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August 27, 2014


David Mercer

And the gaming app numbers (on tablet and smartphone) are skewed even more because of the sheer magnitude of number 1, Minecraft. Tens of millions of installs at US$7 a pop skews the averages a lot. It also proves that you can make your money in games by charging up front rather than with in-app purchases if its something people really want to play.


Mobile apps are the new web. Every type of web-on-pc use case, you have a corresponding mobile app use case...and even more due to...MOBILE.

So, you can try your hand at creating a money making website ala EBay, Amazon, Facebook. It's very difficult and a few companies made billions. Far and away most made no money at all. Same with apps.

You can use the web to make corporate apps that run in a browser. You can do this both as a commercial web developer...or as internal corporate developer. Same with apps. The money for this use case is vast, and uncounted by app store or add revenue or in app purchasing metrics. Want to make money as a web work as an employee of a corporation or an employee of a company that makes and sell such web sites. Same with apps.

You can do all manner of hobby, vanity projects on the web. Put up a blog. Put up a home page. Build your own solution to a problem that a handful of people might use. You can't make money this way...but that's not why you do it. Same with apps.

You can be extending your brand or support to customers via web sites. You are a bank, you are an advertising firm, any company that is building a relationship with it's customers via the web. Same with apps. These apps are given out for free and have huge financial benefits to the companies that create them, but they don't appear in any of the app revenue metrics.

There is nothing different from web sites and mobile apps when it comes to "the likelihood you can make lots of money". You can even make web apps that work on mobile phones. But the metrics are clear. ON's APPS that rule. By a country mile.

Before you buy into the ludicrous analysis Tomi just put forward....consider whether you think it ever mattered to build for the internet. And they whole "mobile app vs. mobile web site" is NOT A FACTOR as it relates to this analysis by Tomi. There is nothing in his analysis to say "if you build a mobile web app, all the stuff I said about how there is no money in apps goes away". No, you are stuck with "don't build anything for smartphones at all, not apps, not websites". The only industry worth your time is SMS/MMS.



It'd be nice if you a) quit your American tunnel vision and b) wouldn't try to distort the facts.

"Would Angry Birds if made as a flash Web Page game make more money than as an App?"

Games are not made as websites, neither on PCs nor on consoles, so logically the same holds true on mobile. The entire idea of marketing a game wouldn't fly as a web site so they are hardly an indicator here.

"Would Spotify make as much money from mobile if it was Web only and no App?"

Depends entirely on the service's quality. But this also is an app on desktop - so again wrong use case!

"Would GoPro sell as many cameras if it did not have a GoPro app to control it, and instead just had a Web Site?"

Third bad use case. Again, we are clearly with a 'utility' app that needs to run locally to do its work well (and guess what: so it does on desktop PCs!)

"Apps are a step change in usability and engagement on a mobile device, on a tablet, and yes, increasingly on the PC - see Apple Mac App Store and Microsoft Windows 8 Apps."

Indeed. I am not questioning this part. But the reality is, many apps on mobile are just equivalent to software on PC, not to websites, and that's perfectly legitimate.
What I criticise is AppleTurfer's nonsense about apps being the 'new web' which clearly shows a fundamental lack of understanding between a web site and native software. That distinction has always been there and will never go away, it's different solutions for different use cases - just some idiot journalists don't seem to get it and plant such insane ideas in some people's heads.

"Most independent app developers don't make money the same way as most writers don't make money, most Web sites don't make money, most painters don't make money, most music bands don't make money, most Internet videos don't make money, etc."

Also, most stuff you mention here is not SUPPOSED to make money, again you are missing the criticism. What has been said is that the chance of making money by selling apps for the purpose of making money is extremely slim, to make a living off it even slimmer - and some people still promote this as a future gold-mine.

"We live in a "few winners take most economy", and in some areas it is "winners take all". Only Apple and Samsung make money on mobile handsets. Only Google and Microsoft make money on search. Only Coke and Pepsi make money on soft drinks. The top 20 Hollywood movies make over 95% of the industry's profits every year. The top 9 banks in the world make over 90% of the profits. Less than 0.001% of basketball players makes money, Etc.
"Nothing here in this article is remarkable. It is basically arguing that you shouldn't write apps because most don't make money. Well, then no one should sing, paint, write, make movies, create web sites, etc either."

