Life and death in the App Store

http://www.theverge.com/2016/3/2/11140928/app-store-economy-apple-android-pixite-bankruptcy

by gpresot • 10 years ago

137 58 10 years ago

    But the App Store’s middle class is small
    and shrinking.

Apple may not realize it now, but this is an existential threat to iOS's near-dominance of the mobile device market.

draw_down• 10 years ago

Only if someone else manages to make a better app store and ecosystem. I would love for that to happen but I don't see it any time soon. As many problems as Apple's app stores have, they're the best ones. Which is depressing in its own right.

cageface2• 10 years ago

This hurts Apple more than it hurts Android because the greater quality and diversity of iOS apps has long been a selling point for their devices. Apple needs this differentiating factor more than ever now that Android and Apple phones are now so close in terms of hardware quality and OS polish.

Apple has done a lot to make lives better for iOS developers in the last few years. Why they can't invest some of that energy into making the app store a less hostile place for smaller players is a mystery.

aschearer• 10 years ago

To compete in a global marketplace with no barrier to entry it's not enough to simply ship software. Apps are commodities. You've got to create something with unique value. Probably that means doing something technically difficult or new.

increment_i2• 10 years ago

I was going to say exactly the same thing. Once the initial novelty of app stores wore off, only the shitty economics behind them were left to bare:

- The barrier to entry is so low as to be non-existent. We haven't seen a mass distribution channel with entry barriers this low since the lemonade stand.

- Since the above point forces most participants in the market to now compete mostly on price, the race to the bottom of the last decade or so has raised a generation of consumers who now expect software to be free.

- The subtle friction of finding and installing apps has led the average person to basically not bother at all, as we now know most people install zero apps per month. The lions share is now exclusively the domain of those with ridiculous marketing budgets and iffy business practices.

I'm just not sure exactly where we are on the technology curve of App Stores. Are we in the trough of sorrow, where a new horizon of viability and sustainability coupled with lowered expectations is just around the corner? Or will we look back at the App Stores as the AOL of the 2010's? I'd love to hear opinions on the subject.

zem• 10 years ago

The subtle friction of finding and installing apps has led the average person to basically not bother at all, as we now know most people install zero apps per month.

don't forget the subtle friction of having to pay for stuff, which is another factor triggering the race-to-free.

marincounty• 10 years ago

I remember buying my iPad. I remember saying to myself, "I paid a lot of money for this device, Apple will not get another penny--in any way." And they didn't. They didn't even get my cc number. I figured I bought this pricey hardware--that's it.

I know there's a lot of great apps, produced by hard working Programmers. I've just spent so little time in iTunes, I don't even know what you guys are offering.

In all honesty, I don't like iTunes. I liked it in the beginning. The more complicated/flashy it got, the more I used it in emergencies.

I couldn't imagine having a lot of time/money invested in an iTunes app today. I imagine the tides will turn though?

Someone2• 10 years ago

And the lemonade stand has the advantage that it doesn't have to compete with every other lemonade stand in the world.

If we had Star Trek style replicators where recipes are protected, how many people would be able to make a living selling lemonade? One of them might sell more, either by chance or because he has a slightly better recipe. So uldn't the money flowing in allow him to spend money improving the product or its marketing, leading to increased sales in a self-reinforcing cycle?

Yes, a few people could make a living selling 'not what everybody drinks' lemonade, but that doesn't quite work that way in software because people do not gain status (yet?) from having that "look how rich I am" app.

ignoramous• 10 years ago

Everything.me, a company that created an AI-powered launcher for Android closed down too, even though the product solved a technical problem and offered a unique proposition (context-based launcher). Such a promising product, but how do you compete with the likes of Google and Apple that can build their own apps, and control the platform, and have just as many talented developers as you do, and endless funding? It isn't easy at all, unless you've got traction from elsewhere, like the web (Facebook), or a social network affect (like games do, and messaging apps do).

Since the above point forces most participants in the market to now compete mostly on price, the race to the bottom of the last decade or so has raised a generation of consumers who now expect software to be free

In India, apps aren't just free. You get hefty discounts if you use apps. Race to the bottom has meant that VC funded business can simply terminate the competition by burning through the investment. The barrier to entry might be lower, but that is setting a potentially dangerous precedent for the app-store economy on a whole, as app-developers continue their focus on acquiring users luring them with discounts, with a view to gain in the long run (which works for the e-commerce companies).

