Why Apps Are Stealing the Show From the iPhone on Its 15th Birthday

iphone photo

By Ryan Goldman, Vice President of Marketing at Moloco

There is no doubt about it; 15 years ago, on 29th June 2007, Steve Jobs changed the world forever. A breakthrough handheld communication-plus-computing device – the first iPhone – made its debut on the market. Its 3.5” multi-touch display, microphone, camera and battery performance reinvented the cell phone and paved the way for the modern smartphones that we take for granted today.

Beyond the hardware, the launch of the first iPhone was also a key milestone for the introduction of native mobile applications to the world. At the time, the Wall Street Journal touted the iPhone as “a beautiful and breakthrough handheld computer.” Fast forward to today: it’s less about the computer and phone hardware itself and more about the apps and library of digital content powered by them.

At this point, the iPhone is largely seen as a vehicle for apps. It’s a portal into our many online lives and an enabler of the blend between our mobile and at-rest behaviours.

In the 2010s, the ‘app economy’ was established alongside the arrival of tablets and smartphones. It is today estimated to be worth $6.3 trillion. Initially, however, mobile businesses struggled to generate sustainable growth and monetisation. Why? They offered unique services and therefore generated unique data — data that traditional tools were incapable of helping to make use of.

Over the past decade, data and the ways we use it have become smarter. Apps have matured into an economic sector in their own right, with clearly defined business models for developers, content creators, publishers, retailers, entertainment and streaming services and much more.

The Beginning: Evolution of apps

To understand how mobile apps have evolved into what we have today, we need to go back to the beginning, when e-mail, telephony and SMS were the main sources of interaction on the mobile device. After this came the combination of experience and location — a landmark moment, which saw the emergence of commerce apps such as Yelp and Groupon and dating apps like Tinder and Grindr. This fusion advanced the idea that processing power, signal coverage and user data were going to change how we perceive our mobile phones for good.

Cue the emergence of social and search data: the ability to tailor experiences not only to where you were but to the data you share on social media apps such as Facebook and search apps like Google.

By 2012, most of the internet was being developed specifically for the iPhone. Soon, the app economy was conceived and you could find a mobile application for just about everything, whether you were a mobile gamer, online shopper, social media user, finance customer or TV watcher. Every developer’s ultimate goal was to grow their user bases and drive revenue.

Increasingly, the roles of other parts of the device made a difference. Photography emerged with Instagram, tied to location and user insights. User-generated content (UGC) evolved towards video with YouTube’s popularity, taking advantage of a wide variety of data signals, from audio track and video analytics to audience engagement. And apps like Clubhouse showed that decades-old concepts like partyline phone calls and talk shows could fit into the mobile UGC framework and leverage user data in new ways.

The Present: The State of the App Economy

The current state has developed into a user-centric app economy fueled by content. In essence, it is moving towards increased customisation to the user, based on their first-party data. Take TikTok as an example, which takes advantage of a breadth of consumption and behavioural data from users to personalise a stream of content, branded as its For You Page or #FYP. TikTok’s algorithm is what makes it effective. Rather than being driven by search or ‘shopping’ for content, it effectively curates a small but never-ending library of content specialised to each particular user’s tastes and preferences.

Content and, by extension, mobile apps, are moving this way generally — towards further curation. Not only is traditionally ‘professional’ content expensive but it is also made to cast a wide net and reach a big audience. Apps like TikTok offer a greater volume and variety of content combined in infinite ways to reach specific users.

Looking at the trajectory of the app economy, a key challenge is where you get that specificity from. To achieve this, mobile developers view machine learning as an essential part of their tech stack to effectively advertise and monetise apps. Additionally, machine learning has become an important resource for both respecting user privacy and maintaining regulatory compliance, even in the context of advertising and monetisation.

The Future: Contextual Relevance and a Curated Economy

Fundamentally, improvements in specificity will be the next big shift in content and app development. This is largely tied to privacy. However, it would be a misinterpretation to conclude this is a moment where app developers are correcting their mistakes. Like all technology, apps are in a constant state of evolution, with developers looking to refine, improve and increase specificity and protect user privacy, not trade off one for the other.

Machine learning engines are now critical, as companies look to turn their own, unique first-party data — the data they are directly given, with consent, by their own users, which is not accessible by third parties — into not only personalised in-app experiences, but also more customised and context-relevant marketing campaigns and monetisation strategies. Using first-party data, companies can build more precise business intelligence models that uncover new audience segments, market trends or app opportunities.

Modern machine learning has a hard but meaningful job in this context. Unlike older systems that relied on generic and inaccurate hand-picked segments with no basis in data science or that relied heavily on third-party data that could be dubiously acquired or used without permission, applying the same fundamental insights from content curation and experience personalisation emphasising first-party data and contextual relevance is clearly the right pathway to achieving greater specificity in marketing, as well.

These shifts are, ultimately, driving greater curation and efficiency — in which apps create a semi-customized experience for users, specific to their behaviours and expectations. As such, the future of the iPhone will depend on the evolution of apps, rather than vice versa. Steve Jobs, in 2007, created a piece of hardware that was extremely difficult for developers, brands and markets to monetise; today, the apps that the iPhone powers are the heartbeat of many marketing strategies.