The euphoria of mobile app developers from “There’s an app for that” to “Why do you need an app for that?” lasted exactly six years. Steve Jobs claimed the first, while launching the iPhone 3G and iTunes App Store in June, 2008 and the second question was raised by Craig Federighi (Sr. VP of Software Engineering at Apple) earlier this month while launching iOS 8.
Apple has integrated the core offerings of the most successful and popular apps including Snapchat, WhatApp, Dropbox, etc as features of its native products. Until now, all these third-party apps garnered attention and gained traction primarily offering the deficient features and filling the gaps of the native iOS and Android offerings. Apple’s message to its 9 million developer partners (47% of who joined the Apple ecosystem in the last year) is clear – “If your app is a feature that currently lacks in one of Apple’s products or features, then your app has limited lifetime”.
An installed base of 800 million iOS devices and the enormous response (of 89%) of the iOS users upgrading to iOS 7 (which is an indication of high levels of user engagement within its ecosystem), has given Apple the confidence to make such a bold move.
Dawn of App 2.0 Era
Having said that, Apple has launched a number of modules such as HealthKit, HomeKit, CloudKit, etc along with a new programming language – Swift – to usher the developers to start developing a new set of applications. The company is urging its large number of developer partners to focus more on automating new aspects of our lives and develop apps based on Utility and Functionality. The era of apps focusing purely on Design, Usability and Feature Gaps are over. Design and Usability are more hygiene now and no more differentiators, and the Feature Gaps will be plugged in the next software/operating system upgrade.
We believe, going forward, it will be difficult for young app development companies to witness exponential scale and excessively high valuations. Many companies, including Instagram, Snapchat, WhatsApp, have witnessed large valuations purely basis user base and without proven revenue models. Now, with the risk of feature gaps being plugged by the ecosystem owner in the next software/OS update and design and user interface stripped off their premium-ness and relegated to being hygiene, the users and investors know that the life of a new app is ephemeral.
Post-Post-PC Era is Here
Last week, at Re/code’s Code Conference, Satya Nadella (Microsoft’s new chief) has mentioned, “we’re entering a post-post-PC era”. Google has been working in this direction and has launched a number of device prototypes, gathering partners and even announced a dedicated OS – Android Wear. Apple, earlier this week, has launched new products and features (such as Continuity, AirDrop (between Mac & iOS device), iCloudDrive, etc) in both its new mobile and desktop operating systems and a number of other developer modules. The company is essentially positioning the handheld device at the center of user’s life, and enabling the automation and seamless integration of every aspect of his/her life with that device.
While PC era was all about Hardware (miniaturization, faster processors, bigger memories, etc) and Post-PC era was all about Software (Apps, Services, etc), we believe that Post-Post-PC era is going to be all about ‘Data Synthesis’. Platforms with the ability to collect data from various touch-points and in different formats, analyze trends and patterns, establish context and initiate relevant action (through its own and/or connected ecosystems) will drive this era.
Self-learning tools such as Siri, Google Now and the upcoming Cortana are early manifestations of these platforms (in the consumer internet space). The fundamental requirement for a platform is vast number of data touch-points – large installed base of efficient services and devices… and, this is where Google currently has an edge. However, for accurate context awareness, mining large amounts of small data is necessary.
No matter what the terminology used to describe this era (Internet of Things, Internet of Everything, M2M Connectivity, Post-Post-PC, etc), and each company trying to carve out its own way of doing things (device-centric approach of Apple vs cloud-based approach of Google), currently there is no clear leader or an established winning path in this space. It could be anybody’s game.