Are Apps Really Dying?

Jul 28, 2016 by Heath Murphy

Here's a good idea for an app: a free-to-play augmented reality game where you can catch tiny, fictional creatures, as well as have the ability to train and trade said creatures with other players. Sound familiar? It's called Pokemon GO and it's already been downloaded over 75 million times. It's also projected to make Apple $3 billion over the next 1-2 years. That's not a typo. One, singular app could could make Apple a cool, $3 billion.

Billion. With a B.

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"...but I heard that apps were dying?"

New research suggests that app downloads are slowing down across the U.S, as much as 20% when compared to last year. With the current App Store ecosystem and user behavioral shifts, do apps matter anymore?

us-app-downloads-decline-chart 

Yes, and here's why.

While the number of app downloads is decreasing, it doesn't necessarily equate to the number of users, and if you're a developer, that's good news. Highly saturated downloads mean the users are still there. And with people spending more time that ever inside the actual app (see below), app development is still a worthy space. The app store dynamic is changing, sure. Users are now downloading fewer apps, but this may be more indicative of the App Store growing up, rather than dying. 

How is the app store growing up? Engagement. 

By all accounts, app engagement is higher than ever with users spending 63% more time in apps when compared to last year. With in-app purchases rising on a daily basis, this engagement is really what drives the revenue, not the downloads. Slowing downloads does not, on its own, mean that developers and businesses should be steering away from creating apps. If anything, with recent changes to the App Store, there is a lot more work ahead in the space.

Major changes to the App Store happened at this June's WWDC, hosted by Apple and we'll start to see app subscriptions across all categories. Until now, you either pay for an app once at download, or you download and then unlock subsequent features using in app purchases. Developers can now offer a monthly or annual subscription for the app. Since the App Store's inception, this will be perhaps the biggest shift as to how apps are developed, marketed, and sold. 

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