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Illustration by Frank Chimero

Why App Stores Are Not the Business Model for the 21st Century

Apple's App Store has been a runaway success, but Farhad Manjoo warns its growing rank of copycats that it's not the business model for the 21st century.

Jim Marggraff, CEO of Livescribe, had been thinking for years about how to expand his company's main product, the Pulse Smartpen, a clever gadget that records and digitizes both handwriting and audio as a user jots notes. One option: release a public programming kit that would let any developer publish add-on software for the pen, for users to install themselves.

But last fall, Marggraff found a more appealing option. Call it Apple's way. Livescribe would maintain a central clearinghouse for Pulse apps. When a developer wanted to create a pen app, he'd submit it to Livescribe, and the company would review it before deciding to make it available to Pulse owners. "The applications need to represent the medium well," Marggraff says. "The worst thing is to have a bunch of bad apps come out and have people question the platform."

Livescribe is just one company across a range of industries joining the App Store parade. Not only has the idea been copied by every other smartphone maker, but Ford is also considering it to create programs for Sync, the automaker's in-dash communications system. Even stodgy old utility companies are get-ting into the app act. "Every utility will have its own ver-sion of the iTunes App Store," declared Andres Carvallo, CIO of Austin Energy, at a recent green-energy conference. Inspired by the spectacular success of Apple's App Store -- which observers believe pulls in more than a billion dollars in annual revenue (Apple isn't telling) -- companies increasingly see it as the future model for all software distribution.

But the widespread homage may be premature. Don't be surprised if the app bandwagon soon hits a dead end. While others rush to set up their own stores, Apple's gatekeeper model of software distribution is being questioned by developers and industry leaders. The struggles point to the difficulties that other app stores may face, none of which should be a surprise. In the age of the Web, developers can get their programs to end users without anyone intervening, so locked-down software sales will always be going against the grain.

An app store lets companies tap into ideas from third-party innovators while retaining firm control over their brands. And that's both its charm and its flaw. "The way Apple runs the App Store has harmed its reputation with programmers more than anything else they've ever done," wrote Paul Graham, cofounder of the venture firm Y Combinator, on his blog.

The central problem is Apple's heavy-handed management: Nothing gets into Apple's store without the company's express approval. Its restrictions have pushed several high-profile developers to quit the iPhone, and have bred ill will with the programmers who've remained. Apple may feel it has room to misbehave. No other phone can offer developers anywhere near the number of customers to be found in the App Store, so what choice do they have?

That's a miscalculation, because the App Store's true rival isn't a competing app marketplace. Rather, it's the open, developer-friendly Web. When Apple rejected Google Latitude, the search company's nearby-friend-mapping program, developers created a nearly identical version that works perfectly on the iPhone's Web browser. Google looks to be doing something similar with Voice, another app that Apple barred from its store. Last fall, Joe Hewitt, the Facebook developer who created the social network's iPhone app, quit developing for Apple in protest of the company's policies. Where did he go? Back to writing mobile apps for Web browsers.

Apple's app bonanza won't end anytime soon, but you'd be a fool to ignore the long-term trend in software -- away from incompatible platforms and restrictive programming regimes, and toward write-once, run-anywhere code that works on a variety of devices, without interference from middlemen. As different kinds of mobile devices hit the market, from phones to tablet PCs to smartpens to e-book readers and beyond, developers will find that trend harder to ignore. They'll need to create programs that can work not just on iPhones but on everything. Fortunately, there's an app for that: It's called the Web.

Illustration by Frank Chimero

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17 Comments

  • Antony Awaida

    Sorry I have a contrarian perspective:  The Apple app store is a runaway success BECAUSE of Apple's restrictive policies: they extend the company's culture of excruciating focus on the user experience. Developer considerations are – well – secondary! 

    I provide a more detailed analysis here: http://www.muirwebs.com/conten...

  • Min-woo Kim

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    Have you heard about Real-time Fishing LBS Contents? We have proposed this Service Model to Google over 4 years ago. Real-time Fishing LBS Contents is Location Based Service for IPTV, WiMAX, Mobile. This Service Model was created in 2002 by I&IWorld. I&IWorld's located in South Korea. As you know, there're many people enjoy fishing in the world(about 5 hundred million). I&IWorld's Real-time Fishing LBS Contents is like these.

