Developers look beyond the app

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Competition is forcing companies to skip the download stage.

Measured against any metric, Apple’s App Store has created a whole new economy since its launch in 2008. Owners of iPhones and iPads spent $20bn on apps in 2015, the company said in January.

However, just like the wider economy, Apple and Google’s app stores have a growing inequality problem.

While the rich — such as social media site Facebook and King Digital Entertainment, developer of the Candy Crush video game — get richer, other developers are finding it ever harder to get their apps noticed. More than 1.5m are available for download from Apple’s App Store alone.

But a study by Activate, a tech and media consultancy, showed that users spend more than three-quarters of their time on just five apps.

“App adoption and monetisation are heavily skewed towards the top few apps,” says Alex Austin, chief executive of Branch Metrics, a mobile app technology provider, in a November blogpost. He added that “99 per cent of the value is centralised to the top 0.01 per cent” of apps.

Yet at the same time it has never been more important for companies to build a mobile presence. ComScore, an internet analytics company, found that usage of mobile apps overtook time spent on desktop PCs in the US past year, with 18-34-year-olds now spending 61 per cent of their digital media time on smartphones. Flurry, a mobile analytics service owned by Yahoo, found that time spent on mobile more than doubled overall in 2015.

The dominance of the smartphone is something of a challenge for developers hoping their app will become the next big thing. This has pushed some companies to experiment with different kinds of mobile engagement, including some that do not require apps to be installed on devices at all.

From virtual assistants — software that performs secretarial-type functions — embedded in messaging services to apps that can be “streamed” instantly, as one would an online movie, technologies are emerging that offer different ways to avoid downloading apps.

Hoover, founder of technology recommendation site Product Hunt, coined the phrase “invisible apps” to describe companies that use instant messaging services such as Facebook Messenger, business focused chat app Slack or simple text messages as the main way to reach their users.

“Some of the hardest things for every company is gaining attention, distribution and becoming a daily part of someone’s life,” he says. “That’s one of the reasons Slack has had so much traction with developers.”
Mr Hoover says he is reminded of about a decade ago, when everyone was building on top of Facebook’s platform instead of having their own isolated portals in their efforts to attract customers.

For instance, after initially launching as a mobile app, Paris-based expenses tracking start-up Birdly decided a Slack “bot” — an autonomous computer program — would do the same job faster. Users send a photo of a receipt to the Birdly bot, which scans the data to a spreadsheet.

Other examples of “invisible apps” include Ukraine-based PocketTour, a travel agency accessed via messaging app Viber, while San Francisco company Digit helps users to manage their finances via text messages.

Using messaging apps for more than just chatting is already widespread in Asia thanks to the likes of WeChat and Line, which have long been used to send money or hail a taxi.

In Silicon Valley, Facebook has so far been the most aggressive in promoting this behaviour outside Asia. In 2015, it opened up its Messenger app to other developers. They can create extra features, such as emoji keyboards for embedding graphic symbols including smiley faces in messages. And businesses can communicate individually to Facebook Messenger’s more than 800m regular users. Selected retailers are testing out the platform for tracking deliveries or offering customer support.

During January’s Digital-Life-Design conference in Munich, Facebook-owned WhatsApp Messenger announced that it would also allow businesses to communicate with users through the app.

“That could mean communicating with your bank about whether a recent transaction was fraudulent, or with an airline about a delayed flight,” WhatsApp said in a blogpost.

However, the service is unlikely to be free for businesses. WhatsApp is hoping it will generate revenues offsetting its annual $1 subscription fee, which it scrapped at the same time.

In December, Slack launched a platform that allows developers to create products for its messaging service as well as an $80m investment fund to help lure them in. “In the general space of [artificial intelligence], bots and virtual assistants, we think there’s big potential there,” Stewart Butterfield, Slack’s chief executive, told the FT.

Virtual assistants that can perform functions such as suggesting gifts for spouses or booking restaurants are growing in popularity. The likes of Magic, Operator and Facebook’s M all offer concierge-like services through text messaging-style channels.

Virtual assistants that can suggest gifts for spouses or book tables in restaurants are growing in popularity

“Traditional apps tend to provide general experiences, whereas these recent advancements are more about personalised experiences,” says Jan Dawson, tech analyst at Jackdaw

Research. In November, Google also began an “app streaming” pilot — which lets users access apps without downloading them — in an attempt to bring together the best of the traditional web and mobile applications.
This test is provisionally limited to a handful of partners, but Google is also opening up other parts of its mobile platform to developers. Google Now, the group’s automated organiser, can draw information from existing apps such as restaurant booking service OpenTable and car share company Zipcar. Users see information from these providers without having to open apps.

Reducing the app to its essential elements is likely to go even further. John Borthwick, chief executive of start-up studio and investor Betaworks, says that push notifications — messages that pop up from an app if users have signed up for them — will become the “primary interface for computing”, as apps communicate messages that are relevant to the person receiving them.

Mr Brothwick says: “Instead of having to open an app and find something off the web, your device and the contextual data it has — such as location, interests, time, weather — can tell you about it with a push notification.”

For developers, mobile apps remain essential. But techniques such as push notifications and chat bots offer wider opportunities to cut through the digital clutter by working with the likes of Facebook, WhatsApp and other giants of the app stores, rather than competing against them for consumers’ attention.

 

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