I have created an Azure Web App today and it has a Mobile section in the Settings which contains Push notification, Mobile Authentication, etc. You can even download the source code for a mobile client app. I know that this used to be part of Mobile App (Mobile Service). I have created an Azure Mobile App to compare with Web App and they look the same in terms of Settings and Tools. Even the Icon is the same.
My question is what is what is the difference between Azure Web App and Azure Mobile App?
There is no difference. To quote the documentation: The only difference between the three app types (API, web, mobile) is the name and icon used for them in the Azure portal. Behind the scene it is already using app service all the time.
A web app is an app that is available online and can be used on multiple devices, but a mobile app is an app that only works on a mobile device. Learn about the differences between the two in this guide.
A Web App is a web application that is hosted in an App Service. The App Service is the managed service in Azure that enables you to deploy a web application and make it available to your customers on the Internet in a very short amount of time.
Azure App Service is a fully managed platform as a service (PaaS) offering for professional developers. The service brings a rich set of capabilities to web, mobile, and integration scenarios.
Like you, I couldn't get my head around the difference between the different types of App Service apps (Web Apps / Mobile Apps / API Apps). Judging by the fact that no one has really answered your question, it looks like we weren't the only ones.
It made no sense to me that Web Apps, Mobile Apps and API apps were distinct things: surely the whole point is that you should be able to expose an API that serves your web site, your mobile apps, any other kind of client, making use of whichever features you need for your use case?
And, lo and behold, buried deep in the Azure docs:
The only difference between the three app types (API, web, mobile) is the name and icon used for them in the Azure portal.
Yep: they're exactly the same.
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