Are you sure?

Tapping into the market of iPad apps

Larger players of the Hungarian software developer market have been late in entering the market of creating applications for Apple’s iPhone and iPad, leaving them a few steps behind their smaller peers and individual developers. However, it is now the smaller designers that find it hard to keep their foothold, as they fight a losing battle against major players who have more financial resources to develop successful and competitive products.

Major developers have still not started developing applications for iPads or iPhones in large numbers. Zoltán Szilágyi, director of business affairs at Hungarian software developer NNG told the Budapest Business Journal that developing apps for iPhones and iPads is not the company’s main strategic business line, since it cannot compete with the free products offered by Google-sized companies, and they are instead focusing on other exploiting other market niches. Szilágyi said that NNG launched an iPhone application a year ago, and is now considering rolling out different versions of it for various niche markets, such as truck navigation, but the project is still in the preparatory phase.

Big Fish, another software developer, also said that it has not yet started targeting this market. Project manager Csilla Szigetvári noted that there have been no orders so far for iPad or iPhone software products, therefore Big Fish is not developing any apps at the moment. It seems that since the iPad arrived to the Hungarian market only a short while ago, software developers have only just started planning their activities in this field.

There are some pioneers out there however who have started extensive work in this area and have high hopes for the iPhone and iPad markets. Tibor Kulcsár, the managing director of stock exchange-listed developer KulcsSoft,  said that his company has been developing software for the Apple products for months. KulcsSoft has designed iPad applications for all the media products of a major publishing house.

Kulcsár believes the iPhone and iPad are the future, as these integrated communication devices encompass all communication channels. He is convinced that these devices will replace mobile phones, therefore they have huge business potential. Service providers will not risk lagging behind their competitors, so they are sure to invest in producing applications for the smart devices.

In a global market it makes no difference where the software is developed, Kulcsár explained. “The possibility of international distribution has opened the gates for a global marketplace, where the only decisive factor of success is competitiveness in terms of quality and price,” said the executive.

However, the opportunities seem to be limited for smaller and individual software developers. István Csanády, a freelance developer, explained that it is rather difficult to design an application on a limited budget that can make it into the top 100 applications of the App Store, Apple’s online store for applications – while around 90% of the money spent by App Store users goes toward these top 100 apps.

This is a rather high cost for individuals and small companies to bear, therefore it is not profitable to sell software through App Store that is not in the top 100, said Csanády. He explained that the iPad market has gone trough an overall transformation: while during the first 6–12 months it was easy to make it into the top products with a good-quality app, even for an individual designer, now larger companies have started to dominate the field.

Kulcsár however is of a different opinion: “a software does not need money, it needs an idea.” While there is indeed very tough competition on the market, if someone is talented enough and has a creative idea, he can become very successful. Csanády also admits that there are exceptional success stories: the iPad game Angry Birds – which has enjoyed extraordinary popularity – was designed from a very small budget.

The rest however have no chance, Kulcsár admits. He noted that KulcsSoft’s most successful product was designed with a budget of HUF 5,000, while there were other failed projects where the company invested a lot of money but saw no success, as the product was just not creative or good enough. Creativity is the key element of software development, Kulcsár confirmed: “success does not come from money, success comes from creativity.” (Anna Szaniszló)