End of Mobile Apps era ?
We recently came across an interesting read on theverge.com titled ‘Life and Death in the App Store’. It claimed that new app downloads in 2015 had flattened and that revenues of app developers was on the decline. In June 2016, Google claimed that there were over 2 million apps available on the Play Store. In contrast to this, the claim that the numbers for new app downloads were falling seemed slightly unsettling. As a company that builds apps, we got curious and decided to do some digging on our own to get to the bottom of this.
“I’m not surprised by this”, said Suraj Prabhu, a freelance writer. “I don’t remember the last time I downloaded a new app. I have a set list of apps and I’m loyal to them. Every time I get a new phone, I just visit the ‘My Apps’ section on the Play Store which lists the apps that were installed on my old phone and I download all of them. And I don’t think that counts as a unique new download”, he elaborated.
( info on Statista )
At first look, the bars indicating number of new app downloads keep getting progressively higher. Over 170 billion apps were downloaded in 2015 across the world. This is a big leap when compared to a mere 2 billion downloads in 2009.
But on further inspection, we noticed that the rate of increase of app downloads was on the decline every consecutive year. The biggest leap in rate of increase was between 2010 (about 4 billion downloads) and 2011 (about 21 billion downloads). This marks the big boom in the app market with a five fold increase in the numbers. The last three years, however, seem sluggish. The rate of increase in app downloads is about a third of the downloads in the previous year.
Another aspect we looked into was the difference between free apps and paid apps. Globally, the percentage of paid downloads has been steadily on the decline. In 2015, only 27% of downloads were paid (with an average price of $1.27 per app) as compared to 2011, where 63% of app downloads were paid apps (with an average price of $3.64 per app). In such a market, free apps with in-app purchases and subscription plans seem to be doing better than paid apps.
So who gets affected most by all of this?
The big whales of the cyber-ocean like Facebook, Twitter, Snapchat and other popular social media apps seem to be largely unaffected. Wikipedia shows that as of October 8th 2015, there were only 15 free apps with 1 billion+ downloads. In that list, 3 belonged to Facebook and the other 12 were owned by Google. The runners-up on this list mostly included games (like Angry Birds, Candy Crush and of course, Pokemon Go!), subscription based apps (like Netflix) and value based service providers (like Uber ). What this means is that the odds are stacked against start-ups with smaller budgets. They’re like little minnows trying to swim against the current!
It must be quite frustrating for the new guys on the block who are trying to push a new idea driven by innovation and effort; especially when some app that let’s you slice cyber fruits like a ninja or chug glasses of virtual beer generates more revenue. But there is still a silver lining to this stormy cloud.
Plato said that ‘Necessity is the mother of invention’. This still applies to today’s app market. The key to success for any start-up is to first come up with a unique idea that actually meets a dire necessity. Sure, it’s easier said than done. But it’s definitely a better approach than trying to out-do an already existing concept. The story of California-based app developers Pixite as covered by the e-magazine The Verge is a good example that substantiates this. In the process of just trying to cater to the necessity of easily viewing one’s online-stored photographs on an Apple device, they trumped Google since Picasa did not have a native app for iOS at that time.
So it shouldn’t come as a surprise that the app market is quite reflective of other industries like banking, infrastructure, food & beverages etc. where the big guns tend to trample over the underdogs. But every now and then there is a breakthrough from below the ranks that miraculously out-performs these seasoned veterans. The mantra to success (which is no easy mantra by any means!), to succeed in this market is to not lose track of your initial vision through all the inevitable ups and downs.