Right after a giant real estate bubble everyone thinks they know what bubbles are and can spot them. A bubble is defined by the existence of debt fueled poor investments in the more capital intensive higher orders of production. The consumer good industries suffer side effects of bubbles and their eventual busts but I can't think of a bubble that was created in the consumer good industry. It's just not capital intensive enough for that.<p>I don't see why people trying to start companies based on developing higher quality apps could ever be a bubble. If those companies don't end up serving consumers they'll go out of business which is not abnormal at all. It's part of life.
I find it interesting that he compares the value of phone apps to the value of the mobile web. There are thousands more apps than the user can process, and the majority of apps that the user downloads will be abandoned/forgotten within a few hours/days.<p>It sounds a lot like the internet in general, to the extent that App stores could be considered a transient analogue to a gated internet. Thousands of apps/sites all struggling to attract the attention of users.
I generally agree with his arguments. But, perhaps naive, I believe games can be immune to a lot of this. Gamers always have room for one more game if it's good. There is a sizable chunk of iOS users who pretty much use it as a game platform (toucharcade.com's forums are a good testament to that).<p>But at the same time, I've come across many excellent, well developed, beautiful games in the app store that 3 people have downloaded. So games for sure are not a magic bullet.
So this man thinks that because he only uses 5 apps other people will only use 5 apps.<p>This reminds me to the web "bubble". The same way not every web page about cars or cats made millions to their creators, not every fart app is going to make you millionaire.<p>You can use the same arguments for web too:
1)web don't generate profit for their developers(using his per capita metrics).
2)web is not profitable for MS, Apple, IBM...
...
But the web is very good thing with or without profit. It gives you just the profit opportunity. Is not going to give you money just by standing up waiting for the money to come.<p>This is only the start of a new paradigm: Using touch with your computer, and like the first "visual" apps, they look like toys compared to the serious precedent(were is Lotus 1-2-3?). Easy to look down on, some people could loose the train if they don't jump.
Pick any of his arguments and you can flatten it in seconds.<p>I've seen the nonsense 'avg cost to develop app' metric before, put it in context, there are a huge number of apps that use the same code with different data.<p>Also claiming that apple doesn't value the actual apps is ludicrous given their app specific advertising campaigns of 'There's an app for that'.
The bubble has already burst, as evidenced by the lack of value-generating apps (run once and never touched again) and the bottom falling out on prices. Apps are either free or 99 cents, with the exception a few proprietary platforms (or protocols) that won't easily allow competition (Slingbox, etc).
The only apps I have purchased for a real amounts of money are from Rock or Cydia. Most of them were $10+ and to be honest I use them everyday. Apps such MyWi 4.0, My3g, IntelliScreen, Wifi Sync, and many others get daily use from me and and I am more than happy with what I paid. Granted, AT&T and Apple aren't likely huge fans of these types of Apps, but I think that is a huge mistake on their part. Android too is hamstrung by Verizon with what they are allowed to give developers access to on their phones. If these restrictions weren't in place I really believe that there would be so many more unique and USEFUL Apps than there are now. The really useful (jailbroken) Apps go beyond porting websites to cocoa.
The subject has already much discussed on HN. I don't see how making the association with the bubble sheds new light to the App phenomena. I doubt the comparison even applies, or if it applies you could put the label "bubble" to anything trendy (and many that is what is going on... the bubble of using the word "bubble"). Apps can only be traded one way, you can't sell them back to someone else.<p>At least the target market for the iPhone apps is growing and a stepping stone to the iPad or any other device to come that will adopt IOS.<p>The author doesn't use many apps on your phone. I can bet he is not using many apps on his PC either. There are tons of things people buy or offer that remain never used.
There is one app which is worth of hundred euros to me: a local public transportation app (ReittiGPS in Finland). 3 euros for an app which I use almost daily and which has saved me hours is pretty low.<p>On other hand I have dozens of little apps which I use very seldomly. But I guess I will be wasting money for those apps, since one or two of them has been pretty useful to me (and games of course).<p>And I still use much more money for beer than apps :)
Another example of lying with statistics. The author takes the number of apps / revenue to paint an unrealistic average. What's really going on is a few apps are making millions, and the rest almost nothing.<p>Per
"What's needed are apps tied to real business models that have real ROI. And,companies should build apps with their eyes open about what they should realistically expect to accomplish with what they develop. Having an app for an app's sake is not enough."<p>That pretty much summarizes the entire story
In the terms of the classic trinity - Innovators, Imitators, Idiots, the term bubble could be defined as a rush of third ones. Blogs, SEO, and community-created-content sites already in that stage.