Tech companies like Google, that offer high quality apps for free, have spoilt the regular user-- no one expects to pay even a $1 for an app well-designed and well-built. Games get the money because its addictive and companies like Google haven't invaded that market yet with their free offerings driven by ad-revenues, user-profiling, and vendor lock-in.

amazon_not2• 10 years ago

There's additional friction in the fact that it's virtually impossible to find anything (of value) in the App Store and there is no way to know before paying for an app whether it will work as advertised and/or deliver any value.

'It's only the price of a cup of coffee" does not fly after you've paid for 10 media player apps, none of which fully work or are stable.

tdkl• 10 years ago

- Since the above point forces most participants in the market to now compete mostly on price, the race to the bottom of the last decade or so has raised a generation of consumers who now expect software to be free.

And the result of this we're seeing everywhere now in the IT. Wonder how come your fresh sparkly edition Windows is a turd ? Why you don't get any updates for your Android phone ?

That's why, you get what you pay for.

rbritton2• 10 years ago

Unfortunately, that's only half the battle. Just telling potential customers about the app is incredibly difficult, particularly with the very broken state of App Store search.

tonyedgecombe• 10 years ago

Your marketing should go way beyond just listing the software in an app store, this is where most developers fail.

ivanca• 10 years ago

Hahahahahahaha

Ban me, whatever I care, but this is by far the stupidest top comment I have ever heard in HN. If you are still reading basically this is a lie, search for "Mirror app", in summary it has millions of downloads, it just an app that shows your camera, it has nothing new, nothing special, is just that is the first result. It has nothing to do with "unique value", it's all about the sorting algorithm Apple uses. And the same happens if you search "Flash light" and another million searches. Meritocracy is just another myth people like to believe.

AznHisoka• 10 years ago

Op is talking about entering the market now.

That mirror app was created 6 years ago. You can create any trivial app and succeed if you're one of the first in the market.

TheCondor• 10 years ago

Or just something generally useful. Pixite's apps kind of look like filters you might use a couple times

nsxwolf• 10 years ago

Once it got to the point that searching for my apps by name returned the apps of larger competitors, I knew it was time to bail on my silly hobby.

antiviral• 10 years ago

And this is the root of the problem- lack of discoverability for apps.

Once you have several thousand apps (not to mention 1MM+), it becomes exceedingly difficult to find apps that are relevant to you. Someone might create a better app than the one you have on your phone, or one that you don't even realize you need, but how will you know about it?

If you can only rely on the App Store rankings and search engine, you are going to have to spend alot of time looking through irrelevant results- most people don't have that kind of time.

The result is (as brought up in the article) that app developers need more sophisticated 'growth-hacking' techniques outside of the ecosystem, which tend to be hit or miss depending on some degree of luck.

There have been several app discovery platforms like AppGratis and Chomp, but Apple has shut them all down. Apple may have wanted to preserve the Appstore as the single authority on their apps, but now they have created a more dangerous, and possibly existential crisis for themselves- irrelevance of the app ecosystem.

Why should I create apps (or invest in app developers) if my chance of success is less than 0.1%? As a consumer, I may still buy Apple devices, but it will be less because of the great apps, which will become increasingly scarce.

Agustus2• 10 years ago

When the roll out of ios 7 or 8 occurred, the games on the first week at the app store were ridiculous cheesy items. It made the case that the back end at Apple was not cared for.

Looking at this weeks AppStore front page offerings, a lot of them were from the previous week's AppStore offerings; no change essentially. I have slowly stopped going to the store as a source for anything.

What I need is a web page that tells me where to go for XYZ App, who has the newest option, and how much it costs. I bought Assembly the week it came out because it addressed a need of mine for basic graphic design, simply done. Then, I want to say the week after, it was free on the AppStore. I have been burned three times so far by jumping on something only to see it released for free a few weeks later. I AM LOOKING AT YOU ALTO's JOURNEY.

