Google and the Future of Apps

Google announced yesterday something it’s been rumored to be working on for a long time: their first “streaming” apps, available as part of the Google search apps on Android devices. This is just one of a number of changes that might come to the way mobile apps work in the coming years. But one of the big questions is to what extent these changes will be driven by trying to better meet consumers’ needs and to what extent they will reflect companies’ attempts to pursue their own strategic objectives.

Google and app streaming

Google’s new model is one I’ve been interested in for quite a while. I did a consulting call with one of the largest tech companies in the world about a year ago and this was one of the main things we talked about. It feels like it is the single biggest disruption that could come to the way apps work today. Google is the most advanced in rolling it out, though Microsoft appears to be working on something similar. And there’s a reason why Google would want to pioneer this model: it fits well with Google’s overall strategic objective of reasserting the web over the app as the fundamental model for interacting with content on mobile devices. The reason? Simple: Google makes money primarily from web search and, for all its efforts to provide search results from within apps (100 billion in-app links so far), this still isn’t a perfect solution.

The question then becomes, does this model also serve consumers well? Or is this like so many efforts, from Google and other companies, primarily aimed at serving internal objectives and counter to what consumers want? What is clear is apps have become the dominant medium people use on their phones, with the browser and the open web used far less in most cases. However, the problem with apps as they work today is they’re fairly binary in nature: either you have them installed, in which case all their functionality is available (including in-app search), or you don’t, in which case they might as well not exist. The best most apps can do in a search scenario is pay to place app-install ads in relevant search results. In fact, this is exactly what Hotel Tonight – one of Google’s launch partners – does currently, but it makes for a pretty involved flow, which leaves you right back where you started, without any of the context of the original search:

Hotel Tonight flow

The new app-streaming model solves two problems for consumers: it includes content from within apps the user hasn’t installed and which would otherwise be absent, and it allows the user to access the content within the app in a familiar app-like context, without having to permanently install the app. You go from a five step flow that leaves you having to do your search all over again to a single step flow that retains context and leaves your device in the same state as when you started. For at least some scenarios, that’s actually very consumer-friendly. I suspect that half the reason we all have so many unused apps on our phone home screens is we install apps for single uses that we have no intention of ever using again and just never bother to uninstall them. App streaming mitigates this significantly, while giving you the option of installing the app if you like it enough to want to give it a permanent home on your device.

The downsides of app streaming

However, there are some significant downsides to the streaming model too. Today, Google’s app streaming model only works on very strong WiFi, only with a handful of apps (which have to be participating in Google’s app indexing API), and only for apps which don’t have web equivalents, including Hotel Tonight, which only exists as a mobile app. So the model is inherently limited, not least by having to have good connectivity. One of the major benefits of many apps is they continue to function fine even without good (or any) connectivity, since much of the content is stored locally. Streaming apps can, by definition, only work when you’re connected. And when you are connected, they’ll typically use quite a bit more bandwidth each time you fire up the streaming version of the app than if you had it already installed on your phone, since all the UI and other assets have to be re-streamed every time you use it. In markets with poor and/or expensive connectivity, this would be a very sub-optimal model.

Another interesting wrinkle is how business models would evolve to deal with app streaming. A single price for a one-off download of an app is utterly straightforward, but how would you price the same app in a streaming model? It obviously works best for apps that monetize in ways other than app purchases (which, again, makes Hotel Tonight a good launch partner), but it’s not clear how it would work for others. Perhaps apps might offer short free trials through a streaming model, with the option to pay to download and unlock additional features.

Other innovations in apps

Of course, app streaming isn’t the only possible innovation in applications. I talked a few weeks ago about Apple’s virtually unbreakable model of having every app  a user installs represented by an icon on the home screen and how that seems an increasingly poor approach. As such, I think what I call “headless” apps might well be another innovation we’ll see soon – apps can be installed but not take up space on the home screen. More broadly, notifications and especially actionable notifications will continue to grow as a way to interact with apps, perhaps in tandem with the headless model. There are so many apps which don’t really ever need to be opened, because all we use them for is notifications and quick actions in response to them. Interactions between applications will also continue to evolve – Apple introduced the Extensions concept relatively recently, but other platforms have had equivalent functionality for quite some time. Yet these interactions are often still fairly rudimentary and the depth and sophistication of the interactions could grow quite a bit.

Then, of course, there is the whole question of a layer of interactions that take place outside of apps, through things like search and virtual assistants, baked into the operating system itself. All the major platforms now include some form of built-in search which can tap into web and in-app content along with other data sources without launching apps explicitly. And Google is working on making its Google Now assistant context-sensitive with its On Tap features that take account of the app someone is currently using or the content they’re consuming.

The other thing that needs to continue to evolve – which I alluded to briefly above in the context of app streaming – is app business models. I’ve written previously about the challenges associated with in-app purchases in particular, but app stores need to evolve in their support for all kinds of features people are already familiar with when they buy software and services in other ways. Paid upgrades, trials, bulk discounts, and many other features need to be supported if developers are to be able to build sustainable businesses off the back of their apps.

Consumers have to be the drivers

I return to a point I made earlier – Google’s motivations behind app streaming are clearly driven, in large part, by its strategic imperative to feed the web rather than native apps. But that doesn’t mean it’s inherently consumer-unfriendly. But, as app models (and business models) continue to evolve, all the companies involved need to ensure they’re making changes designed first and foremost to benefit their customers. If companies instead feed only their internal needs, they’ll find themselves going down paths consumers won’t follow.

