App Store's best days may be behind it, despite revamp

OVERCROWDED: Apple's App Store is a victim of it own success, with too many apps making it hard for developers to find an audience and customers to find what they need. Some 14,000 new apps arrive weekly.


    Jun 10, 2016

    App Store's best days may be behind it, despite revamp


    APPLE announced a series of long-awaited enhancements to its App Store on Wednesday, but the new features may not ease concerns of developers and analysts who say that the App Store model - and the very idea of the single-purpose app - has seen its best days.

    The revamped App Store will let developers advertise their wares in search results and give developers a bigger cut of revenues on subscription apps, while Apple said it has already dramatically sped up its app-approval process.

    The goal is to sustain the virtuous circle at the heart of the hugely lucrative iPhone business. Software developers make apps for the iPhone because its customers are willing to pay, and those customers pay a premium for the device because it has the best apps.

    The store is now more strategically important than ever for Apple as sales of the iPhone begin to level off and the company looks to software and services to fill the gap.

    Apple chief executive Tim Cook said on a recent conference call that App Store revenues were up 35 per cent over last year.

    But the store is also a victim of its own success. Eight years after its launch, it is packed with more than 1.9 million apps, according to analytics firm App Annie.

    This makes it almost impossible for developers to find an audience - and increasingly difficult for customers to find what they need, as some 14,000 new apps arrive in the store each week.

    "The app space has grown out of control," said Vint Cerf, vice-president at Alphabet's Google, at a San Francisco conference on the future of the Web on Wednesday.

    "We need to move away from having an individual app for every individual thing you want to do."

    Some users are moving away from apps towards messaging services such as Slack and Facebook's Messenger, which are branching out into areas like shopping and document storage.

    Meanwhile, advances in artificial intelligence could lead to people navigating their phones through voice-controlled digital assistants such as Apple's Siri, rather than apps.

    On a more basic level, the changes announced this week address some of the loudest complaints from developers, who say it is virtually impossible to stand out in an app landscape dominated by hit games, big media companies and tech giants such as Facebook and Google.

    Statistics from Sensor Tower, an app analytics firm, show a stark and widening divide between top earners and low performers in the App Store.

    The top 1 per cent of app publishers raked in about 94 per cent of the store's estimated $1.43 billion net revenue in the first quarter of this year.

    The gulf has expanded rapidly since July 2012, when the top 1 per cent netted about 80 per cent of the revenue, based on data provided to Reuters.

    The figures cover paid apps and apps that include in-app purchases.