A ticker on the front of Apple’s website rolls over relentlessly, increasing by about 500 a second as it moved past the milestone 25 billion mark.
It is counting the number of units of application software downloaded from the company’s App Store – and the rise of a business that barely existed five years ago, but which now dominates daily conversation so much that the phrase, “There’s an app for that”, has become both an offer of help and a joke.
In the last three months of 2011 alone, the company paid out more than £447m to developers for sales of their apps – a figure which does not include advertising revenues generated by free apps.
The counter is expected to hit the target by early March. By then, users will have spent about £3.6bn buying apps through the store, of which Apple will have passed on £2.5bn and retained £1.1bn.
In some cases, it is schoolchildren who are writing the apps: last year Robert Nay, then 14, hit the top of the App Store charts with his game Bubble Ball, which took him only a month to write but was downloaded millions of times. Where once schoolchildren swapped the names of favourite bands, now they can name apps: Angry Birds, Cut The Rope, WhatsApp Messenger, Temple Run, FatBooth.
The App Store contains more than 550,000 apps, some of which have made their authors rich, and many of which have offered a solid source of income for a new breed of business specialising in writing apps to order for clients large and small.
“What we’ve seen over the last four years has been nothing but exceptional,” said Matt Miller, co-founder of London studio ustwo, which worked with Barclays on its recent Pingit mobile payments app.
“The app industry has taken the world by storm, creating a micro-economy in its own right and creating jobs for hundreds of thousands of talented professionals worldwide. A successful app can now be the difference between complete anonymity and global digital fame.”
Apps are even changing our online shopping habits: more than 65 million people have downloaded eBay’s apps for various devices, spending £3.2bn on the auction service from mobile devices in 2011. This is expected to rise to £5.1bn in 2012.
Amazon has tried to encourage people to compare prices in stores with those online using its free app (in the hope of winning their business).
But even as Apple prepares to celebrate its 25bn downloads milestone, Google’s Android operating system is coming up on the rails: despite launching nearly two years later, it has more than 400,000 apps, and in December 2011 passed the 10bn downloads mark.
Even Research In Motion’s BlackBerry App World, which has generated 2bn downloads from its catalogue of 60,000 apps.
Apple boss Steve Jobs at first resisted the idea of apps – fearful that a malicious app could bring down whole networks and, with it, Apple’s reputation. It took the combined efforts of Scott Forstall, the head of iPhone development, and Phil Schiller, Jobs’s longtime head of marketing, to change the chief’s mind. But once Jobs announced the change, in October 2007, the floodgates opened
Just as it did not invent the smartphone or digital music player, Apple did not invent mobile applications. They had been around for years on phones from companies such as Nokia, and PDA devices from Palm and others. But they had tended to be awkward to use.
As with the iPod and iPhone, Apple took the clunkiness out to make browsing, buying and downloading simple. And it rebranded the little computer programs as “apps”, complete with catchy slogan and TV ads.
There have been surprises along the way – such as the success of fart apps, which just make rude noises, or the bizarre “I Am Rich” app, which did nothing except show a red glow but cost $999 (£630).
Industry analyst Juniper Research estimates that more than 31bn apps were downloaded to mobile devices in 2011, and predicts that by 2016 mobile apps will generate $52bn of revenues – 75% from smartphones and 25% from tablets.
Apps, in short, have become a thriving business segment – available to everyone from the bedroom coder (who, for $25, can write and upload an app to the Android Market; for Apple, the cost is higher – you have to write it on a Mac and it costs $99 a year) to the biggest companies.
Apps also play a crucial role in many of the business models disrupting established entertainment and media industries. Music service Spotify’s mobile app has been a key factor in its growth, with 85% of its 3 million subscribers paying £9.99 a month to get mobile as well as desktop access.
Apps have also been important for streaming TV and film services such as Netflix and Hulu, as well as for the BBC’s iPlayer and BSkyB’s Sky Go – the latter now attracts 1.5 million unique users a month.
The top five free iPad apps are for TV catchup services. “I wouldn’t want to be a broadcaster or advertiser looking at this,” said one insider.
In the games world, apps have been at the forefront of new “freemium” model where games can be played for free but make their money from in-app purchases of virtual items and currency.
Meanwhile, newspapers and magazines hope apps will provide a stable subscription-based revenue stream to make up for declining print sales. UK publisher Future took £638,000 in new digital revenue.
The App revolution continues to gain momentum. If you have an idea for an app or a business that wish to go mobile, we would love to hear from you. Please drop us a line to email@example.com.