OpenAI's "App Store" dream encounters cold reality: ChatGPT super app plan issues frequently arise, stark contrast with Apple.

Last year, OpenAI announced an ambitious plan that allowed companies like Spotify (SPOT.US) and Booking Holdings (BKNG.US) to launch mini-apps within ChatGPT, enabling users to access their services without leaving the chat. This move was reminiscent of Apple Inc.'s debut of the App Store, seen as a key step in OpenAI's efforts to make ChatGPT an integrated platform. The promotion of ChatGPT applications may intensify competition with Apple Inc., leading consumers to turn to apps and service ecosystems outside of the App Store. In November of last year, Apple Inc. took measures to curb this trend by introducing a "mini-app" policy, requiring so-called super apps to pay Apple 15% of in-app purchase revenue as commission. However, six months have passed, and according to interviews with app developers, the progress of this plan has been slow. While over 300 apps have been integrated, they are all hidden and their functionality is limited by the cooperating companies who are hesitant to transfer customer relationships and payment processes to OpenAI. Developers have also complained about the tedious app approval process, numerous coding system bugs, and lack of usage data. This lackluster debut by OpenAI adds to their list of yet unrewarded product investments. The company recently announced the discontinuation of the Sora video generator, aiming to streamline their product line in preparation for a possible IPO later this year. OpenAI is also working on integrating its emerging browser Atlas with its chat and coding tools into a desktop application, but the browser has faced some issues in its early stages. As OpenAI faces increasing competition from Anthropic PBC and Alphabet Inc.'s Alphabet Inc. Class C, third-party integrations are crucial in attracting more users. This will also help OpenAI ultimately achieve its goal of integrating its software into consumer devices. (Last year, OpenAI acquired the hardware startup of former Apple Inc. executive Jonathan Avi for nearly $6.5 billion and is currently working with Avi to develop a range of products). The integration of ChatGPT applications has had mixed results. Stubhub Holdings (STUB.US) and Booking do not currently view the ChatGPT app as a significant marketing drive. Booking CEO Glenn Fogel stated in an interview, "Discovering listings on Booking.com is easier." He also added that the traffic generated from ChatGPT is still "quite small." He noted that the company's spending on Alphabet Inc. Class C ads is still "very significant" compared to their investment on the OpenAI chat. OpenAI has stated that their app platform is at the core of their product strategy. "We are still in the early stages of platform building, and we are aware that the developer experience needs improvement in certain aspects," a spokesperson said, adding that the company is committed to making the platform "more reliable, predictable, and easier to expand over time." Consumers' unease with artificial intelligence is not uncommon, as a new report from advertising technology company Criteo shows that 55% of consumers globally are "particularly cautious about sharing payment information with AI." The report notes that while consumers are trying to use AI as an assistant, they still want to retain control. Developers also find the app development process frustrating, even if their apps are accepted. Fractal, a startup that develops chat app tools for non-programmers, CEO Hanh Nguyen noted that for some developers, getting their apps published in the app store is a long and challenging process. Some app rejections are due to "false positives" flagged by OpenAI's AI-assisted review system, requiring human intervention to resolve. OpenAI has stated that their approval process has significantly sped up, thanks to streamlined processes and developers addressing previous issues. According to Elliot Garreffa, co-founder of a third-party platform tracking ChatGPT apps, OpenAI approved nearly 70 apps last week, compared to 3 to 5 apps previously approved daily. (OpenAI declined to disclose specific numbers.) Even after apps are accepted, developers may encounter issues. Garreffa noted that since OpenAI defines prompts in ChatGPT as private data, programmers have limited access to analytical data on app performance, resulting in them having little awareness of user engagement. Garreffa added, "One common pain point we keep hearing from businesses is, 'My app is live, but I have no idea if it's running smoothly or reliably,' or if it can reach the target users." As the platform is still in its early stages, there are currently no effective methods to influence app visibility, unlike iOS app developers who can boost rankings through various testing methods. Developers are also dealing with bugs in development tools, making their work more challenging. Fractal CTO Max Ockner stated, "Apps in development mode may encounter glitches, and we have to figure out 'What's going on?' and then check what the developers changed before the official release." While OpenAI retains change logs for app frameworks, the documentation is not promptly updated with bug reports submitted by users on their public developer forum. Ockner said, "The gates have not yet opened, and we are still waiting for that moment to arrive."