

The Great App Bubble  - gspyrou
http://www.fastcompany.com/1684020/the-great-app-bubble

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jswinghammer
Right after a giant real estate bubble everyone thinks they know what bubbles
are and can spot them. A bubble is defined by the existence of debt fueled
poor investments in the more capital intensive higher orders of production.
The consumer good industries suffer side effects of bubbles and their eventual
busts but I can't think of a bubble that was created in the consumer good
industry. It's just not capital intensive enough for that.

I don't see why people trying to start companies based on developing higher
quality apps could ever be a bubble. If those companies don't end up serving
consumers they'll go out of business which is not abnormal at all. It's part
of life.

~~~
nadam
I define a bubble like this to myself: too much is invested into something
compared to the revenue it will generate in the future. Now if we assume that
'developer time' is an investment from the developer, then we can discuss
whether apps are a bubble or not. I don't know the answer, because I don't
know the numbers. We should sum up all the revenues generated by apps and
divide it by the sum of all develoment time invested into apps. If this number
is very low then we may speak about some kind of bubble. If we assume that
users will buy even less apps in the future, then we can speak about a bubble
even more.

~~~
ja27
For me, I know it's a bubble when everyone from my neighbors, mom, coworkers,
etc. start talking about investing in it or when there are "reality" shows and
late night infomercials about it. That's when it's time to get out.

~~~
tocomment
Yeah, I'm waiting for my family to start talking about buying gold so I can
short it :-)

~~~
chadgeidel
You mean they are not? I thought gold is the perennial "hedge against economic
downturn" and non-financial specialists treat it as such.

I hear friends and family talk about gold whenever the economy is sour.

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Dunbar
I find it interesting that he compares the value of phone apps to the value of
the mobile web. There are thousands more apps than the user can process, and
the majority of apps that the user downloads will be abandoned/forgotten
within a few hours/days.

It sounds a lot like the internet in general, to the extent that App stores
could be considered a transient analogue to a gated internet. Thousands of
apps/sites all struggling to attract the attention of users.

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city41
I generally agree with his arguments. But, perhaps naive, I believe games can
be immune to a lot of this. Gamers always have room for one more game if it's
good. There is a sizable chunk of iOS users who pretty much use it as a game
platform (toucharcade.com's forums are a good testament to that).

But at the same time, I've come across many excellent, well developed,
beautiful games in the app store that 3 people have downloaded. So games for
sure are not a magic bullet.

~~~
wallflower
Care to share the names of some of these games? Always looking for well-
produced indie games. Also, how do you find them? Serendipity or scrolling
endlessly?

I really only find games by word of mouth, the top listings, or keyword
searching.

~~~
city41
I recently bought an iPad so browsing the app store and downloading pretty
much everything that is free has become a hobby of mine :)

My favorite is LinKing (iPhone and iPad). It's by a German game company (they
have 180 employees and pump out a lot of games) so they're not quite "indie";
but the game's sole review is from me (I reviewed both the lite and pay
versions), and no one has rated it. It's a well done puzzle game with a really
nice interface. It's my current favorite iPad game.

Just Deliver It (iPad) is a really polished game from a Japanese developer.
Great music, graphics and interface. IMO the game itself is not so great, but
it may be other people's cup of tea. It's also a puzzle game. It has 13
ratings and no reviews, so I'm sure the developer is not seeing a return on
investment.

Brainstory (iPhone) is surprisingly polished for such an obscure little entry
tucked away in the app store. It's got great graphics. But the whole thing is
just really weird, and I think that turns people off. It's a pretty standard
puzzle game ala columns or dr. mario.

Ninja Block (iPhone) is a strange beast. Also from a small Japanese team. It
has beautiful graphics (their artist is awesome), strange canned music,
engrish galore :), and the game itself is mindlessly stupid. You have to stack
blocks on top of each other as high as you can. The engrish, bad music and
slightly raw feel the game has is a turn off. Some things just aren't very
polished, it could have used another week of dev time. But I actually think if
they could have polished it up just a tad more (and hired someone who speaks
english well), they would have had a good entry in the very popular "super
simple games that only shoot for a high score" that totally dominate iOS.

