Steve Jobs was right about a lot of things, but there was one thing he got totally wrong with the original iPhone: the need for native, third-party apps.
The iOS App Store’s(S AAPL) tremendous success makes it hard to remember that Jobs wasn’t a fan of native third-party iOS apps at first, as his biography by Walter Isaacson later revealed. In 2007, when the iPhone was introduced, he tried really hard to sell outside developers on making web apps for his new smartphone. Only a year later, a combination of developer backlash, jailbreaking, and lobbying from his own board members did Jobs acquiesce and ultimately unleash the platform that would make the iPhone into a must-have device.
Apple opened the App Store on July 10, 2008. Five years later there are more than 900,000 apps for sale and more than 50 billion have been downloaded. In those years, individual software makers, small startups and large corporations alike have been able to build thriving businesses off of the platform. Apple says it has paid out $10 billion in revenues to its third-party app makers.
Apple has made many changes since the Store debuted five years ago: the biggest one is that there are far more detailed and publicly available guidelines for developers using the SDK. And the company has made strides improving search and highlighting the best quality content, and coming in iOS 7, it is bringing users automatic app updates.
But looking ahead to the next few years — which will begin as third-party developers grapple with a dramatic change to the platform — it’s clear Apple still has much work ahead of it if it’s going to continue to be the No. 1 choice of developers and an important force in driving iOS device sales.
Here are five questions about the future of the iOS App Store.
How long will it enjoy top billing among mobile developers?
Having 900,000 apps for sale is an incredible number, especially in just under five years. But it’s not unusual: though it had a much slower start, Google’s app store, Google Play,(s GOOG) now boasts a number very near that. Android long ago overran Apple in number of smartphones sold, and it’s not all that unlikely that the total number of apps for sale will be next due to the sheer size of the Android customer base.
Whether Google catches up or passes Apple on this aggregate number doesn’t necessarily matter that much to consumers. How many apps can one person download, after all? What will matter, however, is if Apple’s advantage in the quality of apps for sale slips away. That doesn’t appear likely any time soon, but that could happen if developers were to choose to start launching their apps on Android, or some other platform, before iOS.
Apple has enjoyed this advantage for the past five years — and it’s been hugely important. Numerous wins — having Angry Birds first, having Instagram first, having Vine first, and having exclusive quality content like Letterpress, Clear and Instapaper and plenty of others — have all helped contribute to the iPhone and iPad gaining and retaining popularity with consumers and business users alike. Apple’s ability to maintain this advantage will be key to the continuing popularity of its hardware.
When will Apple make truly useful App Store search?
Despite its success, search has long been the App Store’s Achilles heel. From the speed of search to the surfacing of correct results, to the presentation of those results, this has been an annoyance for users and developers. In the last few years, several startups have cropped up to provide better App Store search, from web-based search engines to other iOS apps that highlight and filter the best apps. Apple ended up acquiring one of them, Chomp.
That acquisition took place in early 2012, when Apple had just 550,000 apps for sale. That number has almost doubled in the year since then and there’s still plenty of room for improvement. Despite some tweaks to the search function and display of results in iOS 6, it’s still not enough: search is still too slow and it’s a pain to page horizontally through long lists of results.
In iOS 7, Apple has added one big new search feature: search by location. While it doesn’t address the problems with keyword search, it could be an interesting way to discover useful apps for particular situations. iOS 7 will also return to a vertical list view for results, which should make navigating them a bit easier than in iOS 6.
Will Apple find a way to end the gaming of the App Store’s top charts?
From time to time, Apple has cracked down on iOS app rule breakers, and this year when it kicked the well-funded and well-known app discovery app AppGratis out, it nearly started an international incident. But despite the French government’s anger, Apple didn’t budge, and the reason was that AppGratis was rumored to be selling marketing assistance that would guarantee a top spot in the App Store charts. The Top Free, Top Paid and Top Grossing charts in the App Store are key to driving huge amounts of downloads for an app, and making money for developers.
Though Apple has undertaken efforts to discourage gaming these rankings — through crack downs on incentivized downloads and more — the problem is still not completely cleared up, as many developers attest. It’s not clear what the solution is, but the existence of these charts at all are the reason companies spend so much marketing money trying to artificially rise into these ranks in the first place.
The answer might be more carefully curated Editor’s Choice picks and app features chosen by the App Store team.
When will higher priced apps become the norm?
Though free and 99 cents are still very much the norm when it comes to iOS app prices, developers are starting to realize that as the number of apps available for users to choose from nears 1 million, they’re going to need to rethink pricing. And if that price reflects not only the work put into the apps but the realities of keeping a business of making iOS apps afloat, it’s likely going to mean more $3.99, $4.99, $9.99 apps.
How will Apple’s push into emerging markets affect app sales?
But will those higher prices will turn off certain customers? A $5 app in the U.S. isn’t a lot for someone who can afford an iPhone or an iPad in the first place. But the future of Apple’s business isn’t upper middle class consumers: it’s the vast number of users in emerging markets where many of them are about to buy their first smartphone or tablet.
As the company pursues those customers abroad and here in the U.S., developers will have to think about how to price their apps accordingly. Android customers are notorious for their preference for free apps; it’s not unthinkable that iOS users with smaller budgets for technology may too. That, combined with the increasingly crowded App Store, may have serious implications for the independent developer community that has thrived on the App Store for the last half decade.
A preference for lower-priced or free apps could eventually mean lower revenues for all developers, but it may also be just what the App Store needs: an even clearer way to separate the wheat from the chaff. If iOS app shoppers become pickier and more price-conscious, it may mean that just average or bad independent app makers don’t do as well and only the best app makers will end up attracting the most downloads. And if those people making top-quality content can afford to keep making the best games and apps, then the cycle repeats, and Apple can continue to attract more customers with must-have apps on their mobile devices.