The internet really hit its stride in the early 2000s. Google had found a way to serve up relevant content among the exponentially growing number of websites. More importantly, a few years later Google figured out how to monetize its huge traffic with sponsored ads and bidding for placement. For years the knock on the internet and internet companies was that they were not profitable. From 2001 to 2006, Google’s revenue climbed from $70 million to $10.5 billion. Google was not alone; Amazon’s revenues were growing quickly as well. Originally Amazon had focused mainly on selling books, but as it expanded into electronics and household items naysayers claimed it had overreached. It turned out Amazon recognized a need and its revenue grew accordingly.
The dot-com bubble collapse of 2000-2002 made traditional companies wary of the internet and did not change their minds until the mid-2000s. Soon brick and mortar stores were rushing to create websites, as were device makers and service providers. The dot-com land grab was on and remarkably, some people actually became rich by anticipating the website boom and hoarding domain names. So coveted were these domains that people paid millions of dollars for Beer.com ($7 million), Diamond.com ($7.5 million), Casino.com ($5.5 million) and Hotels.com ($11 million). Google and Amazon demonstrated that you could make a lot of money on the internet, and the internet was websites.
Then something significant happened at the end of the decade. As companies continued their migration online and created more interactive websites, Apple changed the game by introducing the iPhone. Up until then, most people accessed the internet through a desktop or laptop computer. Phones were for talking and, more recently, for texting. Apple introduced a phone that interacted with the internet directly.
The world marveled at the beauty of the iPhone, which quickly became the most popular cell phone model. In the late '90s and early 2000s, Nokia had dominated the mobile phone market. In 2007, the year the iPhone was launched, the Nokia 2600 Classic was the most popular cell phone. By 2008 the iPhone 3G was the most popular with 25 million sold, compared to the Nokia 2330's 15 million. After 2009 Nokia would never be the top-selling mobile phone again. Samsung and iPhone would trade that crown for the next decade.
So what was it that changed the mobile phone market so definitively? Often you will hear it was the increased functionality of accessing the web from your phone and the beautiful design aesthetics. However, the iPhone wasn’t the first phone to offer internet access, nor was it the first elegant phone. Another innovation was at play: the app. Apple did not invent the mobile app, but it did popularize it. Apple’s App Store for iOS opened July 10, 2008, and by the end of the year, it had roughly 100 million downloads. By the end of 2010, the total number of App downloads had grown to 10 billion.
Mobile apps offered a new way to interact with the internet. Websites are accessed through browsers. Although they can be interactive, the user had to take the initiative, typing in the web address. Mobile apps are downloaded to a phone and are proactive, downloading information to the phone while it is not in active use. The mobile app created a new paradigm for interacting with the internet. Now users did not have to navigate to a website, log in, navigate to the part of the website that was relevant to them, request information, and so forth. They could simply download an app, set a password and set preferences so the information they needed was ready for them ahead of time.
This new approach to interacting with the internet, combined with the ease of mobile access, has totally transformed internet companies' approach to users. Whereas it was previously all about the web page, increasingly it is all about the app. As of June of this year, the Apple App Store has had 180 billion cumulative downloads, and Google Play has had 82 billion downloads. Companies are realizing they have a huge competitive advantage if their apps are on users' phones, tablets or laptops. Push notifications can proactively solicit activity from users while default settings reduce the frustration of logging into and navigating a website.
Mobile apps can also use sensors and information from a mobile device to make the experience more interactive, catering to the user experience — something much more difficult to achieve with websites. Apps now utilize users as a sort of network that helps improve all users' overall experience. For example, Waze can help you avoid traffic jams and slowdowns or Uber can link you to the nearest driver. In general, mobile apps immerse users and make the internet more interactive and proactive. This should only increase as more and more internet-enabled devices come online as promised by the internet of things (IoT). The mobile app, seemingly a small innovation a decade ago, has transformed how we interact not just with the internet, but the world.