apps get real

Perspectives on the Phenomenon

MAY 27, 2009

And then there were apps

Well, that's what it's felt like since the summer of 2008, when Apple launched its spectacularly successful App Store for the iPhone and iPod Touch mobile handsets. Less than 12 months later, apps already feel like they've been here all along. Why?

“When the iPhone launched, it was a $500 piece of crap. Now, with apps, it's a mini-computer.” Ryan

54% say apps have changed how they think about their phone

Perhaps it's Apple's relentless advertising, or the steady banter about apps at bars and dinner parties, or the fact that seemingly everyone in the mobile industry — from handset manufacturers, to software developers, to auto companies — is scrambling to get in on the app action.

While apps have certainly received plenty of press and attention, we feel that the coverage has been piecemeal — focusing largely on the novelty and excitement of apps, while overlooking the more important questions about how apps and app-phones fit into people's lives, what benefits they derive from apps, and what value they create for businesses.

To fashion this picture, we conducted primary research including ethnography with heavy app users, detailed interviews with app coders and entrepreneurs and lastly quantitative research with app phone and non app phone users. We've shared some of the findings here and will be adding additional pieces over the coming weeks.

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READ EXECUTIVE SUMMARY »

EXECUTIVE SUMMARY

Beyond party tricks

For mainstream users, iPhone-style apps have fast become essential tools for modern living.

Kate is a full-time grad student. She also has a full-time job as a designer. She knits in her free time, is an avid photographer, and loves to cook. She runs regularly, travels, and is trying to eat more low-sugar foods. "I'm ambitious and I've got a lot of energy, so I'm always looking to make the most of my time," she says. Kate life is rich in diversity and texture, and she's determined to make the most of it — with help from all the apps she's loaded on her iPhone.

Kate is one of several dozen people profiled by gravitytank, a Chicago-based strategy and design consultancy, as part of a comprehensive new study examining the social, cultural, and technological impact of today's mobile software applications. As part of the survey, gravitytank:

- surveyed 804 smartphone users, 301 of whom own app-enabled phones (either Apple's iPhone or HTC's G1) to develop a quantitative picture of how they use their handsets and integrate apps into daily life

- studied (ethnographically) 20 app-phone users in their native environments

- interviewed 20 mobile app developers to understand the business opportunities they see, the challenges they face, and the realities of what it's like to compete in an increasingly crowded app marketplace

This much is clear: app-enabled phones are transforming the way we live in meaningful ways. App-enabled phones herald the rise of a new mobile computing platform that culminates a revolution in miniaturization, connectivity, and speed that has been guiding the technology industry for many years. This shift is having deep impact on how people connect to each other, how they inter act with brands, what they buy, and how they buy it. Less than 12 months after Apple opened its App Store, these changes are already having a direct impact on people's daily routines and be haviors, because they tap into a deep-rooted desire to lead more optimized and productive lives. gravitytank's research reveals that apps and app-enabled mobile devices have become digital Swiss Army knives for modern living, because they provide con sumers with near-instant access to the information and services they need to enhance the opportunities each day presents — any place they go.

For example, Kate doesn't use apps frivolously. "I don't need iFart, iGirl, or iBeerpong," she says. Instead, she uses them to get more done personally and professionally, to track and achieve goals, and (every once in a while) to have some fun. "I just want to get the information I need faster and better," she explains.

Kate is not alone. According to gravitytank's research, 50% of app-phone users view apps as essential tools for getting more done and staying organized. They view apps as an indispensable tool to manage information, tasks, work, and relationships in their busy lives. The profile of today's app users doesn't match the male-dominated, business-focused image of the stereotypical smartphone owner. The new generation of serious app users is gender-balanced and highly educated. Their ranks include plenty of full-time moms and college students.

What's consistent across these users is that they're time-pressed, and they want help: 78% of app phone users believe there are never enough hours in the day, and 77% report they are always looking for ways to use their time more effectively. That makes the fact that app phone users report spending, on average, two hours per day with their phones, with almost 40% of that time devoted to app use (not including text, email, and calls), all the more remarkable. Most of that is spent in short bursts — our survey shows that app users interact with their phones 30 times a day. All that time spent with app-phones comes at the expense of other devices: Serious app users report that they now use their TVs, laptops, and MP3 players less because of the functionality enabled by their mobile apps.

Users who see apps as essential tools to get things done are willing to pay for their benefits: 69% of these users tell us they have purchased an app in the last month, spending a total of $6 on average. Of the average 21 apps currently on their phones, approximately 25%, are paid. As Greg, a sales manager and app user from Chicago, told us, so long as an app delivers, "paying is a no brainer, if you think it's going to make your life better."

"Until very recently, 'mobile productivity' meant email and calen dar access — the tools you use in connection with your job," says Michael Winnick, managing partner with gravitytank. "With the shift to apps, we're seeing a much broader definition of what it means to be productive. In addition to calendars, to-do lists, and note-taking tools, the category of users we call Life Optimizers are equally attached to the apps they use for nutrition, exercise, finance, shopping, hobbies, and access to media content. In the same way that the distinctions between "life" and "work" have become increasingly blurry within the population at large, the new definition of productivity includes these life-enhancing tools alongside such standbys such as spreadsheets, instant messaging, and presentation slides."

Put another way, apps are a very personal kind of software. Indeed, it's useful to stop thinking about them as software at all, and instead compare them to music. Like music, apps are a social phenomenon — we love to talk about them, try them, compare them, and share them. They have one-hit-wonders, instant clas sics, and America's Top Forty (in the guise of the Apple Top 25). They have different genres, from somber, to shocking, to frivolous. And just like music, the collection of apps on our phones tells us — and others — something important about who we are, what we care about, and what we want to become.

The comparisons to music hold for app developers as well. With the advent of dedicated apps marketplaces like Apple's App Store, mobile carriers no longer control how apps are distributed. The result has been a stunning proliferation of creativity and in novation among software coders and entrepreneurs. The new apps marketplaces are open to one and all — from self-taught teenagers who build apps after school to venture-backed startups founded by wannabe software moguls. With tens of thousands of app titles to choose from, competition is fierce and the pressure to land a spot on a Top 100 Downloads list is intense. Suddenly, app development has become a hit-driven business that places a premium on creativity, utility, and user-experience. To generate real sales, however, developers need to learn new skills; namely, the ability to promote and market their apps in a crowded sales environment.

gravitytank's research indicates that app-enabled phone hand sets that will change how we organize and live our lives in pro found ways. As this trend continues, we anticipate these changes will extend beyond individual phone owners, and even beyond the traditional domain of the technology or mobile wireless indus tries. Apps are poised have a dramatic impact in a wide range of fields, from education and health care to retail and financial ser vices. "As software, apps are very lightweight," says gravitytank's Winnick. "Yet they represent something large and important: the advent of a mobile technology paradigm that may be just as sig nificant as the birth of the Web during the mid-1990s. When we look at how apps will influence consumer behavior and the way in which software will be developed, distributed, and sold, we see that we are just beginning a social and technological transforma tion that will have major implications for years to come."