The App Market is Shrinking!


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The App Market is Shrinking!

The latest numbers from 148sapps.biz indicate there are 366,833 active apps in the Apple Store.  There are well over 100,000 active Android apps.  The “number of apps” growth curve is increasing at an increasing rate (i.e., it’s getting steeper).  Apple reportedly sells more than 6.5 million iPhones, iPads, and iTouches per month.  Techcrunch.com reported that Jeff Huber, Google Senior VP Commerce and Local, said during Google’s earnings call on April 14, 2011 that 350,000 Android devices are activated every day. That’s almost 2.5 million per week.  That same Techcrunch.com post reported 10 billion iOS apps and 3 billion Android apps have been downloaded.

Still, we can argue that the market is shrinking.  Not the number of apps or the number of devices.  We have no doubt those numbers will continue to increase worldwide for years to come.  The increasing processing power of mobile devices (including tablets) and the ease and availability of non-device based storage options (“in the cloud”) are allowing mobile devices to make deeper and deeper inroads into the “computing” world.   Are notebook computers a thing of the past? … not now, but perhaps someday.  Will the iPad and devices like the Motorola Atrix 4G steal significant market from notebooks? … we wouldn’t bet against it.

So, how is the app market shrinking?  Apps are getting smaller and more local.  As late as 1999, a little more than a decade ago, few businesses had a website.  Even fewer had a site that truly enhanced the customer, vendor, or employee experience.  Now, it’s hard to imagine many businesses that do not feel compelled to have a significant web presence.  Remarkably few businesses currently have a mobile presence.  In a few years, that will not be the case.   Many of these business are “small” and “local,” but their mobile presence will communicate with customers and vendors and employees, perhaps more effectively than their websites ever did.

One can still read serious arguments that a web presence is a legitimate substitute for a mobile app.  These arguments must be made by folks who have never used or tried to navigate a website (even an optimized one) on a smart phone and then used the corresponding app.  Navigate to the Priceline website on your mobile device and “name your own price.”  Not bad.  Now download the Negotiator app from Priceline and do the same thing.  It takes half the time and the user experience is much, much better.   Try trading on your Fidelity account through the Fidelity website.  Again, not bad.  Now use the Fidelity app.  Completely different (and better) user experience.

An optimized website is not a substitute for a good mobile app.  The market for smaller and more local mobile apps is growing at an even faster rate than the growth rates for apps in general.  Yelp® is an excellent example.  It is a terrific service and a successful business model.  But, if you find yourself in Austin on Friday afternoon, you might want to check out local information on the Austin Happy Hour app and find information on more than 300 local bars and restaurants.

It would not be accurate to say that all the mass-market apps that will be developed have been developed.  However, in our business and in the business we see from other app development providers, smaller and more local apps are gaining ground (at least in number of apps) and the mass marketers.

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