The likely end state is the web becomes a niche product used for things like 1) trying a service before you download the app, 2) consuming long tail content (e.g. link to a niche blog from Twitter or Facebook feed).- The Decline of the Mobile Web
This will hurt long-term innovation from a number of reasons:
1) Apps have a rich-get-richer dynamic that favors the status quo over new innovations. Popular apps get home screen placement, get used more, get ranked higher in app stores, make more money, can pay more for distribution, etc. The end state will probably be like cable TV – a few dominant channels/apps that sit on users’ home screens and everything else relegated to lower tiers or irrelevance.
2) Apps are heavily controlled by the dominant app stores owners, Apple and Google. Google and Apple control what apps are allowed to exist, how apps are built, what apps get promoted, and charge a 30% tax on revenues.
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