Mark Suster wrote a provocative, incredible post on Apps are Crap. Here’s my response:
1) You understate in my opinion the sheer impact of having a one device/one os keep 70% of revenue for developers. Yes, maybe Apple has been a bit of a bottleneck (although in developing our app we haven’t seen the large problems attributed to other folks) — but it is still fundamentally an open system where ANYONE can develop and ship an app to the market. So for the first time, I as a developer have a huge potential return on my investment — building for one hw/os combo. I can keep revenue, and I don’t have to spend six months convincing a BD Director to “accept” my app. That was and is enormously beneficial to the industry — and really is unlocking the efficacy of these mobile devices to the “normals.” This simply had to be done.
2) So if you are a brand or any business, you want audience. If the audience you want marries well with the iPhone and iPod audience, for the first time you can develop a consumer experience that is imo much more than a “web site.” And of course it can make economic sense to develop for the platform. The point is, with the iPhone App you’re going to be able to develop a much more feature rich experience. So on a pure return on investment perspective – especially for retail, cpg, media – I think it’s going to make a ton of sense to develop an app. BTW, I co-produced the Apps For Brands conference in September with AdAge, so this argument is based on tons of conversations.
3) I don’t think it’s about the cut of revenue for Apple on the sale of Apps. As I’ve written many times before, most apps will be free. Apple is trying to sell hardware. I think there is a massive secondary revenue stream for them if they become the dominant platform around their future version of adwords, as I’ve written here.
4) The problem for developers, even in an html 5 world, is different codes to leverage different functionality for different OS/hardware combinations (does it have GPS or not, e.g.) Android helps, but doesn’t fully solve this problem. You’re going to have multiple teams and projects either way to go after devices – and it’s going to be based on different functionalities for different devices; and different market shares. In the same way folks are now also developing for Facebook – different functionality.
5) Even in a world where everyone gets to a browser that can figure out the native device capability and somehow standardize on all the calls, there is still the problem of discovery. Pagerank won’t work , in my opinion, for the location-based mobile services all our great companies are going to create, because they won’t be based on linking. Hence what we’re doing at Appolicious. But the adoption problem will remain difficult for developers.
If you want to provide a truly differentiated best-in-class experience on a mobile device right now, you’ve got to develop an iPhone app. Over time, if these other problems with the browser, etc., get solved, that could change. But in those next three years the iPhone will also continue to innovate and improve. A developer will need to prioritize their precious resources against potential returns. Right now and for the near future Apple will provide those returns.