Apple’s iOS 7 rollout to shake up its $10bn app economy

Apple’s App Store, which celebrates its fifth birthday next week, has become an economy all of its own.

More than $10bn has been paid to developers of its 850,000 apps over the past five years. The platform has created multimillion-dollar businesses such as Rovio, maker of Angry Birds, Instagram, the photo-sharing app, and Shazam, the music recognition service.

For Apple, the popularity of the App Store with customers and developers is a key asset in a smartphone and tablet market where competition will only get more intense. So the stakes were high last month when the company unveiled the latest version of its software platform for the iPhone and iPad, iOS 7.  

As hardware becomes less of a differentiator against its rivals, Apple's radical remake of iOS will determine whether Apple retains its role as the tastemaker of the technology world – and a design icon for industries far beyond Silicon Valley.

Chief executive Tim Cook has called iOS 7 the “biggest change to iOS since the introduction of the iPhone”. Gone are the shiny, bubble-like icons and faux leather and paper; in comes a bright new pastel-and-neon palette, ultra-thin typeface, flat icons and layers that make apps seem to hover in mid-air.

Real-world references in software were useful in the past, says Tim Brown, chief executive of design firm Ideo, but, as people become more accustomed to using technology, “we are well past the need for that any more”.

Many developers said they were left in a state of shock when iOS 7 was first unveiled in June, ahead of a release to the public in the autumn.

The break with the past came with last year’s departure of Scott Forstall, Apple’s head of iOS, when Sir Jonathan Ive, its head of design, took over responsibilities for the software’s look and feel.

The iOS redesign is therefore the first big test of whether Apple can sustain the taste and vision previously provided by its late co-founder, Steve Jobs. Stung by criticism that it has run out of innovative ideas, Mr Cook and Sir Jonathan will, through customers’ and app makers’  reactions to iOS 7, find out if they can together keep Jobs’ revolutionary spirit alive at Apple.

After almost a month of testing iOS 7, designers and developers outside Apple are polarised in their reactions to the redesign. Many are scrambling to reconfigure their apps to fit the new aesthetic. While some designers praise a bold – if belated – step forward, others have lambasted Apple for copying Microsoft’s Windows Phone and Google’s Android mobile operating systems.

Ryan Freitas, an interaction designer and start-up investor, said Sir Jonathan had the choice to stick with the old design standards, or invent something new. He was “frankly delighted” that Apple had chosen a redesign even though it risked alienating some of its audience.

Designers on the rise in Silicon Valley

Inspired by Apple and emboldened by investors who want their disruptive technology to be smart and simple to use, designers are on the ascendant in Silicon Valley.

Many of the brightest hopes in the west coast tech industry are led by the design savvy, from Airbnb – its two co-founders met at the Rhode Island School of Design – to Square, where chief executive Jack Dorsey takes a perfectionist approach to product and user experience that some have compared to that of Steve Jobs, the late Apple co-founder.

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Some designers would have preferred Sir Jonathan to go even further.

“In the arc of the Apple story, it fits into the required and long-awaited spring clean-up,” says Yves Behar, founder of fuseproject, a San Francisco design agency. “It isn’t the renovation or transformation that we are expecting yet.”

Nonetheless, iOS 7 is sufficiently different that even adherents to Apple’s old design language are changing.

Apps that embrace its new visuals “will have an edge over apps that don’t,” Jeremy Olson, the founder of Tapity, writes on his blog. He has won awards from Apple for apps that mimicked real-world wood and paper. “This is the single biggest opportunity iOS developers have had since the App Store launched. Every category is up for grabs once again.”

Banjo, a social-networking app, hopes to grab that opportunity. Damien Patton, Banjo’s founder and chief executive, delayed the launch of a new version of the app to have it coincide with iOS 7. “It forced us to take a whole new look at our product,” he says.

Those parts of iOS 7 that have been criticised by designers, such as garish app icons, can be tweaked before its final release. Apple will also train its customers in new kinds of touchscreen gestures and navigation styles by embedding them in its own software, which will give app designers more freedom to experiment.

“People were starting to feel limited by Apple’s old design and function,” says Suhail Doshi, founder of Mixpanel, an analytics service for app developers. “With iOS 7, developers now have the opportunity to keep pushing the fold on design.”

As the visual gap between iOS, Windows and Android narrows, Apple's huge head start in creating a vibrant app economy is also starting to shorten. iOS 7 is a bold gamble that the next five years can be as lucrative for Apple and its app economy as the past five.