Tapping into the App Economy
Most days start and end with the opening of an app, like WhatsApp, email or social media. During the day, we swipe through our app library without a second thought.
Those bright little icons represent a thriving, growing economy of which every smartphone and tablet user is a part. Without it, our mobile phone experience would be quite different.
I am speaking about the App Economy.
The phrase “App Economy” first started to trickle into our consciousness in the early 2000s. Both Apple’s App Store and the Google Play Store were launched in 2008. As the tech giants competed to take the spotlight by offering us more features and functionalities, our eyes were opened to the idea of using our phones beyond making and receiving calls.
The app economy references the state of mobile technology where a mobile application is available for every service. The App Economy expands to include transactions that are made via a mobile app, such as a purchase from an online store, subscription, or even the cost to download the app itself. A great deal of app revenue is generated through advertisements and big data – with the most prominent in this area being social media, utility, advertising and productivity.
There was a surge in app development as smartphones began gaining in popularity with the first generation of iPhone and the other devices that emerged to compete.
Fast forward to 2021 and the future of the app economy is still rosy. Predictions by App Annie forecasted back in 2016, that by 2021, the worth of the global app economy would increase from $1.3 trillion to $6.3 trillion globally. The prediction painted a picture of robust in-app advertising and mobile commerce as an integral part of everyday life.
It may take some time before we see definitive numbers on the worth of the app economy in 2021, but looking around, I’d say apps remain as promising as they did back when we were amazed we could use an app to find our parked car or take notes.
More people than ever have access to mobile data. More people are spending more time on their phones than they are on their computers – that's for sure. So, it’s not surprising that app engagement is on the rise.
The app economy in the past year has seen considerable growth, despite lows other industries are experiencing due to the pandemic. Consumer spending in apps topped $100 billion globally from Jan. 1 to Nov. 29, 2020, according to Sensor Tower, a mobile app market intelligence firm.
Industry experts attribute the increase in app downloads, usage and engagement to the coronavirus-related lockdowns. Gaming apps represented a big chunk of app downloads and usage, but that changed to encompass educational, distance learning, remote work, productivity and messaging apps. In addition, health officials have leaned on the technology as a tool for contact tracing and distributing information during the pandemic, as we saw with the Guam Covid Alert app.
People seek new ways to purchase goods, learn, work, entertain themselves and stay engaged with loved ones. As app usage continues to spike, app developers are experimenting with their apps to entice more users and improve in-app experience.
We see a lot of attempts at innovation in social media. In November, Facebook launched a new integrated Messenger app that allows users to view and reply to direct messages from both Instagram and Facebook. Twitter also launched Fleet, a feature that deletes posts after 24 hours, similar to Instagram Stories and Snapchat.
In addition, apps bring new efficiency to our everyday lives. We can pay bills for multiple accounts without leaving our home. We can do all our shopping online without the hassle of waiting in line. Our Google or Apple accounts store our credentials, so we never have to remember our passwords. Apps personalize our experiences by allowing us to set up our individual preferences and requirements or by analyzing our shopping history.
Jobs in the app industry for many either remain steady or are growing, as it is with much of the tech industry. Apple announced in September that the App Store supports more than 2.1 million jobs across the United States. This is part of the 2.7 million jobs Apple supports across the country, and represents a 15 percent increase from 2019, which illustrates a continued demand for companies that create and design apps.
This year, we can look forward to major developments in the app economy that will further increase app usage and open up opportunities for businesses.
WhatsApp Business has been making moves since October and we could see their efforts come to fruition in 2021. The company announced on its blog in October, that it would be investing in expanding in-app shopping capabilities and plans to eventually offer hosting services in partnership with Facebook. In December, the service added a carts feature, which allows customers to browse a business’s catalog, select multiple products and send their order.
WhatsApp has been experimenting with making in-app payments available to more users, as well. The service was launched in November in India, one of the app’s largest markets. Prior to any in-app purchase capabilities, businesses could showcase their products and customers could select the items to purchase, but the business would have to rely on payment services, like PayPal, for transactions.
Another development in the app economy to look out for is new services from Google. In November, Google announced that in 2021 it would launch Plex, a mobile banking account integrated into Google Pay. These mobile checking and savings accounts are backed by banks and credit unions through the app to offer no monthly fees, overdraft charges or minimum balance requirements.
Any number of new apps could pop up as businesses decide to invest in developing an app to market and sell their services and products. Savvy business owners see the value in using apps to reach a broader audience. Having an online store or ordering process can bring in businesses that foot traffic or traditional advertising can’t.
In the long run, an app can also help build loyalty. A customer that intends to be a repeat visitor is more likely to download an app. Although – and I can’t stress this enough – it still remains important for every business to ensure that they have a website that is also mobile friendly.
For some of us, apps could become the way we work. We’ll either be using apps for collaborating or productivity, or as entrepreneurs, expanding our businesses, if we’re not doing so already.
I can say that apps will continue to play a crucial role in our everyday lives. There will always be “an app for that.”
— Jay R. Shedd is Senior Director of Sales, Marketing and Customer Service at IT&E, the largest wireless service and sales provider in Guam and the Marianas. He has more than 30 years of experience in the telecommunications industry.