
Is 2017 the beginning of the end for the app economy? - walterbell
https://thenextweb.com/contributors/2017/05/28/2017-beginning-end-app-economy/
======
ThomPete
There was never really an app economy in the sense of a thriving economy for
apps on the app store. It's always been a small fraction of apps that made it
and the rest not making any money. They could however go on for ever because
the cost of keeping them up is close to zero so it always looked like it was
way more successful and lucrative than it really was.

There is a much more successful app economy that's been around since the
inception of the personal computer which is doing ok. Some are SAAS apps
others are little tool apps like my own, even others are open source apps and
yet others are shareware.

In other words. As long as you don't define app economy only as what happens
on the mac app store then the app economy is doing ok and we haven't seen the
end of it.

However if you only think in terms of apple app store then I would say it's
never been there to begin with.

There are some larger trends I believe that renders the idea of apps as
products useless but that's for another topic.

~~~
increment_i
>> There are some larger trends I believe that renders the idea of apps as
products useless but that's for another topic.

I'd be interested in hearing your thoughts on this point. May as well expound
on it right here.

~~~
potatolicious
Not the OP, but I've been developing apps for years and agree with the
sentiment. A few thoughts:

There are, in my mind, 4 broad categories of apps:

\- 1: Games with microtransactions, think Clash of Clans, Candy Crush, Pokemon
Go, etc.

\- 2: Games without microtransactions (sold full-price), I honestly can't name
any right now.

\- 3: Apps tied to some kind of service not exclusively on the phone, think
Uber, Grubhub, Amazon, Gmail, Facebook. These are apps who are

\- 4: Apps that primarily provide value only on the phone, sold for money.
Think Dark Sky... and not many others that are still alive.

Categories #1 and #3 are alive and well, and I think will continue to be for
the foreseeable future.

Categories #2 and #4 are dead. The article says it's the "beginning of the
end", but I'd argue it's very close to the end of the end.

The trend I've been seeing is that apps in category #4 are not only failing
commercially, but also increasingly being pulled into the greater ecosystems
of apps in Category #3.

Instead of buying a standalone flight-tracking app, it's now integrated into a
travel company's app - think Expedia or Kayak.

Instead of buying a standalone weather app, it's now table stakes in either
the OS itself, or integrated into larger apps like Google.

Instead of buying a standalone package/delivery tracking app, it's now
integrated into a retail app, like Amazon or Wal-Mart.

etc etc, that's the trend I'm seeing. Apps-sold-as-standalone-products is
generally speaking dead, their ultimate fate is that their feature sets are
absorbed into apps/services that make Actual Money(tm).

~~~
woliveirajr
Perhaps dead, but #2 are the ones that I look for. I prefer to pay full price
and get a full experience than expend .99 cents so that my little one is able
to bake another batch of virtual cakes, then buy again in a week, then....

~~~
potatolicious
Agreed - I actually play little/no games on my phone/tablet because of the
current state of affairs. It's nearly impossible to find a game that isn't
just an abstraction of a slot machine.

Square/Enix has done well with some puzzle games - Tomb Raider, Hitman, and
Deus Ex all have turn-based puzzle games that are fun and priced on level
packs rather than some bottomless pit of microcurrency.

But they are the exception.

I think this is representative of a larger issue in gaming in general -
development costs have grown dramatically faster than sales, to the point
where the economics of game development have become marginal. Despite
blockbuster marketing efforts and millions of copies sold, many games have
trouble recouping their costs, not just in mobile-land, but also in
traditional strongholds like console games.

------
maxsavin
The more honest explanation here is that our industry is producing apps that
are junk.

Everybody enjoyed downloading apps because they got a kick out of them. Now
the industry is mostly pumping decaf.

~~~
Nr7
It's a similar phenomenon as the video game crash of the early 80s. Companies
flooded the market with hastily made shoddy games just to get a quick buck but
it resulted in nobody wanting to buy games anymore because most of them were
garbage.

~~~
erikpukinskis
Still waiting for that one to rebound. The vast majority of game developers
seem to be just remaking old games with new "content" in tired old genres.

Oh another game where you bleep an angry creature til they bloop and you get a
point. Great. Oh, I can upgrade my bleeper? Wow.

