Is the End Imminent for Traditional Apps?

The global apps economy has developed rapidly since the establishment of the App Store in 2008. Today, it is an established branch of the digital economy and is estimated to be worth over 100 billion dollars by 2020.

And yet, experts continue to predict its demise, with the platform economy ready to take its place. In the platform economy, various services will be bundled by usual suspects like GAFA (Google, Apple, Facebook and Amazon) in a handful of core apps.

Around 6.3 billion people around the world will use a mobile device by 2021, according to App Annie. Comparing these figures with today’s values of around 3.4 billion smartphone owners, there is no need for mathematical magicians to recognize the enormous potential for mobile services. In Germany alone, 87 percent of German Generation Y never leave home without a smartphone, according to a recent Bitkom survey.

This enormous potential doesn’t come without its difficulties.

“Many startups are under massive pressure to create something innovative. If they are able to do so, I am increasingly seeing larger companies that are taking over the innovation and integrating it into their service as a separate feature. The most prominent example is Instagram Stories,” says Michel Stumpe, CEO of the Berlin-based mobility service provider free2move.

This example illustrates a further development in the current state of the apps economy: the trend goes away from individual applications to platforms, which bundle several functions and services under one roof.

The rise of the Internet of Things seems unstoppable. Virtual assistants like Amazon’s Alexa are on the rise and unfold their full potential when connected to other smart devices. Chatbots are already generating billions of dollars in sales in Asia and are now moving around the world. The challenges for enterprise apps are obvious: when users can be guided by voice control to any content they want, specialized apps become superfluous.

“Those who want to position themselves successfully in the changing environment in the long term have to put the user in the focus of their work,” says Jeffrey Nolte, CEO of Nolte. “Especially in the context of IoT, Connected Cars and Co., the challenges of ensuring a consistent user experience will be more and more challenging and more difficult to solve. Modern test methods that focus on users and meet their needs are essential.”

Where is the journey going?

The international apps economy is undergoing major changes worldwide. Where is this journey headed, both for customers and brands?

“Our customers and their needs reflect the direction of our further development. We want to be able to meet their needs at any time and will adapt to new circumstances if necessary,” says Nolte. “In the future, apps will play an even greater role. The topics of security and user interface will continue to be a main focus. I’m not talking about classic user interfaces: The app of the ‘future’ may possibly get along perfectly without an interface.”

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Jan Wolter
General Manager, Applause EU
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