Necessary Conditions for an App Store Monopoly

Mar 25, 2023

Why did the Mac App Store never catch on? Why has the iOS App Store monopoly sustained for almost two decades? Why isn't there a "super app" in the US?

Necessary (but not sufficient conditions) for an App Store monopoly.

Exclusivity of distribution. The Apple iOS App Store wasn't the first app store on the iPhone. Cydia was a third-party app store on iOS for jailbroken iPhones, launched in February 2008 (Apple released its official app store in July 2008). Technically, another third-party installer, "Installer.app," was launched in 2007.

But jailbreaking became a thing of the past for many reasons. Legal action, developer incentives, software updates, security, and effectively cut off any growth of alternative app stores.

The Mac App Store never took off. Why? Apple also controls the underlying hardware. But it would be (practically) infeasible for Apple to cut off access to third-party applications on the desktop. Users can download programs from anywhere. So why go through the Mac App Store?

App exclusivity – VisiCalc launched on the Apple II in 1979 and wasn't available on other computers for a year. That made it a "killer app" for Apple – people bought the computer to use it.

Today, the question can be posed – how easy is it to build cross-platform applications? For mobile apps, even with React Native, companies still often maintain two separate codebases for Android and iOS applications. Native platforms can offer real benefits – hooking into the notification system, windowing, or system-level APIs can make or break the user experience.

If other platforms can easily port your application, it might not give it the "killer app" effect.

**Network effects and proprietary distribution –**Excel was initially launched on Mac, not Windows (MS-DOS). If you have proprietary distribution, applications might choose your platform over their own.

Network effects are tough to compete with. For example, App Stores have the noticeable network effect that more applications mean happier users, but also more subtle ones such as developer network effects (more applications out there means better tooling, more documentation, more examples, and more tutorials).

Underlying platforms like Facebook's social graph might have stronger network effects. For example, Zynga struggled to exist as a standalone platform after Facebook limited its access.

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