    *Main Functions*
    1.The underwater topography and 3D views with fishing spots
    2.Real-time fishing points tracing by GPS and angling direction guide
    3.Service the real-time fishing condition about fishing place(weather, water temp, depth etc)
    4.Angler Social network(such as Second Life)

    Everyone knows that Google motto is, 'Don't be evil.' Is it all right? Visit http://www.koreacontent.org/we..., and type 'Real-time Fishing LBS Contents'. Search http://www.koreacontent.org/co.... If you need more information, please send your email address.

  • Jose Morales

    Just can´t believe that the AppStote model is one that has been driven by the end user and not the developer. Most recents (and very successful) recent additions to the AppStore are main stream SW shops that have seen the demand around Apple´s success and joined in on the harvesting of their customer base.
    A key difference is the other approach is that Apple had the iTunes Store model in place when they build the iPhone App Store and it was the customer base that made the difference. When the expand this mode to the web (which all rumors point on this directions,) we will see a major leap of faith and a build out App store for the OS X platform (specifically around the iPad/iSlate) where you will see all sorts of contents not just Apps. So what will you will end up with is a all digital power house of an Store, accessible to any platform supported by the media type, preferably and Apple product (like Ford said, you can have it any color as long as it is back.)
    furthermore, you will soon-after see Apple begin to displace Music Labels as a distribution means for new artist .
    Heck, if they added profiles and one could share,recommend, and comment on your purchases, this would give social networks a run for their money... tie that with some advertisement and the iPhone and now Google could be on their sites not just MS.

    JM

  • Andrei Timoshenko

    The model that will win out is the model that proves to be the most convenient for the users, not for the developers. Users want two things:

    1. To run the things they want to run on the device they have.
    2. For the experience to be as customized and as well-designed as possible, taking advantage of the unique features of their device.

    The two desires are somewhat contradictory - the first is a push toward standardization, the second to customization. But what the users certainly do not care about is how many times developers have to write something in order for it all to work, so the write-once, run anywhere is not a factor.

    Indeed, the victory of the app model over the web model on the Apple iPhone is telling. First, it shows that as the number of output formats and input method proliferated, a one size-fit all UI is sub-optimal. Second, services that best serve the user need some functions to run locally and some in the cloud - the future is not entirely RESTful...

  • Blake Elias

    I agree. Too many different app stores, with too many different policies and frameworks that developers have to learn, will make it too hard to keep up with all the different devices people will use. On the web it's much easier to make sites/programs for a variety of platforms, and the end user decides if they want to use it, not the manufacturer of the device.

    My desktop PC never came with an app store--it's my responsibility to find software I like, or to create my own. If I download a bad program or don't like a website, I don't blame the platform, I blame the developer and stop using their software. This freedom has allowed tons of great software to be released, changing how we use computers in a way that probably would not have happened if there was a restrictive app store. If we want to do on mobile devices what we have done on desktops, I think the only way this can happen is to have the same freedom to share/develop software, and not to be restricted to an app store.

  • Josh Jeffryes

    People that don't like something are noisy. The thousands of developers that are perfectly happy with Apple are quiet.

    Don't confuse volume with reality.

    And cult like? Please. Any time someone doesn't understand why someone else likes something, it must be because there is something wrong with them. That's a very sad and insulting viewpoint to have.

  • Kent Stephan Jensen

    It's not like Apple doesn't approve anything. As of January 15th, 2010 there were 133,979 third-party apps officially available.
    ...the App Store opened on July 10th, 2008 with only 500 apps available.

    /Kent
    http://workworkwork.tumblr.com

  • Arthur Charles Van Wyk

    I believe that Apple has a cult-like following of people paying inflated prices for being one of a "few" who has something, this despite the many people who own iPhones. Among the global mobile phone owner populace, the Apple iPhone is still very much a "can't get".
    Cults evolve and when change comes, with it comes increases and decreases.
    At the rate Apple is policing and restricting access to their App Store, I cannot but foresee a decrease in the amount of developers willing to be policed and "termed & conditioned" after they've spent hours, days or months writing code.

