Bad news for app developers. Consumers are downloading (and paying for) fewer apps in part because their basic needs have been largely covered by incumbents. Per an article by Daniel Thomas and Tim Bradshaw at the FT:

Smartphone owners’ waning appetite for new apps is casting a shadow over what has been a technology market hotspot and is fuelling mobile developers’ concerns that their best days of growth are coming to an end.

This is due in part to the fact that smartphone users, and PC users before them, really only use a handful of applications the vast majority of the time. Benedict Evans and Steven Sinofsky in a recent a16z podcast talk about this phenomena in the context of the history of computing. The fact is we humans only have so much attention and ability to master new applications. That is part why we see these cycles of bundling and unbundling of features with various pieces of software.

In an earlier post Evans wrote about this very topic and asked how this might play out in the context of LinkedIn ($LNKD):

One of the recurring themes of the consumer internet is the cycle from aggregation to disaggregation – bundling to unbundling. There is a lot of value in services that pull everything together in one place, but over time that value starts to recede, the lock-ins keeping people there weaken and the appeal of having separate, specialised products grows. And then, after a while, the appeal of aggregation starts to grow again. We saw this in the past with AOL, and now with Facebook on mobile.

Another real-time example of this phenomena is occurring overseas where the major messaging apps like Line, Kakao and WeChat continue to bundle additional services. Leo Mirani at Quartz talks about how the bundling of services under one roof is akin to what we saw in the 1990s as the web portals of the day, like Yahoo, tried to be all things to all people, with varying degrees of success. Mirani writes:

The business model may have changed from relying on ads to relying on games, but messaging platforms, hot as they are now, are a very old idea from some of the very same portals that shaped internet usage in the first place.

If we are to believe the Evans hypothesis the US is not very far along in the app bundling phase. At present we seem to have an app for everything but very few apps that try to do it all. The fact is that we really have only been carrying around true smartphones since 2007 with the launch of the Apple iPhone so saying anything definitive about user behavior is risky. It is interesting to see how overseas the bundling phase is far more mature than it is in the US. In any event it is fair to say that the pendulum between bundling and unbundling will continue to swing.

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