Yeah, yeah, blah, blah, blah. And what does that have to do with Tomi's analysis? It just confirms everything he said, the thing is, he's one of the first to spell it out this clearly while some idiots (one even here on this blog!) unquestionably praise the viability of apps as some piece of salvation.

BTW, most of the things you list are art. Art is mostly made for the joy of making it, not for profit. If someone can make money off art, even better, but I guess no artist will take that for granted.
As for the rest: Sure web designers make money, at least the professional ones, that's their job after all, let's ignore hobbyist web sites here that just exist for private reasons. Those are never supposed to make money.

But now we come to the most glaring difference to apps:

Most apps that are SUPPOSED to make money, don't do it! That means, most developers who hope to make a living off making apps, DON'T!
Of course those, who do it as a paid job for others, can make a living off it, but look at Tomi's numbers: They are a small minority among app developers! (That's 170000 paid devs, 80000 profitable ones and 1.4 million who thought apps were a viable business and failed completely. That's the real problem. No, it's not surprising that this happens but it is surprising that the public awareness is so low.


"Mobile apps are the new web. Every type of web-on-pc use case, you have a corresponding mobile app use case...and even more due to...MOBILE."

No, NO, NOOO!!!

This bullshit makes my head hurt, sorry.
No, apps are not the new web, only some clueless tech-illiterate trying to push an agenda would claim that. Even Baron95 could only produce use cases where an app makes sense, that translate 1:1 to desktop PCs. And that is fine, since the smartphone is a pocket computer, it sure should be usable as one.
But apps cannot be the new web because their development is infinitely more costly across their entire lifetime. So making an app, just for the sake of making an app won't help any business, it will only cost money.

You better ask yourself what's the purpose of an app. And no, it cannot and should not be to remove the mobile web from the equation.

Oh, and BTW, I *AM* making money from developing apps - but by now I know the certain failure cases - even if I get them as contract work. I won't complain as ling as I get paid but with these corporate customers you have to be prepared for them to act up once they realize that an app cannot give them what they really want and refuse to pay. I've seen it happen more than once. They give us a crappy concept and expect it to be turned into magic. And you know what? Many of these apps get assembled from a toolbox because they do not contain any sophisticated content. But even with the toolbox, maintenance is far, far more work intensive than a website (mostly thanks to app store submission guidelines), without adding any benefit whatsoever, and once the customers realize this - guess what - they cancel their apps and improve their web presentation.


If you got a compelling service that would benefit from some accompanying software that exceeds the capabilities of a web site - yes, an app is not only fine, it's a fundamental requirement - but never dare to alienate the desktop users and leave them out. They want their app, too! And make sure you got some competent developers, of course - they don't come cheap!

If you want some interactive gimmick app to promote your product, you will make some developers very happy by paying them, but make damn well sure that it presents your product well and gives the user at least something that may be superficially useful.

If all you want an app for is because 'apps are the new mobile web' you already have failed to understand what apps should be about, this is a certain fail case that's going to alienate users by being an uncomfortable crutch. Such apps have no inherent use that may tie users to them.

But still, we already see on PCs that some use cases that were formerly strictly local (like word processing, spreadsheets and other office work) are moved into the cloud, something that would have been laughed at 10 years ago, so what makes you think that this won't happen on mobile? In the end economics will prevail - and if they tell that for the same quality of service a web site only costs 10% of ongoing maintenance work compared to an app, a web site it will be!
And I consider these 10% realistic - if not even too high. For ongoing maintenance the cost of a web site will be far lower than these 10%.
With a web site, if you need a minor change you task a web dev to make the change, test it locally and push it to the server, that's a work of a several minutes to a few hours and it's done.
Whereas an app needs to be tested thorougly on a local device, then needs to be checked for altered submission guidelines, then needs to be submitted to the app store, and a few days/weeks later it'll go online (provided that it doesn't fail the submission process) - but wait! - there's another catch! You now have made a change to one platform, say iOS, you now need to do the same shit to your Android version - and your Windows Phone version - and (if you target desktop as well) the Windows desktop version - and the Mac version. Instead of investing a few minutes/hours, we are now talking several WEEKS! Making app submissions is a nightmare if you have multiple targets, it costs endless amounts of time and nerves to get through it. Been there, done that all, it's really no fun and it's a first grade time killer to be locked in submission hell for a single release.

