What is the future of mobile apps? Well, extinction.

I am no longer excited looking at apps. In fact it seems that the trend ended a while back – when acquiring the first 1000 – 2000 users were easy, but post that it costs app startups anywhere between 250K to a million USD, just to make a play in the app based services space (think uber, droptaxi etc).

Several incubators that have focused on app based ideas, which started off with a 50K per idea fund, soon realized that they cant garner any traction – to get their successive rounds and raised it to 200 – 250K USD. There aren’t that many app-focused incubators anymore. And the ones that do are indistinguishable from any other accelerator – the low level entry opportunity has passed.

Blowing up money in the name of landgrab, doesn’t seem like a smart idea when the “land” that you are grabbing isn’t all that real. Let me explain.

There are several apps that are simply aggregators. They acquire users, and are hoping to keep them on their platform for loyalty and somehow over a period of time break-even on the LTV of the user. Well, lets hope it happens soon, because the game is going to change very fast.

My hunch is that mobile apps are going to disappear – not entirely, but predominantly. Especially transaction based apps – be it to book cabs, or order food, or book movie tickets, or do dry cleaning – won’t make sense. Instead most of them will turn into APIs. You can see signs of this happening in some of the popular movie ticket apps in India – Satyam Cinemas for example has an option where you can book a movie ticket and also book a cab (uber) to pick you up and take you there. If the APIs already exist, then it’s only a matter of time.

This is what the future will look like. You fire up your variant of Siri / Ok Google / Cortana and say “I’d like to order food”, and mention what you want, and it is simply going to place an order to a nearest restaurant. I doubt that any of these services would want to do the last mile integration themselves (google as a company has failed wherever it has required that they work with actual people on the ground) – so they will partner with you, as an App provider (now API Provider) to take it from where they leave off, but they will in all probability charge you for every lead that they pass on to you – just like google adwords or Justdial for that matter.

Which essentially means, anyone who is simply a pretty app and amassing millions of users are pointless. They won’t have any moat anymore – unless your userbase is bigger than the userbase of android / iOS and cough Windows Phone put together. You will no longer be in business if you don’t have operational efficiency and are able to do all the back-end work, pay the “lead fees” and still maintain a profit.

This is the reason why it doesn’t matter which “app” owns the user, it wont matter at all. Fundamentally the operating system on whose platform everyone has built their base on, owns them all. (There are some exceptions to this, where the OS platform itself is still fragmented like in the case of China)

What are the signs of this happening? There is a reason why Google won’t sign the net neutrality bill – in the way it is meant to be. Equal access to all services and content goes against the big play that’s coming up.

Facebook will be the gateway for content, and Google will be the gateway for transactions in the future. Content is useful and helping users find that is interesting. But if you can enable a transaction, well, you’ve hit a goldmine.

And that’s what google is lining up towards. Android will have the option to choose a service (based on who pays a premium for that user and service), depending on the location and give preference. It won’t be neutral. It will be Just dial on steroids.

They’ll promise access to customers, and seamless cash transfer – through Wallet / Apple Pay etc. But no matter who you are, you will end up becoming a service provider.