK and West Asia $15 to $20 an hour, compared with the $50 to $100 charged by developers in the US, said Dongre, who has a mechanical engineering degree from the Indian Institute of Technology, Bombay.

Applications MoFirst recently developed include Friends Aloud, an audio feed it created for a Texas-based entrepreneur, and Producteev, a task-management tool, for a New York-based client, he said.

MoFirst’s competition includes Qburst Technologies, which started in 2004 as a Web developer in the southern Indian town of Trivandrum. The company, which employs 400 people, may increase hiring after revenue from websites and iPhone apps jumped 76 per cent to $3.18 million last year, said Manjith Kamalasanan, a business development manager at the company.

Evolving Industry
Qburst has helped develop 150 mobile apps for customers in the UK and the US. That includes an iPhone app for UK-based PrivateFly, which allows users to search for and book private jets; an e-commerce iPad application for Simba Toys, and an iPhone shopping search application for thefind.com. Offering cheaper software than in the US and Europe has worked in India before.

First Published: Thu, August 25 2011. 00:47 IST
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