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Bye Bye Apps

by | Oct 23, 2018 | Detecon Innovation Institute

We are addicted to our screens and love our apps, especially messaging apps. But apps as we know them might soon be dead. China’s WeChat with more than 900m active users paves the way for a big change. They introduced Mini Programs in January 2017 and announced major improvements end of March, which allow all individual developers to create and submit Mini Programs to the WeChat team. Mini Programs are instant apps: no downloads no updates. They run within the WeChat messaging app and are available with just a click. Messaging becomes the super app and functions as a hub for other apps.

Google also just opened their instant apps program for limited testing – of course, Google lacks a messaging platform, but announced instant apps during their I/O developer conference mid-2016. The driver behind instant apps for Google is a more streamlined app development process across fragmented Android versions. The search company can easily integrate instant apps into search results, providing a better experience for their core product. Instant apps push app users to a just-in-time experience, forcing app developers to rethink their business strategy. Developer attention starts to go away from Apple and Google operating systems towards 3-4 global messaging platforms. With far reaching consequences.

A key advantage of instant apps is that users gain access through a click as opposed to browsing long lists in app stores and having to install loads of apps, which are rarely, if ever, used after the first download. Instant apps run in the cloud and connect to microservices seamlessly. WeChat’s wallet is a microservice and a popular digital payment mode in China. Full payment integration with Mini Programs is a big success for e.g. Mobike, a ride-hailing app, which allows users to book a ride through its in-app wallet function.

Examples of other microservices are voice control, image processing, translation, face recognition etc. All of them require high computing power and storage, which is limited on smartphones, and even more limited when you think of AR glasses, robots, drones, and other form factors. Instant apps solve this problem and connect to micro services on the server. Device storage and performance becomes less of a concern to users.

WhatsApp, Facebook Messenger, Snapchat and WeChat dominate the app store statistics. Messaging is the most used type of app by far; it is social by default, context-specific and connects to our personal preferences. More and more, commerce integrates into messaging because time, location and recommendation context are relevant for our buying decisions. No one wants a new app for every service or business they want to interact with. Within the context of a conversation or interaction, it makes sense to just click to use a functionality instead of browsing endless lists of apps in the app stores. Messaging is an obvious hub for instant apps.

I think instant apps are very user-centric and address key issues of app-filled smartphone screens. Functionalities are available when and as needed, without installment and performance limitations of your device. It is likely that the big messaging players, especially the Facebook universe, will join Tencent’s WeChat and try to get additional stickiness and new revenue potential through instant apps within their messaging platforms.

Apple on the other hand might want to block this development. Instant apps reduce the need for storage and computing power, limit app store revenues (US$ 8.4bn 2016 for Apple) and drive away developer attention from the OS as a strategic control point with apps being the selling points for those gadgets. The Apple store with its 2.2m apps, is an empire that Tim Cook protects with all his firepower. If Facebook and Tencent gain more power through instant apps, which brand of phone you use becomes closer to being irrelevant. Edge computing supports the trend and provides the future infrastructure to virtualize real time applications and microservices that have ultra-low latency requirements.

However, a fundamental issue is the lack of app discovery and easy monetization. WeChat Mini Programs are designed to be non-sticky and focus on few functionalities for users to utilize them quickly and go within their social and local context. Developers complain that so far instant apps are hard to share and promote. A discovery function could solve this problem, but still, without downloads, monetization remains an issue. In-app advertising might become the dominant way of instant app monetization, and that’s the story for Google with Android’s 82% global market share. Instant app monetization using Google’s advertising inventory could develop into a nice business.

With instant apps, Facebook, Snapchat and Tencent’s WeChat – with more than three billion users between them – become operating systems. When Google joins in, it could be a big change and a major threat to Apple and Telco-OTT partnerships for preinstalled apps might also become obsolete.

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