I think it's because the industry attracts people who are, for whatever
reason, avoiding meatspace activities. They get immersed in game industry
memes and then that's all they know. I see a game about farming and it's
like... Do you even understand what farming is like or why it's fun? But they
don't... They just re-make MineCraft with farming graphics because they don't
actually go out into the world and, like, farm. Do stuff. Understand what the
world is like. Because the people who like the world never left it, never
escaped to video games.

At this point I don't even play games any more, I just watch YouTube reviews
of them and spend my time designing games on my own.

I think it's a huge missed opportunity though, and when people realize it
there will be a gold rush on games that are actually about something.

~~~
sidegrid
Rebound? There are more games made in a year with diverse mechanics than could
possibly be played in a year. Itch.io, Kongregate, Steam, "IO games" like
agar.io, game jams, VR games... There's a lot of shitty games being made but
there's not a lack of good ones.

~~~
erikpukinskis
This one?
[http://store.steampowered.com/app/517190/Rebound/](http://store.steampowered.com/app/517190/Rebound/)

I am happy to find new places to look for good games... But I don't consider
"game jams" a serious suggestion, because they're not finished games. I think
lots of cool games get prototyped and never made, that doesn't contradict my
point or solve my problem.

I have spent a lot of time looking through Steam and it has resulted in my
opinion as stated. I have also looked at a lot of VR games and not seen
anything particularly outside-the-box reach the level of complete game.

I hope you are right, but telling me "just look for them!" isn't helping. I've
spent hundreds of hours looking. Can you give me more specific guidance? Or
narrow your list of suggestions to the ones that you think will help me find
finished games that aren't just rehashes of older, well trod game types?

I'm not saying games about something don't exist. I'm just saying they are
incredibly rare and the entire game industry could disappear and it probably
wouldn't affect the rate at which such games get made.

------
rusk
My take on this is that there are two factors contributing to this, and they
neatly fall upon the boundaries of the two major app ecosystems. I think these
issues are fixable, and I think big inroads have been made in the second.

Firstly, the Apple ecosystem, or the iOS ecosystem really - putting aside the
Mac Appstore for now - is fraught with overhead and bureaucracy. Bootstrapping
as a developer is relatively expensive given you need to have a modern mac of
some sort and you have to pay a subscription which I think cuts off some of
the hobbyists. Then once you're rolling, the amount of red tape involved in
testing, releasing, updating etc really is _shocking_. I'm involved in a
project where we support an App for both Android and iOS and really, 90% of
the work on the Apple end is managing all this bureaucracy. This is massively
expensive, and when asked for recommendations on another project I said _"
develop for Android first and then hire an agency to port it to iOS"_. The
amount of messing involved really makes this a specialist competency like
Solicitors' conveyancing or something and it really doesn't make sense having
your innovation team waste their effort on it.

Secondly then is the lack of quality control in the Android ecosystem. Aside
from a few established titles, the Play-store really is a crap-shoot in terms
of whether you'll get a good app in a specialist area or somebody just
chancing their arm. Like I say this has come along a good bit, but in my
Android devices I often just skip on Apps entirely because I really can't be
sure whether I'm installing something dodgy or not.

I do appreciate the irony that each ecosystem's strengths derive from the what
I pose as its weaknesses i.e. bureaucracy => better quality app store; open
submission process => lack of quality control. As both a producer and a
consumer however, I am just highlighting what I see as the key issues that are
limiting growth. It must be said I see ongoing improvements in the second area
though, but increasing impediments in the first.

~~~
ryanwaggoner
_Then once you 're rolling, the amount of red tape involved in testing,
releasing, updating etc really is shocking._

I've been doing iOS dev for seven years, and have launched dozens of apps for
organizations large and small, many of which had Android versions too.

I have no idea what you're talking about here.

Yes, you have to submit updates for approval, but it's quick and easy, and I
can count on one hand the number of rejections I've ever gotten, all of which
were easily fixed. 95% of my updates are approved in 1-2 days.

On the testing side, TestFlight and other tools make testing pretty quick and
easy.

So what is the "bureaucracy" you're talking about?

The biggest issues with iOS are the 30% cut Apple takes, and discoverability
on the store. The dev experience is actually pretty good, and the user
experience is much better than Android.

Apple's balance here is FAR superior to Android's.

