ChatGPT App Store Faces Challenges

According to Bloomberg, OpenAI announced an ambitious plan last year to allow streaming music platforms like Spotify to launch mini-apps within ChatGPT, enabling users to access these services without leaving the chatbot interface. This move draws parallels to Apple’s launch of its app store and is seen as a significant step towards making ChatGPT an integrated platform.

However, six months later, developers interviewed reported that the initiative has faced slow uptake. While ChatGPT has integrated over 300 applications, the entry points are obscure, and functionalities are limited due to partner companies’ reluctance to cede customer relationships and payment processes to OpenAI. Developers have also complained about a cumbersome application approval process, coding system vulnerabilities, and lack of usage data.

The lukewarm debut of the ChatGPT app store has extended OpenAI’s list of unprofitable product bets. Last week, the company announced it would halt development of its Sora video generator as part of efforts to streamline its product line ahead of a potential IPO later this year. OpenAI is also attempting to integrate its newly developed browser with the chatbot and programming tools into a single desktop application. This browser, named Atlas, has also faced some growing pains in its early stages.

OpenAI’s push for an application ecosystem could intensify its competition with Apple, steering consumers towards a new application and service ecosystem outside the App Store. In November, Apple attempted to curb this with a “mini-program” policy requiring so-called “super apps” to pay a 15% cut on in-app purchases.

As OpenAI faces increasing competition from Anthropic and Google, third-party integration will be crucial for attracting more users. This will also help OpenAI achieve its ultimate goal of embedding its software into consumer devices. Last year, OpenAI acquired hardware startup LoveFrom, founded by former Apple executive Jony Ive, for nearly $6.5 billion and is currently collaborating to develop a series of products.

Platforms like Stubhub and travel e-commerce company Booking have yet to view ChatGPT applications as significant customer acquisition sources. Booking CEO Glenn Fogel noted, “It’s easier to find housing information on Booking.com.” He added that the referral traffic from ChatGPT remains “very small,” and the company’s advertising spend on Google is still “very large” compared to its investment in OpenAI’s chatbot.

OpenAI claims that its application platform is central to its product strategy, with a spokesperson stating, “We are still in the early stages of building and recognize that there are areas for improvement in the developer experience.” The company is committed to making the platform “more reliable, predictable, and easier to develop over time.”

The mixed reviews of OpenAI’s app store plan have dampened some of Wall Street’s enthusiasm surrounding the technology. When the plan was initially announced, a long list of initial partners, including Figma, Expedia, and Target, saw their stock prices surge, as this collaboration offered a new way to acquire users in the AI era rather than being disrupted by it.

AI Struggles to Provide Superior Service

Some consumer companies believe that collaborating with AI chatbots is necessary, viewing them as an emerging search channel similar to Google. However, AI assistants are not the only way consumers learn about brands, and these chatbots have not yet replaced Google.

A spokesperson for food delivery company DoorDash stated that they found that no single collaboration channel, whether it be ChatGPT, Google, or a button on Yelp, can “monopolize user attention.”

In recent earnings calls, executives from Airbnb, Booking, Expedia, DoorDash, and eBay emphasized that their superior payment systems, 24/7 customer support, user verification mechanisms, and review systems are the reasons they will not be replaced by AI tools.

Jefferies analyst John Colantuoni remarked, “Currently, AI models do not have the capability to provide superior service. This creates a ‘chicken or egg’ situation: only when AI offers better or cheaper services will consumers turn to it, and companies have no incentive to support an intermediary platform.”

Users Must Leave ChatGPT to Complete Uber Rides

Few applications offer options to complete checkout without leaving the OpenAI chatbot. For Uber, for example, users must first input “@Uber,” then tell the chatbot their pickup and drop-off locations to see an estimated fare range. Passengers still have to complete bookings on Uber’s platform, as the entire process is quicker there.

Consumer Distrust

StubHub allows ChatGPT users to search for concerts, events, and available seats based on preferences like budget or viewing angle. However, users still need to visit the website to complete purchases, and even just zooming in on a seating chart requires navigating away from the chatbot.

StubHub’s President and Chief Product Officer Nayaab Islam stated that users have not yet adopted chatbots as a “primary avenue” for shopping, citing concerns about sharing credit card information with AI assistants.

However, he also mentioned that given the chatbot’s billions of users, not participating would be “unwise.” He said, “For businesses like ours, having more options is a good thing.”

Consumer unease with AI is widespread. A recent report from advertising technology company Criteo revealed that among over 6,000 consumers surveyed globally, 55% are “particularly cautious about sharing payment information with AI.” The report noted that shoppers are trying to use AI as an assistant but “have not yet relinquished control.”

Research also found that among shoppers who frequently use AI chat tools, 96% still use other channels throughout the shopping process, such as social media, traditional search engines, and retailer websites.

Developers Find the Process Frustrating

Not only have consumers not fully embraced the ChatGPT app store, but developers also find the application development process frustrating.

Fractal, a startup that develops chatbot application tools for non-coders, has its CEO Hanh Nguyen stating that for some developers, publishing applications to the app store has been a long ordeal. She noted that some rejections were due to OpenAI’s AI-assisted review system flagging “false signals,” requiring intervention from the company’s human support staff to resolve.

OpenAI claims that it is speeding up the approval process by simplifying it and allowing developers to rectify previously identified issues. According to Elliot Garreffa, co-founder of a third-party platform tracking ChatGPT applications and testing their performance, OpenAI approved nearly 70 applications last week, compared to only three to five daily previously.

Garreffa noted that some developers still encounter issues even after their applications are accepted. Due to OpenAI defining chatbot prompts as proprietary data, programmers find they only receive “very limited” application performance analytics data, leaving them almost unaware of user engagement.

Meanwhile, developers are also dealing with vulnerabilities in the development tools, making their work even more challenging.

“The door to mass adoption has not fully opened yet; we are actually still waiting for that moment to arrive,” said Fractal CTO Max Ockner.