    All developers want to do is share their work. So sooner or later even the ones that are docile now are going to get fed up and walk away.

    Apple management seems oblivious to forget that amid all this technology, we're all still very much flesh, blood and "kaka"..

  • Josh Jeffryes

    Jeffery is right. Developers may hate, it, but that's because the developers are wrong, not Apple. They're used to the model of releasing buggy software and fixing it on the fly as people complain. That's fine for the web, where you expect things to be junk, but if things people download from the app store didn't work or broke their phone, the iPhone would be a failure instead of a giant success.

    Does Apple's current approval process work great? No. I think they were taken by surprise by the volume of apps, and have done a poor job adapting to it. But poor execution of an idea doesn't mean the idea is wrong.

  • Gregory Ferenstein

    Ashley, I think the comments by Jeffery (below) have a point: there's something inherently difficult about app stores in a multi-device world. Do you think that app stores will eventually be able to overcome this difficulty, or will it will cause the app store model to disappear?

    --
    @ferenstein

  • Chris Reich

    Apps Schmapps. Are we getting so stupid we need our phone to tell us where to have coffee within 50 miles? Over the holidays, three groups of people were lost and then stranded in snow on roads that are not used in the winter in Oregon. All three were using GPS to get to places they knew---the GPS gave them a shortcut. Nearly a shortcut to death.

    Last year, GPS took a couple deep into the snow and the husband did die trying to get his wife and child out.

    A person who can't read a map doesn't need GPS. Yes, there are a few useful apps, great. But I've been with people who use their damn I-Phone to take a picture of a chuck roast and wait for for approval from home before they buy it. I'm sure there's a meat app that can explain what a roast is and how to cook it but really....

    Chris Reich
    www.BizPhyZ.com

  • Jeffery Chapman

    This article is really not considerate of the degree of collaboration between form and function and the importance of quality control as a serious value add for users. The only ones really complaining are the developers; the users are loving it. Not everyone has the time to constantly be aware of everything the internet and developer world has to offer and are very happy to have a one-stop-shop for apps specifically designed and validated for use on my unique device.

    The apps store has a much greater challenge as users become frustrated with having to mine hundreds-of-thousands, and probably soon millions, of apps to find the ones that are best for them. The real meaningful changes will come through ways of focusing rather than broadening the offering.

  • Chris Reich

    App-Mart is just around the corner. Get it cheaper! That's the American way.

    This app craziness should make Microsoft shake in its very CD cases. There's an undertow here: Apps are less platform dependent as they are powered by multiple platforms or supporting languages. Do we need Windows?

    Will we need Windows in 2015? As long as I can open your spreadsheet without converting or screwing it up, do I need Excel? If my word processing software actually did make it easy to write a legal pleading, and anyone could open it, would I stay with Word? I don't know of a law firm that loves Word. This may be a bigger story than one might think. And being dated to Feb 1, 2010 makes it ahead of its time.

    Chris Reich
    www.TeachU.com

  • Jensen Gelfond

    The idea of "write-once, run-anywhere code" is a pipe dream. Theoretically, you can do this for both Windows and Android, but in reality supporting so many hardware configurations means a fracturing of usability and decreased stability. Those who wrote apps to take advantage of the Droid's physical buttons are now finding their apps are useless on the Nexus One. That, combined with the fact that each phone has a different processor, means that while Apple may place restrictions on developers, users can have far more confidence knowing that when they download an app for their phone, it will work as intended.

  • Daniel Karpantschof

    Wauw. That is by far one of the worst articles I have ever read on Fast Company...

    I have a Pulse, and love it(!). I was super excited when they launched their app store, but when the only possible app to download is "The 50 States of US" and "US Presidents" ... No app in the store utilize the technologies of the pen, aside form the crude LED display on the pen (which was not the intention).

    Sure, the almighty web will - at some point - replace the downloaded local content (app stores) in terms of technological advancement (waiting for next-gen HTML :P ), but the inherit diversity and flexibility of the app store model goes far beyond the availability of an app. It's the very usage of the device.

    Which could explain why the Pulse Smartpen never really took off (and why THEIR App store is bound to die)

  • Ashley Forrester

    Did anyone check the date before publishing? :) Or maybe you're following the Mayan Calendar or something?