It's The App Stores, Stupid

Let me get one thing clear first; ‘App Stores’ such as Apple’s App Store and Google Play have been a net good. They’ve literally changed the world. They’ve arguably been the most transformative technology invented since the web browser.

Every single company of importance (bar maybe the initially browser based ChatGPT) of consequence in the last decade plus has been apps in the App Store. You name it; AirBnB, Snap, Uber, WhatsApp, WeChat and so-on.

And yet, we have stagnated in the mobile internet space. And it’s in large part due to both app stores as highlighted by the Epic vs Google legal fight.

The problem with the app stores is that what once worked really well initially is now dysfunctional. When Apple debuted it’s App Store in 2008, it was a milestone and shifted the world from desktop computing to mobile.

The explosion of apps is now basically a trickle. Bar the occasional new entrant like the Chinese shopping due Temu and Shein, the top apps are essentially the same every year.

Sensor Tower Top Apps August 2021

The two app stores are now gatekeepers, taxing every app 30% rake and upwards. It might’ve worked for a hobbyist/small business, but it doesn’t work for medium to big sized companies.

Content creating is expensive. Netflix, Spotify etc are complaining bit they’re enormous; imagine everyone else.

Apple and Google have every incentive to continue to levy the rake given app stores are crucial to Apple’s iPhone sales and upwards of 15% of Google’s revenue respectively.

Epic are doing everyone a favour he pushing back against Google here and Spotify likewise with Apple. The browser worked because no one company gatekeeped the thing.

What’s the solution? I think there needs to be a concerted push by lawmakers and the tech industry at large. Epic alone isn’t enough, nor indeed one or two others like Spotify.

Otherwise, this will be ongoing, even against the backdrop of AI’s rising stars ChatGPT, Claude et al, who like their mobile app era peers, will still need to go through either app store.

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