When you think about it, the success of the smartphone is really the story of the success of mobile apps. When Steve Jobs introduced the iPhone in 2007, he didn’t want an App Store. He envisioned a world where apps were solely web-based, and iPhones were hermetically sealed and inaccessible to app developers. Eventually, and inevitably, Apple and the makers of smartphones gave in to demands from consumers to provide access to the wealth of innovative apps built into their devices. Thereafter, the development of platforms unleashed the unrivaled growth of what is now a $143 billion app ecosystem and secured app developers’ access to the 2.4 billion smartphone users we see today.
Apps defined the smartphone revolution, re-purposing mobile phones to allow us to monitor our health, manage our finances, learn a new skill, and more on the same device that made our calls. In 2011, we characterized the advent of smartphones as the rebirth of software developers. With the benefit of hindsight, we can see that it was really apps that secured the rebirth of the mobile phone, and platforms like Apple iOS and Google Play provided the necessary infrastructure to make the revolution real.
Nearly a decade since the introduction of platforms, app developers have leveraged the tools and efficiencies they provide to make the app ecosystem what it is today. In addition to establishing a centralized database to effectively distribute apps, platforms also offered a framework that reduced developers’ overhead costs, simplified market entry, strengthened protections against piracy, and secured access to consumers and customers around the globe. Pre-2007, software developers had to wear many hats (development, marketing, research, finance, sales) and hire many people (publishers, distributors, lawyers) to get their products to the consumers who wanted them. Today, platforms are a one-stop shop for developers to manage the advertisement, protection, sale, and distribution of their apps to the smartphone users who depend on them.
Here are a few of the ways app developers have leveraged the offerings of platforms to support the incredible success of the app ecosystem.
Lowered Overhead Costs
Apps made phones smart, and smartphone platforms provided a cost-effective vehicle to get apps into the right markets. Gone are the days when developers had to shoulder the costs to establish cumbersome contract relationships or print discs, manuals, and marketing materials to get their products in front of eager consumers. Platforms have simplified and digitized distribution, significantly lowering overhead costs for software developers.
Platforms establish a marketplace for apps, build in the ability to advertise the product, and provide services that manage financial transactions and consumer analytics – costly activities that had to be contracted to third parties before the advent of platforms. Today, platforms provide services that handle marketing, consumer billing, distribution, tax code compliance and more, allowing developers to focus their resources on what matters: hiring more developers, updating their products, improving user experience, and streamlining their success for the consumers who want their apps.
Simplified Market Entry
Pre-platforms, our members often lamented the struggles of forging costly relationships with distributors to get their products in front of consumers, much less the right ones. They were confined to the stores with which their distributor had a relationship and beholden to the reach and success of marketing campaigns. No matter how incredible their product, the success of developers hinged on their ability to enter the right markets and reach the right consumers.
Thankfully, platforms leverage the global nature of the digital economy to reach consumers in markets around the globe. Without having to establish a brick-and-mortar store or budget for an expensive international marketing campaign, platforms provide immediate access to millions of international consumers, on a variety of mobile devices. Developers using Apple’s platform have access to consumers in the 155 countries where the App Store is available. What’s more, app developers have the autonomy to sell their products on a variety of platforms to increase their market penetration and reach a broader swath of consumers and smartphone owners.
Strengthened Intellectual Property Protections
Before the age of platforms, software developers struggled to safeguard their intellectual property against piracy and theft. Software companies faced serious challenges in protecting their products in retail stores because the licensing codes remained active and easy to steal. Once developers overcame significant barriers to bring their products to market, they were faced with the threat of piracy and theft which limited their volume of business, and hurt their bottom line
Piracy is still a serious issue for app developers – every year, the app economy loses $3-4 billion from the “sale” of pirated apps. However, app developers leverage dispute resolution mechanisms provided by platforms to confront entities that have allegedly infringed their intellectual property. Without these mechanisms, developers are left with the oppressive burden of copyright infringement litigation in federal court, which can leave the legitimate IP owner with several thousand dollars per month in legal fees, and months or years of time diverted from company matters. App developers and copyright holders have benefited from platforms’ cost-effective avenues to distribute and protect the integrity of their products.
Greater Consumer Access
There is no denying that app developers have successfully utilized platforms as a bridge to global customers. When we first wrote about mobile platforms in 2011, apps on the App Store and platforms from Nokia, Google, Microsoft, and Amazon gathered global market revenue of $2.15 billion. Last year alone, 3.4 billion people spent 1.6 trillion hours using apps in an ecosystem projected to be worth $6.3 trillion by 2021. The revolution of the software application ecosystem is unlike any we’ve seen before, and one we may not have seen without platforms. App developers clamored to access the platforms on smartphones, and leveraged those platforms for an experience that lowers overhead costs, simplifies market access, protects IP, and facilitates access to consumers around the globe. This partnership remains an important tool in bringing the ingenuity, innovations, and value of apps to consumers and smartphone users around the globe. Hindsight is 20/20, but we’re confident Steve Jobs would agree.