The Death of the Paid App Economy, and the Coming Decline of Apple

I’m one of Apple’s biggest fans, having spend $3200 in 2009 for a new unibody 17” Macbook Pro, and an iPhone user since the 3G. I plan to get iPads and a new Mac some day in the future. I love that Apple dropped the price of Lion and Mountain Lion to just $29.99 and then made OS X Mavericks free. Mavericks has extended the life of that 2009 hardware for at least the next two years. I get that they are really in the hardware business, since the cost of entry to their beautiful quality hardware is high. It’s no wonder that Apple is more popular than ever, even though the stock is severely undervalued. Apple is right on top of its game.

But with the news that paid apps are on the decline, I am raising an eyebrow. With paid apps on the decline, developers will have to rely more and more on iAds for income. The days of many making $30 million in four months are fading away in an overly crowded arena of very highly competitive apps. The free iOS upgrade we got in June 2013 has the very exciting feel that we had in the early days of iOS 1 and iOS 2, but at the same time it feels like the same level of quality. Because it was more important to move the hardware that would go on to break all the records.

But with the paid apps declining, quality apps will only come from bigger institutions or from those with the drive that makes open source software now some of the best software. Although both are free, both are not actually the same model. Free software at least has a support model to monetize it when altruism can no longer fuel it. We have great free software like Facebook and Evernote, but eventually, some day in the future, like television, these apps will need to either increase the eyeballs on ads, or increase the number of in-app purchases. As it is, I avoid apps that place blatantly obstructive ads in the app (this means you, What Icon?) and with more ads making up that free percentage of apps that use iAds to keep the servers spinning, that means loading less apps on my phone. Apps with too many in-app purchases at diluted to the point where there are too few features in the free app. As much as I love Game of Thrones, the A World of Ice and Fire app is a good example of this. There is plenty of room for paid, quality, apps for the business world, but they will not be the dominant creature.

While I myself have paid for a mere handful for apps, in no way do I think that the decline of the paid app economy is good for Apple. Once the paid apps are gone, on both iOS and Mac, I feel the overall quality of apps will go down, and the App Store will be dead as a place for author’s to make a living. We will still have some of the great apps available on Apple hardware, but without all the quality apps we have now, the apps that a created because they scratch a talented author’s back, the attraction to the hardware will be gone, possibly left with hobbyist authored apps. This was the mistake of the Apple III: no apps to run on it. At some point Apple itself will be in decline when one of these announcement meetings fails to wow. It will come, and at that  point, the apps and the operating system will no longer be free, and there will be further reason to run App Stores. Apple went through this in the early days, and to make itself more attractive, it had to wow us. I’m not feeling that wow for anything other than the new Mac Pro; totally tubular! I’m really looking forward to that future consumer “wow” that will shake us the way the first iMac did.

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One thought on “The Death of the Paid App Economy, and the Coming Decline of Apple

  1. The new app scheme where apps are now released as sequels CalendarApp 2 followed by CalendarApp 3 is also disturbing because each year a new one is released with improvements or bug fixes that were held off until the next release. The apps can no longer stand on their own to rake in users with amazing features, and instead the authors are left with reaping recurring costs from the existing user base. Not my idea of a healthy app economy.

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