Horace Dediu with an insightful look and statistics on Apple’s disrupting App Store business.
This is the insidious march of a disruptor. It gains a foothold in a context where it has no competition and then relentlessly gets better, eventually displacing the far better suited alternatives. This is what I believe is happening with apps. They are asymmetric in their competition with established media and as a result they are easily ignored and brushed off as irrelevant competition.
Apple’s retail stores, which launched in 2001, did $20-billion in revenue last year. The App Stores generated $10-billion in revenue last year. It’s hardware vs. software. ‘Analog dollars‘ vs. ‘digital pennies.’
The app economy shows that there are big opportunities in “digital pennies” and that the figures are beginning to match even the “analog dollars”. In fact, I suspect eventually digital pennies will dwarf analog dollars. The trouble is that these pennies will not be earned at the same control points. Bits are already big bucks. They’re just not the bits we are used to.