Apps Business Begins to Decline

Monday, 18 Aug 2014 01:20 PM

By John Blosser

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The iPhone and tablet apps business is shrinking rapidly, the Financial Times reported.

A Deloitte study, due out next month, finds that the financial profit picture of the apps sale game may be rapidly receding and nearly a third of smartphone users don't download any new apps for their devices in a given month, according to the newspaper.

The apps market may have become a victim of its own technological success as app development has become so advanced that those who download apps see no need to seek out newer, better applications.

Paul Lee, head of tech, media and telcoms at Deloitte, told the Financial Times, "Each additional new smartphone [owner] has less inclination to download apps, either out of apathy or, at a more global level, affordability. Ironically the better that apps get, the longer people will keep them, meaning people feel less inclined to look for new apps."

Apple Inc. recently and drastically discounted about 20 of its most popular productivity applications, such as iTranslate Voice, from $4.99 to $1.99, MobileFamilyTree to $6.99 from $14.99, WriterPro from $19.99 to $4.99 and PDF Expert from $9.99 to $4.99, according to blog Gottabemobile.

Lee told the Financial Times  that the study found that 31 percent of smartphone users do not download apps – in just a year, that has grown from 20 percent. For the ones who do download apps, the number has fallen from 1.82 from 2.32 in the same year.

This means, according to Ouriel Ohayon, chief executive of Appfile, "If you are not in the chosen 200 or 300 [most popular apps], it's very hard to make money in a substantial way on the app store," the FT reported.

"Early adopters have bought their apps and most new smartphone users are older and not included to rush out and buy lots of apps," Lee told Sky News.

"People like to say they enjoy change but they don't. They prefer the path of least resistance. It's a Darwinian process. Ironically, existing apps are getting better with tweaks and so people feel less inclined to look for new apps."

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