The App Economy in 2017

31.01.18 Update: Apple App Store submissions fall 82% in 2017. 

Apple's App Store submissions continued to decline throughout 2017 as the app economy becomes increasingly saturated. The total number of submissions for 2016 amounted to 928,505, but the total for 2017 was just 159,997, an 82% decline. Furthermore, the trend looks like it will continue throughout 2018. The total number of submissions for January 2018 sits at 13,888. This is almost half of the 25,668 submitted in January 2017. 

The App Economy in 2017

Next year will mark 10 years since Apple first launched its App Store. Whilst it isn’t the only App Store, it is one of the first and arguably the most successful. In 2016, Apple reported that it had paid out over $50 billion to developers (Dawson, 2016), and according to Apple CEO Tim Cook, it is “well on the way” to being the size of a Fortune 100 company.

Unsurprisingly, most of the revenue comes from the store’s gaming category and from streaming service apps such as Netflix and Spotify (Owen, 2017). However, the recipe for app success is a particularly tricky one. For every successful app, there are thousands that simply do not rank anywhere within the App Store.

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The app economy is fast-paced, heavily influenced by trends and very competitive. As of 11/07/2017, the total count was over 3 million available apps in the App Store. These apps, which all require downloading and installing, all have to compete for the same limited app ‘real estate’ on a consumer's mobile device. Furthermore, even if a developer can get a consumer to download their app, long-term engagement is far from guaranteed.

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Data on the App Store also shows a dramatic decline in the number of app submissions. From an average of 2,128 per day in 2016 Q1, to 499 in 2017 Q1. The decline can be attributed to several reasons. Apple has introduced tighter rules and restrictions over the year, but native apps are also facing a rising tide of tougher competition.

From the development of conversational commerce to The Internet of Things, products such as Amazon’s Alexa are rapidly changing how consumers interact with businesses. There are simply more alternatives available, that often, do not involve the level of capital expenditure the development of a native app requires. Whilst, these technologies may not threaten native gaming or streaming apps yet, there is a case that native service apps may become obsolete.

Many services fulfilled by native apps, such as word processing, document sharing, accounting and mobile ordering, can be and are being fulfilled with increased accessibility and flexibility via cloud-based apps. Thus, it is a not a coincidence, given the benefits, that many cloud-based apps have experienced widespread adoption. In fact, many have completely overtaken their native app counterparts in terms of users and revenue. These include Office 365, Google Docs, Salesforce and QuickBooks. Not only do these cloud-based apps integrate seamlessly into our current behaviours, they also, due to their SaaS pricing models and ability to expand services via integrations and APIs, mitigate the risk of getting stuck with an incumbent solution. For a more visual comparison, you can check out our cloud vs apps page here.

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We have recently explored the native-app economy and the rise of cloud-based apps in our own industry report. If you would like to learn more about getting ahead in hospitality through mobile ordering, you can download a free copy of our report here.

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