The rise of the app marketplace
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July 12 2018

Understanding your market, your marketplace, and where it's likely to go in the future is key to creating a product with longevity and growth potential. When you have a good grasp of how far we've come, it's much easier to see where we might be going.

 

Snake and the PDA years

 

Once upon a time, the smartphone was but a glint in the eye of a young entrepreneur by the name of Steve Jobs. That doesn't mean, however, that business people weren't looking to technology to solve their communication and organisational challenges. In the early 90's, mobile phones like the Nokia 3310 - complete with its signature snake game - as well as Personal Digital Assistants like the PalmPilot were commonplace. These (relatively) simple devices came pre-loaded with inbuilt features like email and basic browser capabilities that were hard-coded into their operating systems.

 

The Apple revolution

 

When Apple launched the iPhone in 2007 it wasn't as revolutionary as one might think. True, the iPhone was a significant way ahead of the competition in terms of system power and design quality. However, it wasn't until 2008 that Jobs changed the rules by launching the iOS SDK. For the first time ever, the iOS Software Development Kit allowed third-party creators to build near-native applications for handheld devices, instantly creating a brand-new marketplace that gave developers access to top-quality hardware.  

 

The app big bang

 

When the App Store went live in July 2008 it featured only 500 apps. Despite this, the platform received ten million downloads in one week. It was clear that the App Store was going to be a huge success, and developers rushed to create their new mobile-first businesses. By December there were over 10,000 apps available and the growth showed no signs of slowing down. In 2012, Google followed suit with the launch of their Google Play marketplace, opening up further market opportunities to those not convinced by the Apple programme.

 

Hybridisation of payments

 

Today, there are around 2.2 million apps on the app store with 197 Billion app downloads a year (data 2017). In 2015, the total value of the applications marketplace was estimated to be around $70 Billion and is predicted to grow to around $189 Billion by 2020.

 

The way we pay for applications is rapidly changing too. Increasingly, developers are turning to hybrid payment and free-to-use payment methods that require purchases for expanded content. Subscription services are also becoming more popular and revenues from in-app advertising channels are skyrocketing.

 

The future

 

Most digital experts believe that there is still considerable room for growth in the app marketplace. We can also expect increasing innovation in the way that developers monetise the use of their products. These changes will continue alongside innovations in the technology itself. Wearable devices began to emerge around 2013 with Google Glass and the Samsung Galaxy Gear, and although growth in the sector is not as dramatic there are signs of escalating development. With the world of virtual reality making its breakthrough, too, the future for application development looks bright.

 

If you'd like to learn more about our thoughts on the future of application development, feel free to drop us an email here at the Studio.

 

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