Is the app store ecosystem a sustainable model?


Last week, Spain’s leading daily, El País, called me to discuss apps and whether there is still a growing market for them, and has briefly quoted me in an article published in this Sunday’s edition (pdf in Spanish).

We talked at length about applications markets, which are ecosystems generally characterized by low prices or even free products, and that are generally financed by advertising and freemium services (which when properly managed is the best option, in my opinion).

Most of us already have far too many apps on our phones to be able to use them to their full advantage, and could probably get rid of half of them without noticing it. The ecosystems app developers work in have pretty much panned out as their pioneers, Apple and Google, wanted: it has been conclusively shown that there is no better way of generating functions for a device than fostering the creation of an open community around it.

The App Store and Google Play are now awash with apps of every kind: there is probably an app for anything you can think of. The expression, “there’s an app for that”, originated in an Apple commercial for the iPhone 3G and trademarked by the company, has entered common currency; the problem now is that the market is rapidly becoming a victim of its own success.

Every day, more and more new apps appear, 99.9 percent of which have no future. I have a fair few apps on my phone that have been updated more times than I have actually used them. This saturation is damaging the market in every sense: less profitability for developers, stranger and stranger marketing and promotion schemes, and absurd data architecture models requiring terms and conditions that nobody spends so much as a second looking into; all in all, an unsustainable situation. And we now face the prospect of new operating systems such as Firefox OS that are based not on closed platforms to sell applications, but on web apps and the widespread use of HTML 5.

Despite the growth of the smartphone as a platform, the apps market is further away from being the supposed paradise where entrepreneurs would be able to take advantage of low entry barriers to get their inventions to a mass market and become rich in the process.

In short, what has really happened here is that the strategy of creating a relatively open platform with low entry barriers has worked to the benefit of a few (very, very, few), who have become immensely rich in the process, while millions of others compete for a few crumbs, believing that they are on the road to El Dorado. Let’s be honest, the only real beneficiaries of the app business have been Apple and Google.


(En español aquí)