It's a different architecture, not a new folder
The App Router is built on React Server Components, Suspense, and a streaming HTTP response model. None of those existed in the Pages Router era. The five things you actually get:
- Server Components by default. Components render on the server and ship zero JavaScript for that node. Heavy libraries (markdown, syntax highlighting, date formatters) stay server-side.
- Nested layouts that persist. The dashboard shell doesn't re-render when you click between dashboard tabs. State and DOM stay alive across navigations.
- Streaming & Suspense. The page sends HTML in pieces — the cheap parts arrive instantly, slow data streams in. No full-page spinner.
- Parallel routes. Multiple route segments render at once into the same layout, each with its own loading/error boundary.
- Server Actions. Mutations live on the server, called directly from forms. No
/api/…route table for CRUD.
What this changes for the team
You stop writing API routes for every server-side need. You stop wrapping pages in client-side data libraries that refetch on every navigation. You start composing UI from server-default leaves with islands of 'use client' where interactivity actually lives.