"But the metrics are clear. ON's APPS that rule. By a country mile."

Guess what: On desktop it's the same, most time is spent outside the web browser. But just like on mobile you have to lump everything together to get these results, INCLUDING all non-web use. See, I have taken those numbers apart in a previous post which clearly PROVE that, if you discount those apps that present a clear offline use case or some special service, your claim is simply wrong. Apps are not being used in place of a web service but as a substitute of equivalent software on a real desktop PC, you just derive the completely wrong conclusion from it - but my guess it that was the whole point of these articles.


1. I don't really understand the point of this analysis. It's sort of like saying that the average bakery makes more profit than the average app, so you should practice your sourdough recipe. This may well be true, but there's no technical content to the argument, and it's an artifact of survivorship bias. The average web page is never read by anybody either.

The point of apps is that they enable scenarios that have been proven to soak up user attention more than directly competing technologies. Anybody who wants to go against this has to first realize they are giving up on most of the market before they start.

2. In the recent comments, there seems to be some technical confusion about what is important in a platform. In reality, what's important is that an acceptable experience is technically possible and that enough users are on it. When the minimum acceptable quality is going up rapidly (as is the case right now for smartphones), programmer effort isn't the constraining factor.

So, sure, HTML5 lets you create apps from four years ago more easily. This won't be relevant until nothing interesting has happened for a few years. In the meantime, people who say that "all you need" is HTML5 and "a little CSS" just sound a little bizarre.

New Start

The problem with Tomi's analysis is that the value of the contract work is not included. That is all some good money for the developers and it's also some serious money. It can well be worth more than the revenues Google and Apple generate through the app stores.


@New Start

This is very true: there is real money to be made as subcontractors to develop apps for large corporations or State entities (where I am it looks as if this is how developers involved in apps make ends meet -- not by selling apps).

But this can, in no way, be included in the app "ecosystem": this is good old software services and consultancy business, and money flows accrue to that part of the IT economy.


Corporate apps are indeed part of the ecosystem. Companies will pay hundreds of thousands (perhaps millions) for service enabled by mobile app I'm involved in. Not one penny counts as app sales, ad sales or in-app purchase. Pays for a good living for the app developers and everyone else involved. And the availability of this product and the many thousands like it are part of the powerful ecosystem of Apple and Android.


Mobile apps are the new web. If the engagement of mobile apps crushing the mobile web doesn't convince about considering the top companies that make money on the web. Google, Facebook, Amazon, Ebay, Skype.

Everyone of them made billions from PC web sites. All of them have apps on mobile as the PRIMARY mobile phone experience. Facebook famously tried to not depend on mobile apps, but had to reverse course when they couldn't get the customer experience with web apps that they could with native mobile apps.

All of these companies were STEEPED in the web. Made their many billions on the web. None of them think that the mobile web is the primary smart phone interface. All have native apps.

That's how you ALREADY have mobile APPS being used more than the PC internet. Because the smartphone is the computer, and apps are the new web.

Per "wertigon" Ekström

AppleTurfer: You are missing the point.

You are looking at the star players and say "These have apps, so apps is the new future". What you fail to realise is that none of these companies have their income tied to their app. Very few developers actually turn a profit on their app. In fact, about 2.5% of ALL apps turn a profit - the rest are unprofitable. Therefore, the app market will implode, it's but a matter of time.

Many apps also do exactly the same thing as a webpage would have. Where I live I have an app installed that keeps track of local collective traffic (buses, trains etc). The interface could be just as easily developed in HTML5 as an App, but they chose the App because that was the "new cool thing".

There are some apps, particularly games, banking apps, and utility apps, where having an app is critical. But most other applications? Might as well use a webpage.



"Corporate apps are indeed part of the ecosystem."

Corporate apps serve as front-end to internal systems of the firm, e.g. an ERP, a database, or a transaction monitor. Do we also count the costs of developing such apps as part of the SAP, Oracle or IBM ecosystem? Is there any method to decompose income statistics into their constituent parts so to accrue them to each individual sub-ecosystem?


