Source: Quantum
As we all know, Apple invented the smartphone - its core value is the App Store. The App Store economic model has been around for almost 17 years, which is about the same as Nokia's dominance of the feature phone market.
Nokia ranked first in global mobile phone sales for 12 consecutive years before it was quickly overturned and fell by the smartphone wave led by Apple. So will Apple face such a situation? Looking at Apple's hesitation in the field of artificial intelligence, it is likely that it has already been.
VentureBeat declared in a cover article today, "The Great Software Reorganization: AI Not Only Devours Everything, It Is Everything," that "the traditional software market will become history" and "the App Store economy will collapse." Please continue reading.
Once upon a time, software devoured the world. Now, artificial intelligence is here to digest what's left.The old computing model, where applications rule the world, markets control access rights, and platforms take a share, is disintegrating. An AI-first world is emerging, where software functionality is no longer confined to apps, but exists as dynamic, on-demand services accessible through AI-native interfaces.
For decades, the computer has been a glorified filing cabinet. Apps were digital folders, self-contained, rigid, and isolated from one another. Want to check the weather? Open an app. Need to book a flight? Another app. Pay a bill? Yet another. The result? A fragmented user experience where we switch between countless silos, each vying for space on our home screens.
Generative AI breaks the mold.Instead of clicking and tapping through individual programs, users can interact with intelligent agents that dynamically retrieve, process, and generate responses in real time, without the need for an app. Let an AI assistant manage travel, optimize finances, and recommend a workout? Done. Need to review a legal document while ordering groceries and summarizing the day’s news? Seamless. The new interface isn’t an app. It’s conversational, predictive, and frictionless.
It’s fair to say that this new world of functional intelligence isn’t quite ready yet. Apps aren’t going to disappear overnight, but their hold on computing is likely waning. AI doesn’t care about pre-packaged software silos. It rewires experiences, making software modular, dynamic, and deeply integrated. Opening and switching between apps? That’s going to feel like traditional thinking very soon.
The risks now: Traditional marketplaces face a severe test
For years, digital storefronts and closed marketplaces were an unassailable moat. Control distribution, tax every transaction, and make billions. It was wonderful. But what happens when apps become… unnecessary?
The rise of AI-driven interactions threatens the entire app distribution economy. If users rely on AI-native systems, rather than installing standalone software, traditional software marketplaces will become a thing of the past.
AI replaces the middleman. The economic model will shift from app monetization to an AI-driven service layer where interactions are seamless, personalized, and most importantly, outside the control of traditional platforms.
Two inevitable consequences:
Revenue disruption: No more 30% cuts on app sales or in-app purchases. App store economics will collapse if AI processes transactions autonomously.
Platform disintermediation: AI is cloud-native and hardware-agnostic. Control over digital ecosystems will wane as software becomes an ambient service rather than a closed experience.
The new question is who owns the AI-driven service layer? Because, whoever owns it will own the next trillion-dollar industry.
New power structures: AI models and vertical AI solutions
AI eats apps, creating a clear power vacuum. Where does value shift? Simple, control:
AI models: The entity that develops the most advanced foundational models defines the core intelligence layer.
User Interface & Personalization: Whoever builds the most intuitive AI-native interface will dominate engagement.
Data & Integration: AI thrives on real-time proprietary data. Whoever owns the data pipeline controls insights, intelligence, and ultimately the economy.
But there’s another force at play: Vertical AI Solutions.
Right now, most large language models feel like a Swiss Army Knife with unlimited tools—exciting, but overwhelming. Users don’t want to “figure out” AI. They want solutions, AI agents tailored to specific industries and workflows. Think: legal AI drafting contracts, financial AI managing investments, creative AI generating content, scientific AI accelerating research. General AI is fun. Vertical AI is valuable.
Right now, large language models are too broad, too abstract, and too hard to understand for most people. A blank chat box isn’t a product, it’s homework. If AI is to replace apps, it must become invisible, seamlessly integrated into daily workflows without forcing users to think about prompts, settings, or background functions.
The companies that succeed in the next wave will not only build better AI models, but also better AI experiences. The future of computing is not one AI that does it all. It’s many specialized AI systems that understand exactly what users want and execute them perfectly.
The entire software stack is being rewritten in real time. What’s replacing the old model?
Microservices over apps: Forget about bloated apps. The software of the future will be modular, on-demand, and AI-enabled. Book a trip? AI agents can pull up flight, hotel, and car rental info in real time without you having to open an app.
AI-powered marketplaces: The next software marketplace isn’t an app store. It’s an AI-native service marketplace where users can subscribe to AI agents for specific functions instead of downloading static software.
AI as a Service:Instead of selling standalone applications, developers build “skills” or “agents” that integrate into an overarching AI ecosystem and monetize through subscription or usage-based pricing.
Inevitable Disruption
This isn’t evolution, it’s a coup. Generative AI isn’t just another technology layer; it has the potential to eat the entire software industry from the inside out.
The old software model was built on scarcity. Control distribution, restrict access, charge a premium. AI obliterates all of that. The new model is fluid, frictionless, and infinitely scalable.
Platforms and businesses that fail to adapt will likely be consigned to the history booksalongside those who shrugged off the internet, mobile, and cloud before them.
AI isn’t just the next software wave; it’s going to destroy everything that came before it.The only question that remains is: who will ride the wave, and who will be drowned?
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