Recent research seems to casts doubt on the future growth of the once-thriving app economy.
Worryingly, Deloitte also reported that nine out of ten users never spend money on apps. Even the seemingly infallible Candy Crush Saga profits are slumping much faster than expected.
So, has the notoriously short digital attention span already moved on? What are the reasons behind this ‘app fatigue’, and are there any implications for the place of native apps in future business models?
The smartphone market is close to saturation in developed countries, with roughly half the number of first time buyers in 2013, as there were between 2010 and 2012.
Many will remember the ‘honeymoon’ period playing with their very first smartphone or tablet, actively exploring the features available – but this lasts as little as four months for individual devices.
Over time, the ‘wow’ factor of the platform itself declines, and the novelty of discovering and downloading new apps wears off. Apps that are heavily integrated with social features face an even greater challenge, as people tend to download apps that their friends are using.
Long-term users often start to treat their device as more of a utility, and stick to a preferred set of apps with a range of functionality. Some become so comfortable with what they have that they are even reluctant to update their apps unless there is a clear and significant benefit to doing so.
Device storage space can raise further issues, with apps competing against music, videos, and photos.
Users will lose the ‘wow’ factor and novelty of downloading apps in as little as four months
Further ‘fatigue’ can be attributed to people’s heightened concern about app security, given that apps are more connected to precious personal data stored on phones than merely browsing the web.
Many apps request ‘permission’ to access data and functions from phones before use – however, users are increasingly objecting to this and refuse, judging by this summer’s Facebook Messenger controversy, users are increasingly aware of the security problems apps can pose.
These were realised in the recent Snapchat hack, linked to a third-party service. During October 2014, Wired capitalised on this point, demonstrating how free apps can syndicate personal data to developers and other third parties.
The fatigue trend is especially pronounced for paid apps, occupying just 10% of the market by the summer of 2013. Unless operating in very targeted (often productivity-based) markets, encouraging downloads is a challenge without offering apps for free, or using the freemium model.
Furthermore, revenues from comparably popular paid apps are now much less than they were just a few years ago.
All this seems to back up John Allsopp’s prediction that we may have reached ‘Peak App’: as the amount of smartphone providers, models, OS versions, and apps available increases, extracting value from the market as a whole becomes increasingly tricky and expensive. But, that doesn’t mean it’s impossible, or not worthwhile.
The maturing app economy
There’s no need for app developers to panic just yet – the real story is far more complex. After all, Apple did reach 75bn downloads from the App Store this summer – a 50% increase on last year.
Furthermore, Comscore found that the American audience now spend 52% of their ‘digital time’ on mobiles and seven out of eight mobile minutes are spent on apps, with 57% of users accessing them every day. Social networking, games and radio dominate this use, suggesting mobile could be a more entertainment-led platform than desktop.
So it seems the app economy is maturing, rather than in decline. With more digital time spent on mobiles, people are increasingly defining their devices as entertainment platforms and committing to a smaller list of apps for constant use, instead of exploring new releases.
When to use native apps
When aiming to capture the elusive mobile audience, in the past some marketers have assumed that native apps are preferable to responsive websites – but this is a false choice.
With mobile usage expected to overtake desktop by the end of the year, I’d always advise making the main website for your business responsive.
It can feel like a substantial investment, but your website will be your main ‘shop window’ in most cases, and shifting to responsive means it will always display at its best, no matter what device it is being viewed on.
Additionally, you will no longer need to update separate mobile websites. In contrast to native apps, responsive websites are accessible through search engines and will be more accessible to Google by default, than a native app alone.
Desktops should never be disregarded completely, as 40% of digital time remains on this platform, and they still are the traditional workplace-based tool.
As one of the main ‘shop windows’ for your business, responsive web design ensures your website displays at its best across devices
Instead, native apps should only be developed to fulfill a specific need for mobile users: delivering a mobile-tailored experience that draws on the device’s features, in an environment where desktop connectivity may not always be available.
In these instances, apps are a powerful way to build a relationship with the members of your audience who are enthusiastic enough about your business offering to access via a dedicated app. After all, using your app is much more of a commitment and connection to your business, compared to briefly visiting your website.
Our UX Companion app, which achieved over 7,000 downloads in just one week, is a great example of this. Built to demystify the jargon in the User Experience (UX) field, we felt this glossary of UX terms lent itself to an app format, so that users could quickly access the content in meetings or when travelling.
Our UX Companion app has been highly popular with the digital community, able to compete in the crowded App Store by having a strong use-case
Breaking into the native app market
Even if you’ve discovered a unique, mobile use-case worth capitalising on, there are further issues to consider with native apps.
While discovering and downloading apps from the Apple or Google Play Stores is a familiar process for users, it’s a difficult market for new companies to enter.
Of course, the wider web space is similarly over-crowded and competitive – but the complete control of Apple (and Google Play, to some extent) over the marketplace presents unique barriers. While websites can raise their rankings in search results using transparent and established search engine optimisation (SEO) practices, app discoverability remains a problem that Apple is trying to solve. There are far fewer guidelines for new entrants on how to improve their visibility.
There are fewer resources available covering how to raise ranking in the App Store for popular keywords, than traditional SEO practices.
Furthermore, Apple and Google Play can act as ‘gatekeepers’. They regulate what is available in their stores by carefully reviewing each app before giving permission for its release. They even charge revenue on paid apps. Apps too similar to their current offering can be rejected, and Apple has courted controversy in the past by removing any apps involving Bitcoin.
Lastly, developing native apps opens up tricky questions about which smartphone platforms to provide for. Unlike responsive websites, which automatically optimise according to screen size, native apps interact more closely to the core operating systems and features offered by different smartphone providers.
Consequently, developing across platforms requires additional design effort, specialist programming knowledge, and additional QA and testing time. The iOS vs. Android debate is a common one for start-ups, who may not have the resources available to target both. It may be wise to choose one of these markets initially, catering for the other only once it’s clear that it’s financially worthwhile to do so.
Although Deloitte’s data hinted that new app downloads may be waning, the market as a whole certainly isn’t in decline. The true story is far more complex, with an immense amount of digital time being spent on mobile apps.
Given the continued rise of mobile traffic, a responsive web design for your website is a must – one of the main focuses of your digital presence. However, native apps can still be a fantastic addition to your digital strategy. They are perfect for relationship-building and can draw on the device’s features to deliver a truly enhanced, mobile and cross-channel experience.
But watch this space as technology is moving fast and this could all change. HTML5 websites can also access smartphone functions, and with 4G, WiFi increasingly available even on the Tube, free roaming overseas, the provision of offline experiences may no longer be so necessary in two to three years.