Developing bespoke software that has no economic existence of its own and integrating it into back-end systems is part of the general IT service business. It is relevant for the Apple, Google or Blackberry _platform_ ecosystems, just not the app economy as such. It is the same distinction made between packaged software and bespoke programs; you simply do not aggregate the two to compute some kind of general sales amount or profitability of software.

And to be complete: when people talk about the "Web economy", I just do not think that this all-encompassing term makes much sense either.


@Per - the lengths people will go to to avoid admitting the obvious....apps are the new web. It doesn't matter WHY. It doesn't matter if YOU think web technologies are good enough or better.

The fact that these companies have a business that isn't about "the app" is OUR point. Yes there is Uber and Snapchat and countless others making big money because they have an app. This is that survival of the fittest, only a few make it really big that Tomi is trying to distract you with. Apps are the front end, the user experience on mobile for ALL manner of businesses that have nothing to do with selling the app itself.

On the PC, these same companies use web technologies. On mobile, they use APPS....far and away more than the mobile web. They aren't bothered by Apple/Google's cut of app sales because the app isn't how they monetize their business.

I've made a career out of corporate web development (well, I started before the web). I never once made a single dollar making a business out of a website ala Google, EBay or FB. The web was simply a tool to facilitate my employer's/customer's real business. The "millions of mobile developers" - far and away most of them are doing "work for salary/hire" just like I did on web and do on mobile. But on mobile, the tool of choice -- far and away -- is native iOS and Android apps.

The smartphone is the new computer and apps are the web.



Sorry, my head just hurts.
Who is paying you for writing this crap? Who is 'WE'?

So, from your post I get the following: People like YOU who are heavily invested in the whole thing advise others to use apps instead of the web - not because apps are better but because apps are 'the thing'. Obviously no reflection about the solution's viability is going into the decision making, just that moronic 'we need an app because apps are the new web' mantra. The only problem is: There is no logic behind it, just some short-lived coolness factor you can project. Pity the fools that fall for it.

Well, the app craze will die eventually (due to the cost factor I already mentioned earlier this is inevitable), the web won't - and people like you will look like fools.



Yeh they said that about Rock n Roll as well. Its still here.

ANyway, is your entire argument simply that apps cost too much? Thats it ? Because thats pretty weak.

Look what it used to cost to get a record out. Or have a book published? In the 1960;s you could have argued that books have no future. Now its close to free to publish a book. What happens when apps are just as easy to code as a web page? Or only (pick your metric - 3x or 2x or 1.5x or the same?)

Also technology will lower the cost of building apps, and there is the whole 3rd world thing (enabled by the web), I pay some smart coders in Brazil or India or wherever to code it for 10% or less what it costs in the west. If its a hit then I can pay more to expand it, if not no harm done. And software technology makes it easier, look at Swift for Apple, its only a matter of time before Google copy that, there will be other frameworks that make it easier, faster cheaper.


The "we" are those of use who've poked hole in the ludicrous notion Tomi has put forward that 1 in a million app developers make money while 1/10 of everybody in other businesses do. That is one serious heaping stinking pile of dung he foisted off as analysis.

And no, I could care less what anybody here choose to develop for - web or apps. But as this blog is about unit share -- the app ecosystem issue is relevant. It's not just about "is it a good business to invest your time hoping to create a hit money making app".

Take the recent IBM/Apple partnership. IBM has committed to creating 100 vertical industry apps and put the weight of it's 100,000 consultants behind taking them to market. You think the clients that purchase these apps and consulting services are going to switch platform from the iPhone to Tizen/Sailfish/Blackberry at the drop of a hat to shave a hundred or so off the price of the handset/tablet?

Both the Android and iOS ecosystems have reached a level of both being self sustaining and a barrier to entry for anybody else trying to break in. Just ask Msft.

It's true that on the desktop, web technologies had gone a long way to making the OS irrelevant. It didn't hurt that 90+% of PC's were on windows so that when you did need to make apps, it was for one primary platform. But, linux and Mac greatly benefitted from the move to web apps as the main platform.

