Forget about the Apple’s success with the App Store. According to an
article by Farhad Manjoo in Fast Company magazine, the app store model
may soon hit a “dead end”.
That’s because, he argues, developers don’t need Apple. As Manjoo sees
it, “in the age of the Web, developers can get their programs to end
users without anyone intervening“.
It’s a notion that’s increasingly promoted, and it’s a notion that’s as dangerous as it is naive.
When you get right down to it, what is that App Store? It’s the digital equivalent of Wal-Mart. Like Wal-Mart, which has more than 100m customers walking its isles every week, Apple has created a one-stop shop for a particular market — the market for digital entertainment and content. As with Wal-Mart, not every supplier who wants to get in gets in.
But that’s the point. How Wal-Mart selects suppliers, and what it requires of them, are two big factors in the company’s success. Obviously Wal-Mart can’t buy from every supplier that would like its products to line Wal-Mart’s shelves. And while Wal-Mart’s supplier requirements are epically tough, those tough requirements help ensure that the products Wal-Mart buys will be saleable and available at Wal-Mart scale.
Who benefits from that? The consumer. The one person, ironically, that those who argue against the app store model ignore. Which is sort of problematic.
While I’ll gladly admit that there’s room for improvement in Apple’s relationship with developers and I’ve argued that it shouldn’t treat developers like crap, Apple has leverage because, just like Wal-Mart, it maintains a great relationship with consumers. And for good reason. The App Store experience is wonderful. There’s plenty of in-demand content, and it’s easy to discover. The purchasing process is simple. And when you download something to your computer or Apple device, you don’t really have to worry about the quality, which provides Apple with a trust profile and reputation that most independent developers can only dream of.
So where do developers fit in? They’re suppliers. Their content and apps line the shelves of the App Store. They deserve respect, but they also need to know their place in the foodchain. Developers can act like prima donnas and complain about how hard it is to get shelf space and how Apple doesn’t give them the treatment they feel they deserve, but the numbers don’t lie: Apple delivers buyers. And without those buyers, there’s nothing for the suppliers (developers) to supply.
This is not to say that developers should ignore the ‘open web‘. There’s plenty of opportunity there too. But building apps is no different than breaking into, say, the food business. If you develop a secret recipe, for instance, you can build your own restaurant around it (the open web model). When you run a restaurant, you’re on your own finding customers. You have to handle the tedious things, like payment processing, and it can be real hard to create the experience you’ve envisioned. Scaling? Don’t even go there.
Alternatively, however, you can decide to focus on building a product around your secret recipe. Once you’ve got a product, you can try to get it into the hands of someone who can distribute or sell it for you (the app store model). When you go this route, you get to focus exclusively on the product and leave the selling to those who are in the business of selling (a distributor, a major supermarket chain, etc.). Owning a restaurant is certainly easier than this in many respects, and offers an attractive level of control, but the owner of the company who sells to Wal-Mart makes a lot more money.
In the final analysis, pretending that the fundamental economics of the internet are somehow different those in the physical world is foolish. Middlemen, like Apple, grease the wheels of commerce, helping suppliers get their products into the hands of the largest possible number of consumers. Certainly, some who shun middlemen and go direct to the consumer find success, but betting against the app store model is essentially a bet on the idea that all suppliers can and should become distributors. That’s not a good bet, and if you need any more reasons why, there’s a little company that can give you 2bn of them.
Photo credit: Kenneth Hynek via Flickr.