Is The Future Of The App Economy Bright?
The tech world has a reputation for bursting its own bubbles. That is, it tends to trumpet the rise of majorly hyped trends—ones that just as soon as they rise to prominence or reach the mass market, they go bust. While this doesn’t happen with every major trend, there have been a fair few prognosticators over the past several years who have predicted that the app economy would soon go pop.
The industry of apps, short for mobile applications, arose alongside the widespread ownership of smartphones and the release of Apple’s App Store in 2008. The more developers could reach a consumer market simply by building and uploading an app to the App Store, the more this proved a viable business proposition with virtually no overhead other than labor. While there have been some phenomenal app-enabled successes—just look at Uber, Whatsapp and Instagram—there have also been many duds. The somewhat sarcastic phrase “there’s an app for that” has become a shorthand way to point out all the meaningless apps that are now possible to download which are crowding the marketplace.
Because of its rapid rise to popularity, it’s not surprising that naysayers have predicted the decline of the app economy for quite some time. What is surprising, however, is that they appear to be wrong for now—at least according to the current statistics. The latest data from the analyst firm App Annie shows that 2016 saw significant growth in the app market compared to the year prior.
App Revenue-On The Rise?
The first indication of this growth is revenue. Reporting on the data, Mashable wrote that “Developers worldwide raked in more than $35 billion in 2016 across the App Store and Google Play, App Annie reports. But, when you factor in revenue from advertising and third-party app stores, the total shoots up to more than $89 billion, according to the firm.”
More Downloads, More Time Spent
In addition, downloads increased as well, with 2016 seeing a 15% increase on the previous year. This came alongside a 25% increase in the amount of time spent on apps, reaching 900 billion hours worldwide and a 25% growth in the US market specifically.
So if revenue, downloads, and time spent on apps are all increasing despite the fact that the concept of apps are nothing new, what’s driving this uptick? Much of it is driven by growth in immature markets such as China, where smartphone usage is burgeoning quickly as more and more people get access to mobile internet. In addition, it’s important to note that other data suggests the “vast majority of App Store and Google Play revenue is going to game developers, and makers of non-gaming apps have historically had a much harder time generating the amount of revenue of their game-producing colleagues.” This means that the revenue growth is being driven primarily by games in app format, rather than just apps in general.
So while the future looks relatively bright for app developers (at least for now), it’s still important for them to know what’s driving the industry, both in terms of consumer demand and evolving technology. Mature markets like the US are slowing down because veteran users tend to rely on their favorite slew of apps, and cease downloading new ones. In addition, changes in the way content and services are delivered on smartphones is something developers must pay attention to, as it might just be the thing that changes the app economy for good.
As one project manager for Google wrote on Medium: “With Google streaming apps to your phone and Apple nudging developers to store parts of their apps in the cloud, we may have just entered the beginning of a future where installation becomes obsolete and the border between “website” and “native app” is blurred. This is a future without apps. And it’s wonderful.”