Error occurred in deployment step 'Install app for SharePoint': The System Account cannot perform this action.

After different suggestion tried from Internet search I found the following 2 options worked for me.

1) Follow the article steps http://www.codeproject.com/Articles/515677/MyplusFirstplusSharepoint-HostedplusAppplusinplus2

and reset your IIS. It will work

2) This is a security feature in the SharePoint 2013 that you cannot deploy an app using System Account. So what is the alternative?

Create another account and give permissions, so that it is NOT the system account.

So I did the following: •Created a new account in AD as “admin1”
•Added “admin1” account into Farm Administrator’s group in Central Admin
•Added “admin1” account as Site Collection administrator to the target developer site
•Added “admin1” account into local administrators group

Ref:

To "Run as different user" using Context Menu
1. Press and hold the Shift key and right click on the program's shortcut or BAT, CMD, EXE, MSC, or MSI file, then click/tap on Run as different user. (See screenshot below)
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2. Type in the user name and password of the user account that you want to run this program as. (see screenshot below)
NOTE: If the user account is on a domain, then you would use UserName@Domain or Domain\UserName for the user name instead.
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3. If prompted by UAC, then click/tap on Yes.

4. The program will now be running as that user.

5. When done, simply close the program to stop it from running as that user.


Helpful Post  ref: 
http://www.sevenforums.com/tutorials/419-run-different-user.html
http://blog.mannualag.com/2013/03/07/nuisances-of-starting-developing-apps-for-sharepoint-2013/
 

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