Ultimately, we should all learn from Rovio's trajectory:

1. One-hit wonder

2. Ramp up to find more customers

3. Sales from new customers goes down as saturation sets in

4. New product fails to deliver

5. Turn on existing customers to have them pay a monthly fee to deliver a stable income.

Look at the DayOne's App movement on the AppStore (I love this app, but unfortunately I know they will move to a revenue model after my three years of using their app).

hellbanner4• 10 years ago

Can we talk about how we educate users on what a "webapp" is? In the last few years I've shown potential clients, friends and strangers webapps and they've asked "Oh neat.. but is there an app? Where can I download it?" or something similar.

This is very frustrating because it encourages walled-garden..

rokhayakebe2• 10 years ago

Consumers are not choosing between web apps and native apps. The problem is Path to Discovery and Launch.

Discovery: Google too is an Appstore to most people. You tell well educated people on Desktop to go to Facebook and they do this: Google.com -> Click Search Bar -> Type Facebook -> Click First Link. No matter what first link is. The appstore serves the same purpose to this group.

Launch: If you removed most app icons on people's phone and replace them with web app bookmarks, many will not know the difference. This is a shortcut for them.

peterkelly• 10 years ago

Funny story about that... there was an incident where a news article that mentioned Facebook ended up being the #1 result for the keyword on Google. The comments section was inundated with complaints from people who said they couldn't log in demanding the "old facebook" back:

http://readwrite.com/2010/02/11/how_google_failed_internet_m...

stcredzero2• 10 years ago

Did you find out why? Were any of them burned by bad webapp interfaces? Were any of them burned by their webapp getting an "unwelcome update?" Were any of them burned by crappy behavior under limited connectivity? (That one has happened to me a lot with web apps on an iPhone.)

I suspect that the problems of small app developers are much the same as guys on dating sites. All of the discoverability is implemented and controlled by one entity who doesn't depend on your success specifically to make money. They only need just enough success to keep the whole thing running.

I wish now that Jobs had gotten his way in the beginning, and all of the apps would be web apps, and discoverability would be through web links and search engines.

nostrademons2• 10 years ago

I'd toyed with the idea of doing an app discoverability startup (for Android...Google is not as averse to alternative discovery mechanisms as Apple) and even done some market research, and prospects did not look good. The root cause was that mobile phone users don't even think in terms of "discoverability" - they use a new app when they hear about it from a friend or read about it on a blog, and it fills some hole in the life that's pretty painful. No hole = no app usage. It's not like with Web 2.0, where people were actively seeking out idle diversions to use up their spare time while they sit at their do-nothing jobs. Now, everybody has been laid off from their do-nothing jobs, and they're actively seeking ways to better their circumstances, and if your app doesn't fit into that plan they aren't interested.

As much as I wish Apple & Google would fix the discoverability problem, I'm not sure it would help much. Discoverability today means finding a crucial pain point and then going out, yourself, engaging customers and explaining how your solution helps them accomplish their goals. There are still profitable niches out there, but you have to do the work of building an actual business and not just an app.

aikah2• 10 years ago

I wish now that Jobs had gotten his way in the beginning, and all of the apps would be web apps

The IPhone ecosystem would be nowhere near what it is today if not for native apps. It would have been a serious mistake. People want native apps because the mobile web sucks for anything a bit more complex than displaying text or simple forms. And web APIs on mobile in general still suck. Caching sucks, The DOM is still slow and cannot deeply interact with phone features or hardware.

The mobile web has failed since native apps are still required. Every web tech base mobile OS have failed. Firefox OS for mobile has failed.

hellbanner4• 10 years ago

Well, one of them didn't know that you could "download" a shortcut with the add to home screen, for example.

In my experience it's a trend -- "we want an app" because "apps are cool".

nostrademons2• 10 years ago

I've found that generally, the customer wants what the customer wants, and that it's usually pointless to convince them that they should want otherwise. I remember back in the early 2000s, when folks first started switching to webapps en-masse, desktop app developers went through a similar problem. "But - desktop apps update in real-time. They adapt fluidly to different screen sizes. They are about 1000x faster. You can do more with them, like real computer graphics and arbitrary network connections." It didn't matter - customers wanted webapps because they were immune to viruses, could be deployed trivially, updated quickly, and could take advantage of new sharing & social features.