~~~
rusk
Well, like you say, you've been doing iOS dev for seven years, which kind of
puts you into what I'd describe as the "Specialist" category. I wouldn't go
trying to develop an iOS application without somebody of your calibre on board
- but then you're either an expensive developer with cross-disciplinary skills
or somebody we have "on retainer" to deal with this kind of stuff.
Specifically what I recommended my colleague hire once she has her prototyping
done, purely to deal with the machinations of the Apple ecosystem. Then just
take it inhouse for support and maintenance.

It's interesting you mention test-flight specifically as this is something
we've had a huge amount of trouble transitioning to. For an Apple specialist
this is probably a no-brainer but for a product development org this is yet
another headache where we used to just be able to issue our own development
testing certificates.

~~~
charlesdm
It's specialised, but nothing ground breaking. The major issue that I had when
starting 6 years ago was having issues with code signing, but those have
largely been fixed in the latest versions of Xcode. I never had any of the
issues you described.

Getting an app in the App Store isn't much harder than integrating with a
third party API. Frankly, I don't see how they could make it much simpler. You
make a build, upload it, it gets reviewed and you push it to the store.

Adhering to the rules of the ecosystem is the price you pay for getting access
to >100 million accounts that can drop pretty much any amount on your software
with the touch of a button. Sounds like a pretty good deal to me. I've managed
to make plenty of money through the App Store.

~~~
rusk
I only have my third-party empirical experience to go on. Developing for other
platforms seems far more straightforward. If this has changed recently then
that is a good thing, but experiences in the meantime has left scars that
might take a year or two to heal.

~~~
charlesdm
I had previously done Android development, and god, how I hated that. A
gazillion phones with different screen resolutions and apps never looking
exactly the way you want them to, random APIs breaking on random devices,
because some shitty chinese manufacturer skimped on certain key things, etc
etc. In comparison, iOS development seems pretty great to me.

~~~
rusk
Yes, very true. Both ecosystems have their issues.

------
majewsky
These stats may be "scary", but they sure ain't surprising.

> The number of app store applications is down significantly in 2017,
> averaging only 500 per day since the turn of the year.

Well, duh. Everyone and their dog already has their own app, so of course the
number of new applications goes down at some point. It's called market
saturation. Look it up some time.

> ComScore data suggests that half of U.S. smartphone users download zero apps
> each month

Well, duh. At this point I've figured out the set of 5-10 apps that I actually
use, so it's entirely realistic that I will go for another few months before
installing the next app. I actually find it surprising that every second
customer downloads a new app each month.

> If you Can get users to hit download, according to Flurry Analytics, only 36
> percent of apps are retained after one month and only 11 percent for a year.

Well, duh. A lot of app downloads are for one-off usages, like "I need to scan
this one QR code" or "I will use this Wifi analyzer to check which Wifi
channels are overcrowded and choose the best channel for my router".

> Even worse, says Andrew Chen, the average app loses 77 percent of its daily
> mobile users (DAU) within the first three days, and 95 percent of apps
> aren’t used regularly after 90 days.

You can tell that something's very very wrong with the app industry when they
consider it a bad thing that they can't get you addicted to their product.

EDIT: One more thing:

> [Pinterest] leveraged massive incoming traffic to their website and then
> used that as an opportunity to get users to download and install the app, a
> platform where in Pinterest’s case they could engage with the user even more
> deeply.

Why does every website ever want me to download and install their app, when
the web is just as powerful an application platform for 90% of use cases? When
they say "engage with the user even more deeply", the only two things that
spring to my mind are annoying notifications and always-on tracking.

~~~
kbart
_" Why does every website ever want me to download and install their app, when
the web is just as powerful an application platform for 90% of use cases?"_

Yeah, that's annoying as hell. It's like an old "best viewed with IE" all over
again. A wast regression from functional and vendor neutral web.

------
monochromatic
App developers: what percentage of apps provide no more functionality than
just going to your website, but exist only to make it easier for you to
collect data about me?

~~~
potatolicious
App developer here: there are two answers to that question, and one myth to
dispel.

First the myth: apps do not necessarily collect more data about you. In fact
as far as sketchy advertisement tracking goes, the web is far more pernicious
and gives away much more of your data than native apps.

For one thing, on websites ad networks track not only what you do on that
website, but can track you across sites. This is banned in native-land on pain
of Apple swinging a very large banhammer on you. App developers are largely
only collecting analytics on your actions in-app, and not feeding it into a
larger ad network.

