Native 3rd party apps won't drive iPhone sales?

in iPhone edited January 2014
Well, now that the SDK is coming, chew on this for a few minutes. It's been making the rounds:

Mobile applications, RIP

Summary: The business of making native apps for mobile devices is dying, crushed by a fragmented market and restrictive business practices. The problems are so bad that the mobile web, despite its many technical drawbacks, is now a better way to deliver new functionality to mobiles. I think this will drive a rapid rise in mobile web development, largely replacing the mobile app business. This has huge implications for mobile operators, handset companies, developers, and users.

I respect Mace's opinions on these matters as he has been in the handheld business for a long long time. I do think he is still looking through mobile-developer colored glasses though. I think his conclusion is very salient, but he arrives at it from the wrong angle.

He and a lot of people think the failure of mobile 3rd party apps making developers rich and famous stem from broken business practices that really don't promote 3rd party applications. Well, the other angle they should think about is that the handheld market is not like the personal computer market (be it desktop or laptop or workstation) whatsoever. They know this, but there still is a lot of wishful thinking that the mobile market is like the PC market, and will foster big dollars for 3rd party developers.

It really doesn't.

People aren't willing to pay a lot of dollars for 3rd party mobile apps. There are a lot of forces working against it. It all stems from usability issues. We don't sit hours on end working on a handheld. Actually, I know people who do, but it is for the specific use of email, hence RIM has a killer app with which they are making lots of money. Even there, it's really because push-email users (managers et al) have no choice but to sit in meetings all day. When they are not in meetings, not in a mobile setting, they sit and do email on their laptops or desktop computers. The fact that it is difficult to use a handheld a for long sitting makes the idea of using a handheld for anything other than it was expressly designed for very hard to sell 3rd party apps to, especially $100+ ones. In essence, handhelds are only complementary computing devices serving unique purpose, not primary general purpose computing where 3rd party apps have a chance.

When a handheld can become a primary computer where we can dock say an iPod touch to a full sized keyboard, screen and mouse, a 3rd party app ecosystem really becomes viable. But this is merely a semantic argument because the usage model is still the same personal computing one. All that is different is the PC has shrunken down to handheld size with full sized keyboards, screens and point devices as accessories.

So, what does this mean? The SDK and native 3rd party apps really won't be driving iPhone or iPod touch sales. Especially with Apple's consumer focus. There are Enterprise applications, but I have to wonder if they would be better off deployed as web apps.

Mace's point about web apps being the better business model is also very interesting. I have to wonder if Apple was already thinking this in 2006. They surely did, as 3rd party apps on handhelds are generally not that great with few great successes. The point is very interesting to me that web apps will be the majority over native apps. To me this means that the mobile market will not bare a real 3rd party app environment because the costs of development versus sales for 3rd party apps are too high. A company can't get by on $20 per app license and the customer will not pay $20 for an app.

On top of the cost issues, there needs saleable applications. I don't think there are that many. I can a see myself paying $20 for a scientific calculator app. Maybe $10 for a dictionary/thesaurus. Maybe $5 to $10 for a game. Probably <$5 for a book reader (and even less for the book). All of these are hobbyist apps. Not workman-like apps (that get developers big money) such as an "iWork Mobile", image editing, drawing, plotting, etc, as the usefulness of those apps are probably unusable at iPhone screen sizes. (For email and existing apps on the iPhone, I don't consider them profitable targets for developers as the "default" usually wins, and would be at the mercy of Apple's upgrades.)

In the end, what will drive iPhone and iPod touch sales are 1) cost of the monthly wireless services, 2) the cost of the iPhone and iPod touch itself and 3) saleable features at competitive prices. For number 1, maintaing $20/month for unlimited EDGE data is vital. I think the market can probably bear $30/month for HSPA. For number 2, Apple has to have an iPhone model at $200, the prospective iPhone "nano", while maintaining a regular iPhone at $400 and maybe a halo model at $600. For number 3, this means this must maintain their flash storage advantage, web usage advantage, screen size advantage, usability advantage, fun advantage, etc. These factors will drive iPhone and iPod touch sales much more so than the SDK.
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