Now the pendulum has swung around again, and customers want native mobile apps because they have fancier animations, are immune to pop-up ads, can access the special hardware on the device, and don't require an Internet connection. There's little developers can do about this, other than wait 15 years for the pendulum to swing the other way.

mwcampbell• 10 years ago

So how do we stop this stupid pendulum and bring some sanity and stability to our industry?

greggman• 10 years ago

Apple "could" allow webapps on the App store (like the Chrome app store did/does?) Whether that's good or bad for users or Apple I don't know. People would start submitting lots of websites to the app store and Apple would have to start reviewing them, no pr0n, no politics for example, so it's probably not good for Apple.

Then there's the initiative for letting web pages request to be added to the desktop. They tried to make it non-invasive

https://developers.google.com/web/updates/2015/03/increasing...

https://developer.mozilla.org/en-US/docs/Web/Manifest

Someone2• 10 years ago

On iOS, you don't even need the App Store. You can add _any_ URL to your home screen. The only difference with 'real' apps is that URLs on your home screen all run in the same Safari app and share its cache.

bko• 10 years ago

Is there any reason there can't be a browser experience that relies on data as well as some cached data? Browsers are getting better at detecting native gestures common in most apps and I know a lot of internet content can be cached. Won't this eventually replace the app store as it's easier, no one would take a cut and there'd be less barriers to trying new services?

I think there is some reluctance in people downloading apps. I personally avoid downloading apps on Android as I don't want them to be cluttered in "My Apps" section of Google Play, and seeing the updates is annoying. It seems silly but I get embarrassed by the low quality spammy apps I have downloaded in the past. Also, having a browser based model would allow for developers to push new releases without an antiquated versioning system. It's inexcusable that Apple has developers wait around a week on average to get a new version to the app store. I appreciate that they have actual people review each app, but 90% of the time is spent in "Waiting for Review" and the actual review process doesn't take long. I don't know if the queue is by design, but it seems excessive.

Agustus2• 10 years ago

If anyone from Pixite is reading this, do what the good ones do with their logos, through the company logo on the app logo.

For your ease, please compare these graphics before and after: http://i.imgur.com/lMwL3kh.png?1

Before shows no brand awareness, the after develops brand awareness.

epmatsw• 10 years ago

It sounds (and is) shallow, but I wouldn't download an app with the after icons. It looks cheap and distracts from the icon that matters. Also backing that up, I have only 3 apps not hidden in folders which do the double icon thing: ESPN, Marvel, and another app which is mid-rebrand.

stordoff• 10 years ago

I find the latter drives me away from apps - it looks cheap, and signals to me (rightly or wrongly) that the app isn't good enough to stand on its own.

dba7dba• 10 years ago

Few lessons I can draw from here.

This is another case of if something is too-good-to-be-true (make millions with little or no capital investment up front), it is indeed too-good. If there's a low barrier to entry, you can bet the competition will grow fierce very quickly.

We have a huge player at top that is collecting most of the benefits while the much smaller players (more and more) below are competing for ever smaller slice of the pie. And the slice was quite small to begin with, because there were thousands and thousands of fellow coders who were doing the same thing you were doing.

Lock-in is bad. As a consumer. And also as a vendor.

arielm• 10 years ago

I agree with other comments that competing in a global economy requires a great app, but what it also requires is running the business that created that app like a real company. That means more than just building a great app.

Developers that understand this are able to make a living on the app store while those that wait for the store to magically make their app successful don't.

As the VC markets cool down we'll those companies that didn't build a company around their apps fail more.

I wrote about this here: https://arielmichaeli.com/making-apps-for-love-and-profit-3b...

I personally think what's happening now is the market maturing. In the long term this will lead to more stability for those who know how to compete.

dj_doh• 10 years ago

I agree with most comments here. App market maturing, user behavior maturing. It was always going to happen. Fart apps could only sustain so long:)

Here's my 2 cents - Apple could introduce an Indie category/sub-categories. Community could come up with a distinctive micro-icon that represents something as an indie app. Sort of like the tiny Zynga dog icon you see in their apps. Once again, Apple could introduce apps to be flagged as indie by its users. Refine search results by this flag.

I think Apple does their job of promoting really cool indie apps and games. But it has to be outstanding or novel enough for them to pitch it forward.

Life and death in the App Store

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