Who knows...maybe in a future far enough away that we can only speculate...web apps will again take over. But that's not now, and it's not in the near future. We started with web apps (you know, the original iPhone) and then MOVED to native apps. For many and various reasons.

And now it is an app world.



Re.: cost of apps.

Sorry, but you are wrong on all accounts. There's several factors that will never make app development equal costs of web sites. None of them have anything to do with actuall programming costs but with the basics of how apps get deployed vs. how web sites get deployed:

1. You need far, far more thorough testing to ensure that an app works properly. Don't and you risk submission failure.
2. The submission process itself is time consuming, you can't just do a quick update or a quick bugfix, no - it all needs to go through the submission bottleneck. Preparing apps for submission also costs time.

None of these apply to the web. You can just quickly update your script, do some quick checks that it all works and roll it out.
And should some error occur, just do a quick rollback.


In all these vague reports, there's always one important thing missing: What's the purpose of an app?
If the purpose is to replicate the functionality of a native PC program, no problem, that's all fine and legit. This is just normal and uses a computer for actual computing, just like on PCs.

However, if the purpose of an app is to replicate the functionality of a web site, I have to say that things are going very, very wrong here. This amounts to creating an app because someone does not understand the concepts of the entire system.

So, ultimately it all boils down to the simple question: What's the respective percentage of these two types of apps in the market? We already know some points from the chart you yourself linked to:

The vast majority of app use consists of gaming, social networking, watching videos on Youtube and running utilities. This makes up of roughly 80% of all app use. But - and this is the but I am emphazising - none of this constitutes app-as-web use! (I'll intentionally ignoring Youtube and social networking here because these are special cases that do not translate well to other use cases. Both of these would be nice to have as apps on Windows desktop, too, btw.)

So for app-as-web use we are left with 21%, 14 of which are actual web browser use, leaving us with just 7% that's relevant for everything else.

So, I'll agree that currently it's an app world, no doubt about it. People are factually using their phones to run apps.
What I do NOT agree with is the conclusion you make from this that apps are the new web. There's nothing in these numbers to even remotely suggest it.

Just for comparison: I use my PC roughly 70-80% for non-web use (like developing apps and other software, playing music, chatting via Skype etc.) It's roughly the same distribution of time across the same type of applications. So even on a regular PC you won't suddenly get 80% web brower usage - and if you count stuff like Skype into accessing the web, you'll get similar usage patterns - again with the exception of Facebook and Youtube whic do not have a PC app - because if there was, the numbers would probably be pretty even.

So, all this shows that smartphones are increasingly used JUST LIKE A COMPUTER - where you also run native programs in parallel to the web brower. So, hardly any surprise, that's what all the experts have been predicting for quite some time.

Don't let yourself be fooled by a handful of huge services skewing the numbers because they only have native apps for mobile platforms - because that'a all what is different.


@RottenAPple "So, all this shows that smartphones are increasingly used JUST LIKE A COMPUTER - where you also run native programs in parallel to the web brower. So, hardly any surprise, that's what all the experts have been predicting for quite some time."

So are we talking cross purposes here? Because I'd agree with that. And I'd agree with Tomi's analysis that teh "app business" overall doesn't make money.

But I say a big fat "so what" to that. As said neither do many other fields. Games, music, books, PC apps, web sites. But due to the way money is invested, multiple (generally small) different "investors" across millions of attempts, perhaps its more akin to a lottery or the slots at Las Vegas for that matter.

And I dont see anyone saying "well the lottery business loses money, only 1 in a hundred thousand make any money so that's going to implode". Or that "people will soon stop going to Las vegas because no one makes any money at the roulette wheel".

We have musicians, authors, game and general app writers, and little old ladies pulling the handles in LV, all thinking they will get lucky. And when one drops out, another fills their seat.

Replace Tomi's analysis on Apps with "Roulette" and the same argument holds and is equally fallacious.

Per "wertigon" Ekström

@AppleTurfer: Still missing the point.

Look at it this way then. I can design an app for $10 000 per platform or a simple mobile-first webpage for around $2 500. If I'm a company, why would I wish to pay $30 000 (iPhone, Windows, Android) or even $10 000 (Android only) when I could pay $2 500 to reach 90% of what I want, with less bugs to boot?

