*Source Chris Dixon, CDixon.org*
1. Time wasters: Apps that can be used for short bursts when you are waiting in line, etc. The most popular time wasters are games. Some apps are sometimes used as time wasters even sometimes as utilities – e.g. Facebook is both a time waster (checking status updates few minutes) and a utility (sending Facebook messages).
2. Core utilities: As a rule of thumb, core utilities are the apps on your home screen: camera, phone, contacts, texting, calendar, etc. Core utilities map to deeply engrained use patterns that usually existed before modern smart phones. In the past people might have carried around a paper calendar, a standalone camera, etc. Core utilities tend to be very sticky – if you gain widespread adoption for a core utility you can build long-lasting value.
3. Episodic utilities: Episodic utilities are apps that typically aren’t on the home screen but are extremely useful in certain situations. Some examples: Hipmunk when buying plane tickets, Uber when you need a car, and OpenTable for making restaurant reservations. The key with these apps is to target a well-defined situation and then become deeply associated with that situation. Making your app that is too broad or has multiple use situations can hurt you. Because many of these situations involve purchasing, these apps tend to be monetizable.
4. Notification-driven apps: This is an emerging category. Android has had a good notification system for a while, but the iPhone only made notifications useful in IOS 5. People tend to enable notifications for communication apps like email, texting etc. Thus far, notifications for other apps haven’t gotten widespread adoption because, among other things: it is easy to annoy users by over-notifying them, and running non-communications apps in the background tends to drain battery life. Expect this category to grow as apps get smarter about when to notify, and battery life improves dramatically over the next year or two.