Even web views from inside the app (which are often used to show ads) do not
have access to the cookies in your standard browser, making cross-app tracking
considerably more difficult.

Anyways, to answer your question:

1 - On a strict numerical basis, most apps (70%+?) provide no significant
improvement over visiting the website and are largely pointless.

2 - When weighted by installations or usage, most apps provide dramatic
improvements over visiting the website and users would significantly suffer if
forced into a website-only option.

Which is I guess the obfuscated way of saying: most apps are pointless, but
nobody installs them anyway, they just languish in the far corners of the App
Store.

The apps people tend to give a shit about (see: Facebook, Google Maps,
Spotify, etc) tend to have a significant amount of functionality that is only
possible (or only practical) in a native app, and would be significantly worse
as a website.

~~~
monochromatic
Interesting. What sort of functionality is possible in, say, the Facebook app
as compared to the mobile website?

~~~
potatolicious
Hmm, where to even start? Some off the top of my head:

\- Web doesn't have access to the camera. Uploading a photo to Facebook is
easy because you can launch the camera directly in-app, without having to use
a separate camera app, save the image to disk locally, and then picking it for
upload. Importantly also is the rise of photo filters, which would be
impossible to live preview on a website.

\- Importantly also, there is an increase in live streaming, which would be
impossible from a mobile site.

\- Uploading photos/videos is also easy because you can leave the app as soon
as the upload begins, the upload will be finished in the background. This is
flat-out impossible via a mobile website. With a mobile site you'd at least
have to keep the app around and be unable to do anything else with your phone
until any uploads are complete.

\- Offline/semi-offline interactions are actually possible in a native app.
The nature of phones is that it can be out of connectivity, or be in areas
with unreliable connectivity, and should still function. With a native app
actions performed while offline/marginally online (posting, commenting,
liking, etc) can be cached and performed in the background once the phone has
better connectivity. A website cannot do this.

\- On the consumption side, there are _many_ advantages to the native app:

\- The incremental page loads that FB does (and Twitter, and Instagram, and
everone else) bog down a browser quickly. Laying out the entire DOM is
extremely resource intensive and a major source of poor scrolling performance.
Even on modern desktops, try scrolling down a bunch of pages in your FB feed
(or Twitter feed), and watch the performance tank quickly until scrolling is
like pulling teeth. The native apps are immune to this kind of limitation,
since there is no DOM and only what's on screen is actively being laid out
(all off-screen content has no impact on render performance).

\- No whole-DOM layout also means that the app is more responsive on launch.
In app dev we have a concept known as the "cold start time" \- which is the
latency between tapping on an app's icon and having the app be fully
interactive and ready for the user. Webapps do a lot worse in this regard for
many reasons: needing to transmit the entire DOM, JS performance issues,
layout CPU consumption, etc, that native apps are less susceptible to, or
fully immune to.

\- In bandwidth constrained situations (which is, well, a _lot_ of the world),
a native app passing purely semantic data consumes a lot less data than a
webapp that needs to transmit semantic and presentational data. A JSON or
Protobuf payload is a lot smaller than a HTML/JS/CSS payload.

\- Media is more effectively fetched in native, which is aware of cell vs.
wifi, and can customize the resolution/size of content fetched based on
network conditions. The browser provides no access to the primitives that it
would take to implement this.