Published by

Jan Dawson

Jan Dawson is Founder and Chief Analyst at Jackdaw Research, a technology research and consulting firm focused on consumer technology. During his sixteen years as a technology analyst, Jan has covered everything from DSL to LTE, and from policy and regulation to smartphones and tablets. As such, he brings a unique perspective to the consumer technology space, pulling together insights on communications and content services, device hardware and software, and online services to provide big-picture market analysis and strategic advice to his clients. Jan has worked with many of the world’s largest operators, device and infrastructure vendors, online service providers and others to shape their strategies and help them understand the market. Prior to founding Jackdaw, Jan worked at Ovum for a number of years, most recently as Chief Telecoms Analyst, responsible for Ovum’s telecoms research agenda globally.

74 thoughts on “Google and the Future of Apps”

  1. Interesting, thank you.
    The funny thing is, my initial thought was the opposite: far from being a move to increase the web’s relevance, this should be a driver for app installs: If I end up streaming an app an handful of times, to me this means I should install it. Same as if I end up on a web site several times, I’ll RSS or bookmark it.

    Are we sure Google generates less revenue in-app than on the web ? If they wanted to keep users on the web, wouldn’t they simply launch some tool to help devs make a web app out of an apk, or fully automate it ? Especially if there’s a a whole lot of adblocking going on in browsers, aren’t apps actually Google’s preferred ad vector ?

    The part about App streaming being connectivity-hungry is a bit ironic: that doesn’t seem to hurt music and video streaming much, and I’ve never heard the issue mentioned in favor of phones with large local storage/SD slots.

    1. If app streaming becomes popular, i think apps that you use more than a few times – will be automatically downloaded/cached , so you’ll get the ideal experience.

  2. “One of the major benefits of many apps is they continue to function fine even without good (or any) connectivity, since much of the content is stored locally.”

    I would strike out “one of” from the statement above.

  3. Is this another spaghetti on the wall tryout for Google? Seems like there is a long trail of “dropped” usages from the big G to warrant caution to this newish path. Like a octopus that has lost a tenticle, it will regrow one. This tenticle will squeeze more data and if it does”t work,,, then the early subscribers will foot the bill.

    1. Is there any bill to foot ?
      What’s the point of keeping product arounf forever if nobody is using it or if it loses money ? Apple didn’t keep either….

        1. I’m not entirely sure wxhat your point is… “The URL still redirects somewhere so the service was never discontinued” ?

          1. You linked to, which had nothing to do with Apple. Just pointing out your mistake.

          2. Well, it’s pretty tough to argue that MobileMe was discontinued in the way that Google kills off many services. MobileMe was an iteration of .Mac, which was an iteration of iTools before it. iCloud is the next iteration. Different name sure, but a similar set of services and features.

            Are you sure you didn’t link to a defunct website to make it seem like Apple really did discontinue MobileMe? Given your history of being less than honest, I’d say it’s a possibility. No matter, your ‘mistake’ has been corrected.

          3. In the future try to be more precise, and please learn how Disqus works. Even a cursory search would have given you the correct information about MobileMe and the various iterations of Apple’s cloud service. Instead of opting for accuracy you made a mistake and also jumped to a wrong conclusion.

          4. In the future, I’ll do exactly as I please and won’t mind a jot of what you say or think, as I always do.
            I’ve already told you several times to mind your own Apple shares and Apple-invested ego somewhere else than in useless boorish (and now paranoid) answers to my posts. That still stands.

          5. Indeed. Alas, Disqus really is missing an ignore function, which forces me to endure … well, you.

          6. and BTW my conclusion is right: Apple has discontinued several sevices and products over the years, some of which they had even publicly and strongly committed to keeping. Which is why I find giving Google flack for discontinuing stuff idiotic and hypocritical. But that’s no surprise.

          7. What a desperate attempt. I think we would all agree that if Google changed the name of Gmail and altered the feature set we would not say Google discontinued Gmail. Even if Google transitioned users to a whole new and better system, that is an iteration of an existing service. To say Google discontinued Gmail, that would mean Google no longer offers email as a service. Google does have a reputation of trying numerous things and shutting down those that don’t work. Which is fine, that’s a model that can work. Nobody but you compared Google to Apple in this regard.

  4. “As such, I think what I call “headless” apps might well be another
    innovation we’ll see soon – apps can be installed but not take up space
    on the home screen.”

    This is a phenomenally bad idea. On the Play Store, it will lead to profound abuse (spyware or adware that offers no evidence that it’s installed or how to get rid of it), as well as people being confused because their device is acting weird and they have no idea why, because they have forgotten that an app that modifies something is installed. A special place that lists all the headless apps that are installed is not a solution — like settings, it’ll be another place most users never go and are barely aware exists.

    I can see maybe automatically placing app icons for headless apps on a “last page” of app icons reserved for them. That way the app is still there, just as discoverable as all other apps, launchable to whatever help or settings screen the developer sees fit to include, and most important, deletable… But it’s out of the way and doesn’t clutter up your other apps.

  5. I think it’s important to understand what this technology is and isn’t.

    My understanding is that this is basically a Desktop Virtualisation solution (VDI) that is integrated into Google’s app indexing system. Hence the application runs completely on the server and the client smartphone acts as a “dumb terminal”. Every single pixel is generated on the server and send over the network to the client smartphone (of course there will be some advanced compression schemes). Just like VDI technology on the desktop, the user experience is likely to be at least slightly worse than running the native app on the client, and when run over anything other than a very fast and low-latency network, it will likely be much worse.

    Unless Google has found a way to make this VDI thing work exceptionally well over low-latency networks, I wouldn’t expect consumers to enjoy this. Nor do I expect developers who have laboured over making their app UI as nice a possible, to be very excited over a scheme that would degrade the experience for users using it for the first time (via streaming).

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