If you work in tech, when was the last time you thought about or even uttered the words “killer app?” It wasn’t that long ago when every consumer-facing ecosystem obsessed over them. Just as the first-person shooter Halo single-handedly drove sales of the Xbox game console, a killer mobile app makes consumers lust for the hardware that supports it. That, in turn, drives both consumer and developer adoption. Case in point: iTunes for Apple and Google’s core suite of first party apps: search, maps, Gmail, YouTube and the Play Store. Without them, do we have wildly successful iOS and Android ecosystems? Probably not.
Now ask yourself: which of Apple’s first party apps – iTunes, Siri, maps, etc. – are so important that you wouldn’t buy an iPhone without it? I don’t think there’s a must-have among them.
All have been surpassed by superior alternatives. iTunes and song ownership has given way to streaming. Spotify, with 30 million paying subscribers has whipped Apple Music (13 million) thus far. Netflix, Hulu and Amazon Prime are winning in video. Siri has taken a backseat to Amazon’s Alexa, with Google working on an even more powerful personal assistant. Apple Maps still can’t match Google Maps or HERE.
Apple’s most powerful competitive advantage is its end-to-end user experience. That means not only software and hardware that many find easier to use, but also that work seamlessly with other Apple devices.
The closest thing Apple now has to a killer app is its App Store. The fact that so many adore the company because its stuff “just works” gives it scale with an audience that is willing to pay premium prices. That includes customers willing to pay for apps. Apple rightly is fortifying the store with a paid search option for publishers to promote their apps, lower fees for developers that publish subscription-based apps, and faster approval times to get their apps to market.
None of these changes, however, will widen the moat for Apple. In fact, Google already has matched Apple’s reduced cut and has offered paid search in its Play Store for some time.
Meanwhile, the next killer app seems likely to come from machine learning, artificial intelligence, virtual reality, and cloud-based services, areas in which Apple is not regarded as a leader. In fact, Apple’s CEO, Tim Cook, has publicly derided Google, Facebook, and others who capture and use the data these breakthroughs require. Competing head-on with them now would require walking back from these criticisms.
As I reflect on Apple’s position, a peerless leader in mobile for the last 10 years that continues to design and curate devices, software and ecosystems that feel much as they did in 2007, I can’t help but wonder if Cook feels the weight of Steve Jobs’ legacy. Is that what keeps him from adapting, or is his outrage at the way data is harvested and used by his competition to build the next generation of innovative services genuine? We may never know.
Apple pioneered the killer app and used it to build the most prosperous mobile ecosystem the world has ever seen. That killer app has lots its bite, though. Absent a new killer app of its own, and in the midst of a soft market for the iPhone generally, Apple hasn’t been this vulnerable in quite some time.