Peak App: Do We Really Need More?

The phrase ‘there’s an app for that’ has achieved the ultimate in internet acceptance – it’s a hashtag and a meme. It’s also increasingly true – apps have proliferated at a massive rate. But does that mean there are now too many, and should you think of building one?

Apps are the lifeblood of mobile internet, and they’re among the fastest growing sectors anywhere in the economy, so it’s hardly surprising that a lot of people want to get in on the action. But it’s not always a good idea to become an app creator.

Apps are an explosively growing sector. Between January and November 2014, Google Play, Amazon Appstore and iOS App Store each grew by more than 50%. And it’s part of a long term trend going back to at least 2010. iOS App Store is worth 10 times what it was then, and in 2014, iOS App Store sold $10 bn worth of apps. Maybe that’s why the three big players now have 1, 024, 000 developers working on apps between them – over half of whom work at Google.

All of which sounds like a digital gold rush. Why wouldn’t you want some of that?

Apps take up 86% of a typical mobile web user’s online time. That sounds like another fabulous stat showing why apps are the market to get into. But it’s actually deceptive. It sounds like, if you’re an app maker, you’re competing for 86% of a mobile user’s attention.

The reality, though, is that if you don’t make games, which account for 32% of app time, you’ll struggle. Facebook and social messaging account for another 27% of app time, leaving 41% to play for. Twitter, Youtube and utilities absorb another 18%, leaving just 23% of app time actually in play. That’s spread across an average of 26 apps used on a monthly basis. If you’re one of them, you’re competing for less than a percent of the typical user’s time.

What will that competition look like? In an increasingly frantic marketplace, it will often look like financial outlay. Each app download costs the developer an average of $1.30, but some run far higher, as much as $70 in some cases. And half the users you acquire this way will be gone in just three months.

None of this is a reason not to build an app: some apps are massively successful, and plenty that aren’t are providing value for their users and profits for their developers. But it is a good reason to think about whether you need an app – and to reconsider search. Mobile search has been eclipsed by consideration of that 86% figure – but in fact, as we’ve just seen, a new app developer is competing for just 5% of the average mobile user’s internet time, as against the 14% accounted for by browsing.


Posted on: 03.20.15