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The 'App Bubble' Creates a New Economy
By: Greg Dorn
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When the iPhone was first released in 2007, the handset came equipped with only one screen that housed access to a few pre-installed apps. These were the only functions available, yet the sexy hardware and game-changing touchscreen were enough to grab our attention. What were these square-like icons that populated this innovative screen? Surely we didn’t call them “apps,” as the now-popular phrase wasn’t even in our vocabulary. Five years later, there is now an entire economy centered on the creation of mobile applications. Much like the dot-com bubble of 1997, we're currently in the midst of an “app bubble.” Although there has been potential for lucrative income, the current app craze could very well follow in the footsteps of its technology cousin. In other words, every bubble was made to burst.
When the App Store made its grand debut of the second-generation iPhone (3G), it came jam-packed with 500 applications. Overnight, the iPhone morphed from a mere touch phone to a tool capable of any task. The software-writing world immediately took notice, and thus an economy was born. Although Steve Jobs was reluctant to even let third-party developers into the inner workings of his latest baby, he eventually relented. The famously stern CEO did not mince words, and cited his decision as an attempt to simply “sell more iPhones.” Jobs once again pulled a rabbit out of his endless hat. More iPhones were sold in the next three months than in the entire previous year. The iPhone as we know it was born, and with it came a brand-new job segment. Thousands of computer engineers salivated at the potential of this new platform.
There are now over 700,000 apps in the App Store alone. Apple has paid out $6.5 billion dollars in royalties to app developers (despite taking a 30% cut of every sale). The company TechNet estimates that this “app economy” has created 466,000 jobs. However, among those hundreds of thousands of apps, very few people have actually made significant income as of late. Working as a freelance dev means no benefits, no 401(k), and no security. The smartphone generation may have created paid work, but there is a significant grey area to the profession.
Nevertheless, work is work. In fact, even in the middle of the worst recession since the Great Depression, the number of computer software engineers has increased 8% from 2010 to over a million; that outnumbers the amount of farmers in this country. Nevertheless, competition has reached a fever pitch, and it has become increasingly difficult to create a successful mobile application. For every Instagram out there, thousands of failures never see a dime, or at least not enough to make ends meet. So while the integration of the word “app” has became ingrained into our everyday lives, it appears another bubble is primed to burst.

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About the Author
Greg Dorn is a blogger, writer, and obsessed with everything technology and social media. Greg is absolutely captivated with the recent advancements in mobile gadgets, making our world more seamlessly connected. You can learn more about him on his own blog here
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