Has Apple Just Killed Off a Bunch of Startups?

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KEY TAKEAWAYS

  • Apple's new AI features may encroach on territory occupied by startups offering similar standalone apps, squeezing them out.
  • Apple’s partnership with OpenAI will boost Apple’s AI tool development.
  • New Apple developer tools lower barriers to entry and could disadvantage existing app development companies.
  • Existing developers and startups may need to leverage Apple's foundation to build innovative, niche apps instead of recreating basic functionalities.

Apple has kicked off its next era. During June’s WWDC 2024, the tech giant unearthed a host of new AI features and apps that will change how users interact with iPhones, iPads and Macs.

While some of the announcements brought excitement to the tech community, the reflection after the event is that some of the updates might encroach on the territory occupied by smaller startups.

These startups often specialize in features that Apple is now incorporating into its core operating systems as the giant looks to find its next trillion dollars in value, which may lead to a situation where Apple’s solutions become the default choice, squeezing out niche players who lack the resources to compete with a tech behemoth.

This begs a crucial question: will Apple’s announcements be the death knell for startups, or will they cultivate a more fertile ground for creative app development?

Where it Could Go Wrong for Startups

The new updates and apps coming to iOS 18, iPad OS and macOS show that Apple will be integrating more functionality into its core offerings. This means that startups that have built their businesses around single-purpose apps may face an uphill battle.

Before the announcements at WWDC 2024, Apple never had a standalone native password manager app on its App Store. But with the introduction of a native tool in the upcoming iOS 18, we may likely see this move being a disruptor to business models of established password management services like 1Password, NordPass and LastPass.

These password services, which have carved out a market by offering robust password management solutions, may find their user base eroding as Apple’s offering gains traction. While these established players may still retain a loyal following among power users and enterprises, convincing casual users to pay for a dedicated service could become increasingly challenging.

Commenting on Apple’s latest updates, Aperture founder Hannah Parvaz voices concerns. She told Techopedia:

“Apple has a tendency to identify opportunities and then build them into their ecosystem. The barriers to entry for small businesses are getting higher and higher, and it means that we need to be continuously carving out new niches as well as developing our brand story and relationships with our customers.”

Similarly, since the launch of the first iPads in 2010, Apple has never included a Calculator app for the device — until now. The native Calculator app for iPad, augmented with a Math Note feature that allows users to write calculations directly on the screen, will likely lead users to dump paid-for calculators for iPad OS.

There is also the AI writing assistant powered by Apple Intelligence and integration with OpenAI’s ChatGPT. This may lower the demand for similar standalone apps like Grammarly and editGPT.

Hannah thinks Apple’s partnership with OpenAI will enable the iPhone maker to design more powerful AI tools for writing, image editing and health.

“We’re about to be hit with comprehensive AI features now that they’ve partnered with OpenAI for Apple Intelligence, and to build on top of that, we’re seeing brand new AI-assisted tools in the writing and image editing space, as well as around health metrics.”

The convenience of having these features built into the operating system could sway users away from third-party apps, stifling the revenue streams of these startups.

Opportunities for Developers Amid the Challenge

While Apple’s WWDC announcements may have thrown a curveball at developers, there could be a wealth of opportunities amidst the uncertainty.

Apple’s move towards a more comprehensive OS could streamline development processes. Developers may no longer need to reinvent the wheel by building basic functionalities like photo editing or note-taking tools.

Instead, they can leverage the foundation provided by Apple and focus their efforts on creating truly unique and innovative experiences within their apps. This frees them to explore uncharted territories, push deeper into niche markets, or develop hyper-specialized features that cater to specific user needs.

The key for developers will likely depend on adaptability. Developers may need to assess their current offerings and identify areas where they can add value beyond what Apple provides. This could involve focusing on superior user interfaces, and in-depth customization options. Taking this approach could help developers differentiate their products and carve out a path in the evolving app ecosystem.

The Rise of the ‘Micro-App’

Apple’s advancements might also create space for a new micro-app category where developers shift their focus to developing lightweight, hyper-focused apps that leverage Apple’s core functionalities but offer unique features or cater to specific user segments. Startups with laser-focused ideas could find success in this space, filling the gaps left by Apple’s more generalized offerings. This could lead to a flourishing long tail of sub-niche apps that cater to specific user needs and interests.

Opportunity for More App Extensions and Integrations

The new landscape also presents opportunities for developers specializing in creating extensions and companion apps. Developers can pounce on this opportunity to create apps that enhance Apple’s built-in features.

For instance, the iOS 18 may be good enough for basic editing for writing tasks or health data analytics. This could pave the way for apps that can offer advanced editing or deeper analytics for health data.

Startups focusing on these areas could become essential partners for developers building more complex applications within the Apple ecosystem. All that might be needed is to provide the missing pieces that elevate the user experience.

Apple’s Xcode 16 and Swift Assist May Democratize App Development Landscape

Apple’s developer tools updates at WWDC 2024 point to a future of many possibilities in the app development space.

For instance, the new Xcode 16 and Swift Assist tools aim to democratize app development, but Professor Ernan Haruvy, Professor at McGill University, fears there are unintended consequences.

Haruvy in a comment made available to Techopedia warns that “by reducing skill and knowledge-based entry barriers, Apple is therefore disadvantaging app developer companies that have made their income from apps.

“These developer companies will now have to contend with newcomers that, thanks to Apple, are unhindered by their relative inexperience in app creation.”

The Bottom Line

Apple’s WWDC announcements both give and take away for startups. While core functionalities of certain apps might become redundant, it does pave the way for innovation in micro-apps and extensions.

Developers can use Apple’s foundation to build upon existing features and create specialized apps that enhance native functionalities, similar to how third-party developers create custom GPTs using OpenAI.

But many small start-ups will now be deciding whether they have a future with Apple, or whether a pivot is vital to stay alive.

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