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Friday, August 23, 2013

Apple App Store marks 5 years of app-ortunity

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LOS ANGELES — Imagine a time when we didn't kill time on our phones playing Candy Crush Saga or taking instant photos and videos with Instagram or other apps to broadcast to the world.
Apps as we know them — those little programs that live on our smartphones and tablets — launched in a big way just five years ago — on July 10, 2008 — with the debut of Apple's App Store.
The iPhone was just a year old, with about 10 pre-loaded apps, including YouTube, Google Maps and the camera. Apple's visionary CEO Steve Jobs described the iPhone as an expanding universe with new software that could be easily obtained by clicking an icon on the device's vaunted home screen.
The iTunes App Store launched with 500 apps, including Ebay, Facebook and Super Monkey Ball. Some 900,000 apps are now available, and more than 50 billion have been downloaded.
"The anniversary of the App Store is a bigger deal than the (recent sixth) anniversary of the iPhone," says independent analyst Richard Doherty of the Envisioneering Group. "It changed so much."
The App Store led the mobile boom that has ushered in the decline of traditional desktop and laptop computers. PC sales have stagnated, and Microsoft's long dominance of computing has taken a hit as apps became the new buzzword. The birth of the App Store helped turn dorm-room concepts into billion-dollar ideas for app developers and revived the fortunes of a then-struggling music service, Pandora.
Simply put, the app era has made computing more fun, says Doherty. "People show off their apps: 'Look what this can do,'" he says. "People smile more than they did in the PC era."
Have you checked out that cool new app that sends photos that disappear in seconds (Snapchat)? Killing time before the airplane takes off? How about just one more round of Words With Friends? (Just ask actor Alec Baldwin, who got kicked off the plane because he refused to turn off the app.) And speaking of travel, what would a road warrior be without a flight-tracker app that monitors arrival times, gate info and other vital data?
And then there's Instagram. What were we like before we obsessively took instant photos of our food, travels and daily lives?
Just ask Kevin Systrom, who created Instagram while at Stanford with co-founder Mike Krieger. The app launched in October 2010. In 2012, they sold their company to Facebook for $1 billion.
"I figured if we were lucky, we'd have 2,500 sign-ups on our first day," recalls Systrom. "Instead, we got 25,000. From all over the world. It was crazy."
Some 16 billion photos have been shared since on Instagram — 45 million images daily.
Today, Lindsey Shay, 19, of San Diego, can't imagine a life without the Instagram photo app, which pretties up smartphone pictures with filters for colors and borders. Shay was 14 when Instagram was first released. Now she uses it every day and says she's addicted.
"It's good and bad," she says. "It makes you see your environment in a different way, because of the filters. I like that aspect of it but at the same time I want to Instagram everything I see, so it's kind of inhibiting."
When the App Store launched, the iPhone was the national rage and the best-received smartphone. Google's answer to the iPhone — phones based on its Android mobile operating system — didn't start appearing until later that year. Google says some 48 billion apps have been downloaded to date on its Google Play store for Android devices, which launched as Android Market in October 2008.
And there are now more Android phones in use than the iPhone — fueled by the popular Samsung Galaxy S line of phones.
A NEW MARKET
For developers to offer their wares in the App Store, Apple takes a 30% cut. It has paid out $10 billion to developers since 2008.
The App Store has "fundamentally changed the world," Apple CEO Tim Cook said recently. Fifty billion downloads is "a lot of zeros and a truly staggering number, for less than five years."
That said, most app downloads are free, with paid apps selling for $1 or $2. Most popular paid apps tend to be games. Developers have discovered the concept of "freemium" — offering apps for free and selling "in-app" purchases once you've tried the app to make money.
Candy Crush, this summer's most popular game, sells additional moves for 99 cents a pop. Smule, which makes virtual instruments like the Magic Piano and Guitar, sells songs to play on them for $2.99 each.
In the PC era, software didn't have instant distribution. The old way was to buy big boxes of programs for $100 or so, and install a CD or DVD at home. With the online App Store, it became cheaper and more convenient to buy, says Doherty.
Even though Android phones are more dominant, developers say Apple's iOS mobile platform is easier to work with.
"There are clearly more Android devices, but that said, we see much more engagement and time spent on iOS," says Steve Yankovich, an Ebay vice president. Android is tougher for developers because it's an open platform that's given free to manufacturers, resulting in many different permutations. "It's the Wild West," he adds. "You need hundreds of phones to know if it works on every new Android device. And that's hard."
Still, there's no discounting the huge Android audience and that its hunger for apps is just as ripe as the Apple crowd's. Instagram waited until April 2012 to launch on Android. Now, "Android is half of our audience," says Systrom. "There was a lot of pent-up demand."
THE FUTURE OF APPS
Instagram is the third most downloaded app ever on Apple, with Facebook at No. 1, followed by personalized music service Pandora at No. 2.
Pandora execs have said often that the iPhone app turned everything around for the company, which offered the first widely distributed free music app for consumers.
At the time it launched on the App StorePandora had 13 million registered users. Today, it has more than 200 million.
"Our home on the PC was a marriage of convenience," says Tom Conrad, Pandora's chief technology officer. "Our ambition was to reinvent radio, and to do that, we had to break free from the confines of the PC."
The App Store changed so much for Pandora that today, 79% of its listening comes from mobile devices — just 21% on the Web.
Which begs the question: Could a service like Pandora find a huge audience if it were to launch today in a sea of 900,000 apps?
"We went through this on the Web," Conrad says. "There were billions of websites, too. It could be done."
Just ask recent smash hits like Vine, Snapchat and Candy Crush, which launched softly and quickly found word of mouth to take them to the top.
Meanwhile, what's next for apps? Ebay's Yankovich says that apps will become more advanced as they behave more like websites, with more bells and whistles. "Today you can't build the Web experience into the app, but that's coming."
APPLE APP STORE TURNS 5Some examples from the five years of apps we have come to depend on.

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