\- Videos can be inlined in the stream, which is impossible on most mobile
browsers, allowing users to quickly preview video content before deciding
whether or not to watch it.

~~~
TheAceOfHearts
All of your points are incorrect.

\- Web does have access to the camera. I regularly upload images to the
Facebook mobile site. You can also do live previews of images and allow users
to experiment with filters before uploading.

\- Live streaming on mobile web is also possible. If you support DASH and HLS
you can reach the vast majority of mobile users [0]

\- It's possible to support offline apps with mobile web, but it's definitely
tricky. The biggest issue for most people is that you can't perform work in
the background. Service workers are an attempt at improving on that. But you
can still save data in localStorage or IndexedDB and push it up when the user
reconnects. There's an offline and online event you can hook into.

\- Native apps aren't magical. If you're dealing with large collections on the
web you can also virtualize em, look at react-virtualized for an example [1].
That lets you avoid having to create as many DOM nodes all at once.

\- You can achieve the same thing by writing your web app as a shell that
later loads additional content. That way the initial load feels faster. Check
out Progressive Web Apps to see the direction that's headed.

\- Mobile web apps usually use JSON too. Nothing special about native apps
here.

\- Both DASH and HLS fully support dynamic quality. Heck, DASH literally means
"Dynamic Adaptive Streaming over HTTP". By supporting both you can target most
mobile web browsers. Native apps use these same protocols. It's already
implemented by the browser vendor or by native APIs.

\- You can jump to the middle of a video stream on mobile web. It's exactly
the same as with a desktop browser. Go open up YouTube and skip a few minutes
ahead.

[0] [https://developer.mozilla.org/en-
US/Apps/Fundamentals/Audio_...](https://developer.mozilla.org/en-
US/Apps/Fundamentals/Audio_and_video_delivery/Live_streaming_web_audio_and_video)

[1] [https://github.com/bvaughn/react-
virtualized](https://github.com/bvaughn/react-virtualized)

------
taylodl
It's not the end of the app economy, it's just the app economy is in the long
tail mode now. Every obvious app that's going to have wide appeal has already
been created. Now it's about filling in the niches. Though there's fewer users
in the market for a niche app I'd wager they'd be much more willing to pay for
it - so paradoxically there may be more money to be had in these niche apps.
For example, I'm a musician and I'll drop $10 on a niche app without batting
an eye.

------
kristianc
Worth bearing in mind that this is a piece of PR / thought leadership for a
media conglomerate that mainly plays in Sub Saharan African countries and
India, where data is more of an issue, and people are more choosy about what
they keep on their phones. Not immediately obvious on a first read unless you
can spot the signs of such a piece.

If you look at this argument through a developed market lens there are obvious
weaknesses, for instance the complete failure to address WeChat.

~~~
dominotw
>data is more of an issue

For me the issues are ,

Too many apps asking for too many permissions. What are they doing with my
photos? Yea no.

Are they running in the background sucking the life out of my phone? Steve
Jobs had the correct idea of not letting third party apps background.

------
martinald
What would equivalent stats be for web sites? I bet very similar.

------
ethbro
_> Pinterest understands this well, creating a dynamic dialogue between its
website and app worlds to improve the ‘stickiness’ of both._

Stopped reading. Seriously, _fuck_ Pinterest.

Hit a random link here: [https://www.pinterest.com/explore/wall-
colors/](https://www.pinterest.com/explore/wall-colors/)

Try and interact with the web version. Then tell me that's a UX we're lauding?

~~~
LoonyBalloony
I'm not a app making professional, but it is my understanding that web
versions are deliberately sabotaged to coerce people into downloading the app.
(so they can steal more data? Dunno)

~~~
shandor
This is so stupid. I mean, I don't _need_ the apps, so any kind of coercion is
pretty much doomed to fail. I don't usually need LinkedIn, and I definitely
don't "need" Pinterest, ever.

Making their websites suck more to encourage me to install some never-used app
just means I use their whole product less, making it almost impossible that
I'd ever get invested enough in it to install an app for it. Conversely, if
their websites were awesome, it might make me use them more, which would only
increase the likelihood of me wanting to go the extra mile to even install an
app.

~~~
ethbro
I would guess that we see this because the folks with their hands on the
levers aren't measuring failure: their metrics are all targeted at success
(app conversions). So anything they do is calibrated to move that needle
without awareness of (or caring) how many users they're losing.

... Or at least, that's the best explanation I can come up with for why some
companies seem so deadset on shooting themselves in the foot.

------
Noseshine
Here is why the startup I write code for wants an app first and browser code
second.

We actually would prefer the browser by leaps and bounds, cutting the need for
central servers and decentralization is a core idea, you should remain in
control of all your data.

The problem: The only viable way to store a significant amount of data in the
browser is IndexedDB. Which allows you only _some_ storage of the total
available - and, much much worse, _the browser can wipe the data at any time
without warning_.

It simply is not possible to provide our data-storage related system without
either a central server backing up the browser "app" \- or writing an app for
iOS and Android.

------
wcummings
I sure hope so. We need to improve the web experience on mobile, not foist
dozens of mediocre apps onto users.

Its telling that HN has one of the best mobile experiences of all the sites I
regularly visit on my phone. I frequently find myself jabbing at the screen in
frustration when operating more "complex" sites.