Because apps are the new web? Sorry, not buying.


"In fact, about 2.5% of all musicians makes a living from music therefore the music market will implode, it's but a matter of time."

It already has. Look at music record numbers between 1990 and 2014...

"In fact, about 2.5% of all authors makes a living from books therefore the book market will implode, it's but a matter of time."

The vast majority of authors make their living in other ways than writing books. They do not depend on their books as their income. Also, these days books are mainly created for either spreading knowledge, or for making publishers money.

"In fact, about 2.5% of all PC games makes a profit therefore games on PCs will implode, it's but a matter of time."

App:Games is a very different market from App:All_Apps.

"In fact, about 2.5% of all web sites makes a profit therefore the internet will implode, it's but a matter of ti"

Oh, please. Most websites are not created with profit in mind - rather, it's a marketing budget.

Most apps, however, are developed with the expectation that they will return a profit. They will not. The only apps that will survive are the few that return a profit, or the few that do not need to make a profit. That is what I mean with the market imploding. The rest? Dead within a few upgrade cycles. Once Android hits 5.0 or whatever version that will be incompatible with 4.x, well... That's the day shit will hit the fan.

Now, we can argue about this to the end of days, or we can agree to disagree and let time run it's course. Doesn't really matter either way.


@Per - I don't disagree that there's a good case to be made for mobile web over apps for MANY use cases. However, it's clear that apps are ruling on mobile. We can debate that they SHOULDN'T or that perhaps in the future they won't. But we've had 7 years since the original iPhone redefined what a smartphone was (even though the app store came out the next year)....and in all that time, the mobile web has not achieved what your reasoning says it should.

Everyone feels the pain of having to support more than one platform. There is simply too compelling an advantage in user experience with native apps over mobile web apps. If this were not so, then your reasoning would have ruled the day already.


FYI, More and more recent obituaries for WP:

Tomi T Ahonen

Hi everybody

I removed some comments that were not appropriate (ie didn't read the article, so cannot contribute to the discussion).

About the comments that you cna't do Facebook or Twitter or Uber etc on SMS. I totally understand that is the conventional wisdom. And that is EXACTLY why I maintain this blog and try to help the industry. What is the biggest social network of Pakistan? It is not Facebook and its not Twitter. It is SMSall. SMSall has over 10 million active users including Pakistan's Prime Minister already years ago. SMSall has been winning awards in many mobile industry events. It is somewhat a Facebook and Twitter clone, ie has very similar user features as Facebook and Twitter form likes to hashtags. It is based on SMS ! It pays (discounted) SMS rates to the carriers who love it. Its on all networks in Pakistan. Its not primarily funded by advertising although it also does have ads. And it was launched by a couple of smart university students. Yes, a genuine garage operation. Launched four years ago so well into the global hegemony of Facebook. Its now spreading to other countries. Some in the discussion thread think its not possible for a start-up to do SMS based services and SMS is not suitable for advanced 'modern' services that say Facebook or Twitter would do. Utterly untrue, based only on ignorance and prejudice. Go check out SMSall and you will see.

Meanwhile Uber? Lovely service and app. And can you do uber-like services on SMS? You betcha! Check out just in India such taxi services as Autoraja, Autowale and mGaadi. Again, you don't need to be a mobile operator or giant TV studio etc to do SMS based services. You need to be clever about it.

That is the purpose of this blog and my books. To help my readers find examples of where success has been discovered in the mobile opportunity. Not to follow the latest shiny object like sheep, but rather discover the real money-making opportunities in the fastest-growing giant industry of the planet. And again, as Peggy Ann Saltz teaches in her latest book, if you're an app developer, you should look very closely into mobile messaging (SMS and MMS) to add to your revenues, you customer engagement and expand your offering. Like who? Well, take Square in the USA, the mobile payments solution. They too have added SMS to their offering, so that users can send money to even those US mobile phone owners (more than a third of the phones in use) who don't yet have a smartphon

You don't have to take my word for it, but back in 2008 I told you on this blog when the apps hysteria was starting, that a far better opportunity was in premium SMS. And once again, I was proven right. I do know this industry...

Tomi Ahonen :-)

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