Is An App A Product Or A Service?

Determining whether an app falls under the category of a product or a service can be more nuanced than one might initially think. Traditionally, a product is something you can purchase and own, whereas a service is something you utilize or benefit from, often without taking ownership. When it comes to apps, the lines can blur.

making apps

An app is a type of software that you can install and operate on various electronic devices such as computers, smartphones, or tablets.

Most apps serve a specific function, like editing photos, managing finances, or connecting with others through social media.

While it's common to see apps as products, considering that you can download and use them much like any other good, there's an important distinction to highlight. Many apps come with a service component, especially those that run on a subscription model or utilize cloud-based functionality.

In these cases, what you're really paying for isn't just the app itself but an ongoing service. For example, cloud-based apps provide you with access to software hosted on a remote server, meaning you're paying regularly for the convenience of using the software and its related services, such as storage, customer support, and regular updates.

The question isn't solely about ownership; it's about the value offered and how it's delivered.

When you begin to peel back the layers, you'll find that while some apps are sold as one-time purchases, making them feel more like traditional products, others are clearly services disguised in the form of an app.

As the digital landscape evolves, the distinction between products and services in the context of apps continues to challenge traditional definitions, urging us to consider the multifaceted ways in which we interact with and value software.

Defining Apps

When you hear the term “app,” it usually refers to a software application that's designed for a specific purpose or function, often to be used on mobile devices like smartphones and tablets or desktop systems.

Applications vs. Software

Applications, also known as apps, are a type of software designed to perform specific tasks for the user. While all apps are software, not all software are apps.

Software is a broader term that includes everything from operating systems to complex database management systems. Applications are generally more user-centric and task-specific.

Types of Apps

  • Native Apps: Built for a specific platform like iOS for Apple devices or Android for Google-supported devices.
  • Web Apps: Accessed via web browsers and not installed on your device.
  • Hybrid Apps: Combine elements of both native and web apps.

App Platforms

App platforms are environments in which apps are made available for download and use. Here's where you'll typically find them:

PlatformApp StoreDevices
iOSApple App StoreiPhone, iPad
AndroidGoogle Play StoreAndroid devices
WindowsMicrosoft StoreWindows desktops, tablets

Each platform caters to its respective devices, with iOS apps not available on Android and vice versa. Some developers create cross-platform apps that can run on multiple systems, allowing for a broader user reach.

Apps as Products

When you think of apps, you might not immediately classify them as products. However, just like any physical item you purchase, apps possess characteristics of products, have a lifecycle, and require strategic marketing to become profitable.

Characteristics of Products

Tangible vs. Intangible: Traditionally, a product is a tangible, physical item that provides value to the customer. An app, though software, can be considered a product insofar as it is a branded entity sold for profit. It's tangible in the sense that it’s a distinct item you can download, install, and utilize on your device.

  • Value: Just like physical products, apps offer unique value through features and functionalities designed to meet your needs.
  • Brand: The app’s identity, much like that of a physical product, is shaped by its brand. This can significantly influence its perceived value and customer loyalty.

Product Lifecycle

Every product, including an app, goes through a lifecycle composed of development, introduction, growth, maturity, and decline.

  1. Product Development: Here, the app is just a concept being designed and tested.
  2. Introduction: The app is launched and marketing efforts begin.
  3. Growth: With successful marketing, the app gains popularity, and its user base expands.
  4. Maturity: The app has a steady user base; updates may be released to retain interest.
  5. Decline: Newer apps emerge, and interest in the existing app may wane unless rejuvenated by significant updates or changes.

Marketing for Apps

Effective marketing is critical to making your app profitable. Your marketing team should focus on highlighting the app's unique selling points and delivering them to the right audience.

  • Targeting and Positioning: Determine your target users and position your app to meet their specific needs.
  • Strategies: Utilize a mix of digital marketing techniques such as SEO, content marketing, social media campaigns, and targeted ads.
  • Product Management: Continuous product management is vital in responding to market changes and user feedback to keep the app relevant and appealing.

Apps as Services

When you think about apps, it's crucial to understand that they're often more than just a product you purchase; they're a service you subscribe to, engaging with features and functionalities that evolve over time.

Service Attributes

The core concept of an app as a service lies in its intangible nature; you can't physically touch a service, but you experience its benefits. Services cater to your specific needs and are designed to provide a solution, rather than just a static tool. Apps as services come with inherent attributes such as flexibility, scalability and typically operate under a subscription-based model that emphasizes reliability and continuous updates.

Key Characteristics of Service-Based Apps:

  • Intangibility: No physical form, the value lies in the functionality.
  • Scalability: Can grow in capacity to match your usage needs.
  • Subscription Model: Regular payments for ongoing access and support.

Providing Continuous Value

Service-based apps focus on providing continuous value. You're not just buying a static program; you're investing in a solution that evolves. As your needs change, the app adapts, offering new features and improvements. This ongoing development relies on the understanding that your use of the service will continue over time, with the app being continuously refined to meet emerging challenges.

Ways Apps Provide Continuous Value:

  • Regular Updates: Consistent provision of new features and bug fixes.
  • Adaptation to User Feedback: Implementing changes based on your preferences and feedback.

SaaS and PaaS Models

Within the world of app services, SaaS (Software as a Service) and PaaS (Platform as a Service) are prevalent models you'll encounter. SaaS delivers a complete, cloud-based software solution that you access via the internet, freeing you from complex software and hardware management. PaaS, on the other hand, provides a platform allowing you to develop, run, and manage applications without the complexity of building and maintaining the infrastructure typically associated with app development.

Comparison of SaaS and PaaS:

Service ModelDescriptionUsage
SaaSSoftware available over the internetUse directly for business solutions
PaaSPlatform for app creation and deploymentDevelop and manage applications

Both models aim to meet your ever-changing needs with their flexibility and are structured around the premise of service over product.


In defining whether an app is a product or a service, it's essential to consider its characteristics and the value it offers. When you download an app, what you're actually getting is a digital product—a bundle of code designed to fulfill a specific function. This product is tangible in the sense that it's a clear item you can obtain and use.

However, apps often blur the line into service territory. If the app requires ongoing support, updates, or utilizes a subscription model for functionality, it's no longer static; it evolves. Services involve customer support, cloud storage solutions, and regular content or feature updates.

Whether an app leans more towards a product or a service depends on its operation model:

  • Static product-like apps:
    • One-time purchase
    • No need for continual user support or updates
  • Dynamic service-like apps:
    • Subscription-based access
    • Regular updates and active user support

Most modern apps tend to offer a hybrid experience, combining product characteristics with service elements. Thus, the distinction isn’t always black and white. Your understanding should factor in the app's business model, user interaction, and lifecycle to land on the most accurate categorization.

Rich Kainu

Article by

Rich Kainu

Rich Kainu is the founder and a main contributor to Deal In Digital. He has over 12 years of experience in digital product creation, sales, and marketing as well as content creation strategies..