Five Reasons Not To Get Swept Up In App Madness

from the apps-can-be-copied-too dept

Fri, Feb 12th 2010 11:11am — Mike Masnick

One of the things I didn't get a chance to discuss in my recap of Midem was that there was definitely an undercurrent of people thinking that "apps" are the "answer." There were a bunch of app companies there, and they were swamped with interest, and lots of people seem to be looking at Apple's "success" with the iPhone app market as a chance to regain control, and with it, something to charge for directly. While I don't think many people were expecting apps to be "the answer," there was certainly an impression that apps are going to be a big part of the future. As I've made clear in the past, I'm pretty skeptical that this sort of app madness is really sustainable (or all that lucrative). There are a few reasons for this:

Very, very, very few apps make very much money. We've been suggesting this for a while, and the numbers seem to support it: there really isn't that much money being made directly on selling apps, even on the iPhone. Sure, lots of apps may be selling in aggregate, but very few individual apps make very much money.
Apps are still loss leader/low-margin leaders for hardware makers, and they know it. Sure, Apple wants app developers to be happy, but first and foremost it wants to sell more hardware, which is where it makes its money. And it knows as well as anyone that the more powerful the device is, the more reasons there are to buy the hardware. That means the hardware makers actually have incentive to push the price of apps down (or encourage free apps). This pressure will only get stronger over time.
Apps can be copied too. This is the one that seems the most obvious to me, but seems to get very little attention from those who believe totally in the app revolution. Apps are still digital files and they can (and are) copied regularly. Thinking that putting everything into an app is an easy response by itself to unauthorized copying is a bit short-sighted.
Future standards will break down some walls. While it won't happen that fast, and probably won't happen in all areas where apps exist, things like HTML 5 will certainly break down the walled gardens found on various app stores. Yes, native apps give a better user experience for now, but web standards will get better and better and allow more to be done via the web, totally bypassing any app gatekeeper (and paywall), just like Google did with Google Voice on the iPhone. We've seen this before. The desktop used to be ruled by client-side apps, and then lots of those apps went (or are in the process of going) web-based.
App overload. While there is a group of folks who constantly get new apps, an awful lot of people get a few apps, get themselves comfortable and then never go back to buy another app. There are really only so many apps most people need, and once they have them, there's little reason to keep getting more.

This isn't to say that anyone should be ignoring the app space, or that there's no money to made in apps. It's just that the folks acting like it's going to be "the way" that things are done in the future are going way overboard. It definitely still makes sense to have some sort of app strategy and to play in the space somehow, just not to bet everything on it. And some apps can certainly make money, but a key might be to focus not on selling the app itself, but on using the apps to provide a scarcity. For example, I've heard good things about the new This American Life iPhone app, though it's mainly because of the convenience it provides over alternatives for now. Alternatively, you could see apps that drive people to other scarcities doing quite well. But focusing on just selling apps because that's the next big thing? Might not be the best strategy for most...

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Filed Under: app store, apps, business models, control, mobile
Companies: apple

14 Comments

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Simon, 12 Feb 2010 @ 11:27am

Apple on Apps
It's interesting that when faced with the number of applications available on Windows compared to Macs, Apple used to take the line "never mind the quantity, feel the quality". No, when it comes to smart phones, they consider the number of available applications a great metric to tout!
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NAMELESS.ONE, 12 Feb 2010 @ 11:48am

and then there was SOURCEFORGE
yup you too ccan get it free and legal
now just go back to this unreasoned and unresearched document , i stopped as the skew towards ONLY propriatary seems evident in the article and THINK MORE WILL YA.
I make an app cause i need or want it OR i help one as such, others i might suggest a feature i want and so on.

IF i am a company and i like the direction an app is going i might donate a lil ( far less then i would to buy a commercial equivalent ) and wella MO PROFIT TO ME.

so in closing who cares about proprietary apps when we can get , have and use opensource FREELY AND LEGALLY
i hope ms succeeds in closing every windows hole on pirates so that pirates STOP USING IT entirely

more linux users will there be in droves.
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John Doe, 12 Feb 2010 @ 11:57am

Might be a good market for the apps developers eventually...
Maybe with the advent of HTML 5 and standards compliant portable browsers, apps can work on any device. Just like web apps today. So Apple's lock on their apps will be eroded.

This will allow apps developers to market to any smart phone so good apps will make money. I just don't see the hardware manufacturers being able to control the market much longer.
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yozoo, 12 Feb 2010 @ 12:50pm

Get it
This American Life App . . . noone has a better voice for drifting off to sleep to then Ira Glass. I mean that in the best possible way.
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Ben, 12 Feb 2010 @ 12:51pm

Apple & Java
This is probably half of the reason why Apple isn't exactly rushing to get Java compatibility onto the iPhone, iPad, etc. Without Java a lot of the web-based apps available today are useless, and as such they aren't eroding the sales of Apple's proprietary apps.
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Comboman (profile), 12 Feb 2010 @ 12:58pm

Apps are the new Ringtones
Apps are to Smartphones what Ringtones were to regular phones a few years ago. Does anyone still care about Ringtones? The window to monetize a fad is perilously short.
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Pickle Monger (profile), 12 Feb 2010 @ 1:22pm

just like Google did with Google Voice on the iPhone...
In a little noticed development, Windows Live Messenger is now available on almost any mobile phone via web browser for FREE. In Canada, Bell charges $8/month to use the IM app on the handset - I'm not sure about the pricing for other carriers. MS totally bypassed the carrier for this little gem. And since Symbian was until very recently a closed system, no other app is available on my phone. So MS does a good thing (FINALLY!) but I think they are a bit late with this since pretty soon they will probably be a number of different IM applications for handsets running Symbian. Garden walls are crumbling faster and faster.
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Chronno S. Trigger (profile), 12 Feb 2010 @ 1:27pm

Re: Apps are the new Ringtones
"Does anyone still care about Ringtones?"

Yes. The only difference now is that people kept getting ripped off by the providers of the ringtones and learned how to do it themselves (or got others to do it for them). It will be the same for apps soon, just like how Google is doing it.
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snatchmo, 12 Feb 2010 @ 1:41pm

Re: Apps are the new Ringtones
Did anyone really ever care about ringtones? I regularly add apps to my phone when the need arises. Travel to mexico next week? add a currency exchange app. Apps on smartphones do useful things (unlike ringtones). You're comparing apples to oranges.
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Alan Gerow (profile), 12 Feb 2010 @ 1:49pm

Re: Apps are the new Ringtones
"Does anyone still care about Ringtones?"

Yes.

But not paying for ringtones. Paying for 15 seconds of a full song you've already paid for ... that's what people don't care about.
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Anonymous Coward, 14 Feb 2010 @ 3:28pm

one word

Farmville
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MSolution, 15 Feb 2010 @ 4:30am

from very few apps make money - TO - very few apps are helpful!!! if an app is helpful, and if an app is viral, ... then it will make money ... it will be copied and copycats will make money on it too! but on the whole it depends on what the app does! really cant generalize the app per se M.
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Derek Kerton (profile), 22 Feb 2010 @ 2:24pm

Re: Apple & Java
ditto for flash
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Tyler, 20 Jul 2012 @ 8:33pm

Maybe
Maybe they should buy her an android tablet, gogleplay might have the right app.
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