The Evolution of the App Stores

Opinion

In many ways, Apple and Google are following similar paths. At their annual developer conferences, Google I/O, held last month, and Apple’s WWDC, last week they both announced updates to their development platforms. Google is making major improvements to Android Studio, while Apple is continuing to invest in Swift and announced Playgrounds, an exciting new way to learn how to program in Swift. There were also areas in which the focus of the two conferences diverged. Apple announced more progress on their privacy initiatives, while Google remained highly product-focused, announcing numerous apps, new pieces of hardware, and more development tools for VR.

Team Apptentive attended both companies’ conferences in San Francisco, and we caught a glimpse into how the two platforms are evolving, and what it means for developers and consumers alike. Here are three of the most important takeaways:

1. Customer experience is a high priority for both companies.

As customer feedback becomes critical to creating a better experience, Google announced several components of the Play Store that will support companies in their quest to understand consumers. Two customer-focused announcements stood out: the reviews API and the customer case studies. The reviews API enables developers to respond to customer comments in Google Play, a huge advantage for companies that understand apps are now an extension of their brands. In announcing the reviews API, Google presented customer case studies of numerous publishers who shared a lot of evidence that talking to their customers has significantly improved their app ratings, customer satisfaction, and retention. The theme: building customer relationships creates a more enjoyable user experience and it leads to better monetization over time.

Consumers are using more apps than ever, creating an opportunity to increase monetization and user experience at the same time. Apple’s creation of single sign-on should allow for a smoother in-app experience in third-party apps. It’s proven that consumers spend more money when the barriers to entry are lowered, and the ability to sign in to media apps with ease will certainly increase the amount of content they consume, while also increasing the variety of the media sources. Today’s “cord-cutter” consumer experience is marred by a variety of frictions introduced in the login process; removing that will likely accelerate the movement to online viewing sources. While this might give some of the media companies concern, we see that today’s situation is similar to the state of online music in the early 2000s: There is so much friction in the process that consumers are more likely to seek out illegal content sources.

2. Success of the app stores starts with developers.

Both Google and Apple announced continued investment in their app stores, specifically around developer support. Google’s strategy seems straightforward: The more support they can provide to Android developers, the easier it will be to develop for Android. That will drive more apps, which will ultimately drive more consumers to Android. Competing with Apple in this area has been challenging for Google.

Apple’s service revenue is growing, and they’re making investments to compete more directly in producing original content (against the likes of Netflix, Amazon, etc.). Apple holds the throne in app store monetization, and until Google is able to catch up, iOS will likely remain the first choice for developers. Google’s aggressive move to release the Firebase mobile and web back-end infrastructure suite, largely free, to developers on both iOS and Android indicates their viewpoint on how to make developers most successful: through more tools and platform support.

Apple is taking a different approach to developer support, announcing Swift Playgrounds for iPads. Aimed at kids, Swift Playgrounds teaches people of all ages to code using Apple’s new language. This tool should help Apple court the next generation of developers, while ensuring that today’s developers are able to bet confidently on the Swift language. In addition, Apple’s new subscription model incentivizes app developers to create strong customer relationships and emphasize loyalty in their business models. The revenue sharing model remains at a 70/30 split for the first year, but now developers who have subscribers for over a year will see their share rise to 85 percent. This initiative should push developers to be more thoughtful about their customer experience. Both consumers and app developers will reap the benefits of the new subscription model.

3. Apple continues to highlight leadership in privacy.

Considering Apple has been outspoken about their stance on privacy, it’s unsurprising that Apple announced differential privacy—a system in iOS 10 that will mask data to prevent the compromise of individual identities while still providing companies with accurate data about their customers. Last year, Tim Cook publicly criticized Facebook and Google for their privacy policies, and Apple took on the DoJ early this year after the FBI ordered the company to create a backdoor to unlock a suspected terrorist’s iPhone. In a world where data and privacy are equally important to consumers and businesses, their existence should not be mutually exclusive. Differential privacy works to ensure this remains the reality.

Google, on the other hand, didn’t announce any privacy initiatives at I/O, focusing largely on product developments and the massive powers of its artificial intelligence and machine learning research.

What’s interesting about this differing perspective on how to provide value to consumers is that Apple clearly has to work on more personalization capabilities in order to satisfy today’s consumer. From contextual messaging to the ability to use Siri to order a Lyft, Apple showed off a lot of features that appear to be similar to capabilities available on Android. With their strict stances on privacy and their gradual opening of the platform to developers, Apple is having to walk a thin line, and its balancing act is fun to watch.

Finally, one thing that was obvious from both conferences was that each company thinks first and foremost about mobile. At I/O and WWDC, the primary narrative was about the mobile consumer (i.e. look at how many searches they’re conducting), the importance of tracing the consumer journey (only possible when connected to a mobile device), and the global opportunity in front of us (because almost every human being will own a mobile device).

We live in a mobile world and the world’s largest operating system providers are working hard to maintain their positions and enhance them.

Robi Ganguly is CEO and Co-Founder at Apptentive, a company that helps app makers boost ratings, drive downloads, increase loyalty, and earn customer loyalty. Follow @rganguly

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