The "perfect storm" that led to the explosion of apps

A member of my staff – Sanjay Udani – attended a White House event celebrating science fair projects created by kids from around the country. He pointed out that one of the projects at the event was a mobile app developed by three young students that works in conjunction with a Bluetooth-enabled heart rate monitor to notify family and/or medical professionals in the event of a medical emergency. Version 1 of the product is already available on the web for purchase. 

Can you imagine a science fair with a project built around a mobile app even just a few short years ago? It never would have happened because while applications of various kinds did exist then – when the President was just being inaugurated – they were not as widely used as today and they did not work like they do now. The entire apps market – which a recent study estimated has created 450,000 or so jobs – did not really exist until just a few years ago. Today, as the study notes, “Nothing illustrates the job-creating power of innovation better than the App Economy. The incredibly rapid rise of smartphones, tablets, and social media, and the applications—‘apps’—that run on them, is perhaps the biggest economic and technological phenomenon today.”

With the rapid advance in information technology, it can often seem that new developments or innovations come out of nowhere. But of course that is not true. Usually, years of development and preparation have gone into major innovations.  By the time consumers are able to take advantage of a new advance like apps, a lot of work has been done to create the conditions for growth and innovation.

What helped lay the groundwork for the dramatic explosion of the apps economy? I think five things were significant contributors to the evolution and growth of the apps market: (1) the widespread deployment of high speed mobile data networks; (2) the widespread adoption of mobile data services which created viable markets for Internet based services; (3) the “always on” connections which mobile high speed networks enable – an app is “touch and run” and that was not possible with the slower networks of the past; (4) the rapid adoption of the “mobile computers” we today call smartphones; and (5) advanced device interfaces particularly touch screens that have transformed phones into real time interactive devices.  I want to concentrate on the first point because I think it is too often ignored.

Data services for mobile networks were launched in the mid- 1990’s in the U. S.  They could only operate at speeds in the range of a few hundred kilobits down and even less upstream.   Text messaging was used on these networks over time but the web itself did not become popular until the latter half of the 1990’s so 2G networks did not have a lot of data capability.  The devices used on these networks were phones, not computers, and they were largely built around voice.

Carriers began deploying 3G networks in 2002, eventually allowing and speeds of up to 2 megabits down and hundreds of kilobits up.  The web became more popular on mobile phones but video was not really a big driver and even web services were not well adapted to mobile use.

Amazingly, Verizon began deploying its 4G networks only a few years later in 2010.   In less than 20 years, we’ve gone through three generations of mobile networks to today’s 4G which conservatively can handle 12 megabits downstream and up to 5 megabits up although higher speeds are commonly being delivered.  Today’s modern apps market was pioneered in part by Apple which did not launch its apps store until the summer of 2008 when the iPhone 3G was just coming on the market. 

While the rise of the apps market seems to have happened in the blink of an eye, the work needed to conceive, plan for and build the networks that provided the right platform for apps was extensive and substantial resources were required to build these networks.  For example, an important part of the work required to build networks is to develop the standards for operating them.  In the case of LTE, it took four years to finalize the standards and Verizon was involved with a wide number of companies in helping make LTE a global standard.

Sufficient spectrum is also key to deploying new mobile networks.  By the mid 2000s, it was clear that mobile carriers would need new spectrum in order to offer new data (4G) services , while continuing to offer  2G and 3G services that millions of consumers continue to want.   Verizon announced its plans to build a 4G-LTE network in 2007 and spent billions of dollars purchasing spectrum to make this 4G deployment possible.  Today, Verizon is a world leader in 4G deployment and will make the technology available to most of the population of the United States by the end of 2013.

As I noted, a number of technology advances have come together to make the apps market possible.  Companies in all facets of the Internet ecosystem – from hardware makers to software makers to network companies – have laid the groundwork that made the popularity of apps possible.  But the networks that underlie all of this have advanced rapidly and continuously with strong leadership and vision.  Some would say a “perfect storm” created the apps market.    It’s more accurate to say the commitment, investment and hard work that led to the deployment of 4G networks was a key part of making it possible.