Bots, the next frontier

The market for apps is maturing. Now one for text-based services, or chatbots, looks poised to take off.

“YOU are a developer and you’ve just spent two weeks writing this amazing app. What is your dream? Your dream is to get it in front of every iPhone user.” That was how Steve Jobs, then Apple’s boss, introduced an online shop for smartphone apps eight years ago. At first few paid it much heed, but it launched one of the fastest-growing software markets ever. Since then over 100 billion apps have been downloaded, generating $40 billion in revenues for developers and billions more in subscriptions and other fees.

At a conference on April 12th in San Francisco, Mark Zuckerberg, Facebook’s boss, is expected to make a similar announcement. He will probably unveil an online shop and coding tools for “chatbots”. These are text-based services which let users complete tasks such as checking news, organising meetings, ordering food or booking a flight by sending short messages. Bots are usually powered by artificial intelligence (hence the name, as in “robot”), but may also rely on humans. Many in the technology industry hope that Facebook’s event will mark the beginning of another fast-growing, multi-billion-dollar software economy. Are bots the new apps?

The timing looks right, because smartphone software is in flux. Download numbers are still growing, but the app economy is clearly maturing. “The dream of the independent developer building a business in the app store is over,” suggests Activate, a consultancy. The 20 most successful developers grab nearly half of all revenues on Apple’s app store. Building apps and promoting them is getting more costly. Meanwhile, users’ enthusiasm is waning, as they find downloading apps and navigating between them a hassle. A quarter of all downloaded apps are abandoned after a single use.

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