ESP Galuda II (iPhone) is from Cave, a very successful long time player in the
shmup genre (huge in Japan). ESP Galuda II is by no means ignored (63 ratings
and 27 reviews), but since it's from Cave (they are just a fantastic company),
it's disappointing. iOS users, you were given caviar and you ignore it! :)

~~~
wallflower
Love Ninja Block. Thanks for the recommendations!

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ja27
I hope the bubble bubble is about to burst.

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forgottenpaswrd
So this man thinks that because he only uses 5 apps other people will only use
5 apps.

This reminds me to the web "bubble". The same way not every web page about
cars or cats made millions to their creators, not every fart app is going to
make you millionaire.

You can use the same arguments for web too: 1)web don't generate profit for
their developers(using his per capita metrics). 2)web is not profitable for
MS, Apple, IBM... ... But the web is very good thing with or without profit.
It gives you just the profit opportunity. Is not going to give you money just
by standing up waiting for the money to come.

This is only the start of a new paradigm: Using touch with your computer, and
like the first "visual" apps, they look like toys compared to the serious
precedent(were is Lotus 1-2-3?). Easy to look down on, some people could loose
the train if they don't jump.

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mattmanser
Pick any of his arguments and you can flatten it in seconds.

I've seen the nonsense 'avg cost to develop app' metric before, put it in
context, there are a huge number of apps that use the same code with different
data.

Also claiming that apple doesn't value the actual apps is ludicrous given
their app specific advertising campaigns of 'There's an app for that'.

~~~
riffraff
there are also a huge number of free apps that simply should not be counted,
and that would push the average return-on-app much higher.

~~~
moomba
Indeed 36K seems a little high for all the cheap free apps on the market.

As for using the mobile browser instead of the app. I'm curious why people
aren't just making apps that load up their site. They will have a universal
platform for app development and get to say, "We now have an app on X that
allows you to use our product."

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bconway
The bubble has already burst, as evidenced by the lack of value-generating
apps (run once and never touched again) and the bottom falling out on prices.
Apps are either free or 99 cents, with the exception a few proprietary
platforms (or protocols) that won't easily allow competition (Slingbox, etc).

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jpdbaugh
The only apps I have purchased for a real amounts of money are from Rock or
Cydia. Most of them were $10+ and to be honest I use them everyday. Apps such
MyWi 4.0, My3g, IntelliScreen, Wifi Sync, and many others get daily use from
me and and I am more than happy with what I paid. Granted, AT&T and Apple
aren't likely huge fans of these types of Apps, but I think that is a huge
mistake on their part. Android too is hamstrung by Verizon with what they are
allowed to give developers access to on their phones. If these restrictions
weren't in place I really believe that there would be so many more unique and
USEFUL Apps than there are now. The really useful (jailbroken) Apps go beyond
porting websites to cocoa.

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igrekel
The subject has already much discussed on HN. I don't see how making the
association with the bubble sheds new light to the App phenomena. I doubt the
comparison even applies, or if it applies you could put the label "bubble" to
anything trendy (and many that is what is going on... the bubble of using the
word "bubble"). Apps can only be traded one way, you can't sell them back to
someone else.

At least the target market for the iPhone apps is growing and a stepping stone
to the iPad or any other device to come that will adopt IOS.

The author doesn't use many apps on your phone. I can bet he is not using many
apps on his PC either. There are tons of things people buy or offer that
remain never used.

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jerguismi
There is one app which is worth of hundred euros to me: a local public
transportation app (ReittiGPS in Finland). 3 euros for an app which I use
almost daily and which has saved me hours is pretty low.

On other hand I have dozens of little apps which I use very seldomly. But I
guess I will be wasting money for those apps, since one or two of them has
been pretty useful to me (and games of course).

And I still use much more money for beer than apps :)

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kreek
Another example of lying with statistics. The author takes the number of apps
/ revenue to paint an unrealistic average. What's really going on is a few
apps are making millions, and the rest almost nothing.

Per

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joeld42
Where did they come up with $35k to develop an app?? That's craziness. Where
do I find people willing to pay me that much?

~~~
maxawaytoolong
In new york city - contract through a digital agency.

Every rich company wants an iphone app and they have no idea why, but $35K is
a drop in the bucket for them.

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startupcto
"What's needed are apps tied to real business models that have real ROI.
And,companies should build apps with their eyes open about what they should
realistically expect to accomplish with what they develop. Having an app for
an app's sake is not enough."

That pretty much summarizes the entire story

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c00p3r
In the terms of the classic trinity - Innovators, Imitators, Idiots, the term
bubble could be defined as a rush of third ones. Blogs, SEO, and community-
created-content sites already in that stage.

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Kurtz79
Honestly I think that the first comment made more sense than the article
itself.

