Mobile apps won’t make money unless they are exceptional

By: January 27, 2014
The Appys The app industry is showing astonishing signs of growth

Research firm Gartner grabbed many global tech press headlines recently with a new report and press release suggesting “less than 0.01 percent of consumer mobile apps will be considered a financial success by their developers” through 2018.

It’s a headline grabbing statement but one that is also disingenuous. It’s a bit like the IRFU releasing a statement saying: “0.01 percent of first year boys starting to play school’s rugby will be considered by their national team” through to 2018.

Everyone in the app development community knows that most apps don’t make huge sums of money. However, this is not to say that the app development sector doesn’t hold value.

The mobile app industry just happens to be evolving quickly and the very definition of app development is being altered.

Gartner goes on to say: “Our analysis shows that most mobile applications are not generating profits and that many mobile apps are not designed to generate revenue, but rather are used to build brand recognition and product awareness or are just for fun”.

This is correct. Most apps over the past few years have been developed almost as a digital ‘tick box’ exercise. Four years ago the vast majority of marketers, suddenly feeling a bit out of water in the digital age, commissioned the development of an app for their company/brand. They did this in the same way they ‘embraced’ the digital age by getting down with Facebook and Twitter and attending lots of digital marketing conferences.

A world ruled by greatness
Fast forward to the start of 2014 and app development is now a different industry, one that is ‘ruled’ by exceptional apps and one that is dismissive of apps that were built for ‘app’s sake’.

Since the iPhone was released seven years ago, a few enormous industries have been disrupted. The music industry, as we knew it, was entirely transformed. The communications industry and the news industry was almost made irrelevant by mobile social media. The camera industry was all but buried, as people began using their smartphones as their primary photography tool. And then we have the app industry – a brand new industry built to satisfy the needs of the consumer as they move about the place. Apps promised ‘everything’ on the go, but only a few truly managed to build successful businesses and empires from their services.

Rovio (Angry Birds), Evernote, Facebook, Twitter, Instagram, Hailo, Uber, Spotify – these are just a few high profile companies that built their success on the back of their apps.

Today, extremely useful, beautifully-designed apps for the medical community, the construction industry, the environmental industry and the music industry continue to make money for their publishers.

The app industry isn’t in trouble, as Gartner’s headline suggests, it’s just there are too many bad apps out there. The same can be said for any form of publishing: books, websites, magazines, newspapers. Only the very few in each sector achieve greatness.

What the future holds
The app industry won’t die, but like any, it will be disrupted and the wheat will be separated from the chaff.
Gartner’s report also suggests: “By 2017, the browser on mobile endpoint devices will be used as a sophisticated application delivery platform, with 50 percent of new Web apps involving complex client-side JavaScript.”

Again, this prediction is ambitious but does sound about right, once the smartphone industry keeps progressing at the pace it is right now.

Smarter phones, faster 4G speeds, and limitless data downloads for consumers will all play their role. As Gartner rightly says: “HTML5 will be the best option for a widely available, platform-neutral application delivery technology that is able to deliver sophisticated applications with a good-quality user experience.”
Currently, however, the best way to do this is build an app.