The app store model is facing a rebellion

Enrique Dans
Enrique Dans

--

Apple launched its App Store on May 10, 2008 to provide content of all kinds for the iOS platform, creating a business model for application developers and revenue stream for Apple: in 2018, estimates put income from App Stores worldwide at $46.6 billion dollars compared to $38.7 billion the previous year, an important column with significant growth for company services. Its competitor, Google Play, was launched on October 22 2008 as Android Market and last year generated $24.8 billion, compared to $19.5 billion the previous year. In short, a $71.3 billion app market.

But the business could soon start to break down: application stores play a very important role as a channel for not very well-known developers to get their products onto users’ smartphones, but they charge major fees. About two years ago, both Apple and Google were forced to reduce their commission structure from the original 70/30 to half from the first year on. However, for companies where a subscription payment is generated to customers who obviously not only know the app, but are loyal users, the reality is that a 15% commission is a factor to be taken into account in the income statement.

Therefore, if instead of being a little-known developer who does not want to risk distributing independently (which means asking users first to find you, then trust you and in addition, know…

--

--

Enrique Dans
Enrique Dans

Professor of Innovation at IE Business School and blogger (in English here and in Spanish at enriquedans.com)