Does The App Gold Rush Include Web Apps Too?

There is a lot of money to be made in app development and that number is expected to grow phenomenally into the future. This year alone, for example, app revenues are expected to grow 92 percent versus 2010, according to Canalys. Whether they be for handsets or tablets, iPhones or Android devices, apps are becoming big business. Over the course of the next four years, the app marketplace is expected to grow in revenue 50 percent each year through at least 2015. After seeing $7.3 billion in revenues in 2010, apps are expected to generate $14.1 billion in sales this year. By 2015, that number will surpass $36.7 billion. According to Canalys, these numbers suggest an ever-changing consumer marketplace where mobile devices rule. They state:

Consumer behavior is driving a major shift in the mobile space, as end-user appreciation of the convenience of connected mobile apps and web services grows. Consumers typically take their mobile devices everywhere, opening new market opportunities for time- and location-specific services.

While it is clear most revenues will be tied directly to Apple’s App Store and Google’s Android Marketplace, where so-called native apps exist, Canalys believes developer-operated stores shouldn’t be ruled out. They believe having a branded app store offers developers a lot beyond direct revenue. For example, these signal-use stores could help build consumer experience and bolster customer loyalty. According to Canalys Analyst Tim Shepherd:

“‘Some operators are concerned that having their own branded app stores will appear as a throwback to the "walled gardens" of the past,’ said Shepherd. ‘While consumers would probably object to operators installing their app stores in place of vendor ones, there is no reason for operators not to pre-install their app stores alongside vendor stores to compete on user experience.’”

Personally, I find the possibility of developer-operated app stores suspect, at least for native apps. First, would Apple and/or Google even allow them? Unlikely. I can see no possibility where either company (or Microsoft for that matter) would allow developers to go it alone. Quite simply, there is too much money at stake. And yet, web apps are a different story. For example, companies like Rovio would most likely be successful in marketing its next Angry Birds game as a web app. This assumes, of course, the app would work just as well through Mobile Safari as it does via a native app. Of course, the majority of developers aren’t Rovio and they lack the revenue stream to not only develop a web app, but also the money to promote the app. Therefore, while vendor-related app stores could find some success in the future, I would be very surprised if most developers would attempt it. Still, there could be 36.7 billion reasons to do so. What do you think? What will app stores look like in four years? Let us know by leaving your comments below.

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