Microsoft Blasts into the App Store Game

Building on the Mobile World Congress announcement of its own application store, made alongside a number of other app store launches, Microsoft recently provided more details about Windows Marketplace for Mobile at CTIA Wireless 2009. Microsoft announced it had gained support for its storefront, including a slew of planned apps and additional functionality for Windows Mobile 6.5 (also unveiled at MWC).

Microsoft's initial app developers will include iPhone favorites Accuweather, Electronic Arts Mobile, Hands-On Mobile and Pandora, among an announced list of 20 spanning social networking, gaming, media, utility and personal productivity companies. Marketplace for Mobile is slated to open later in the year to supplement the 20,000 apps Microsoft already offers through its distribution partners. Launching the storefront was a necessary move for the software-maker, as it faced increasing competition from similar stores from Apple, Google, handset-makers and potentially even carriers.

With the onslaught of mobile app store launches have come companies offering carriers the ability to get into the market themselves. Several carriers overseas, including Australia's 3 and the U.K.'s O2, have taken this route, but it has yet to catch on in the U.S., where partner options abound. Microsoft is granting operators that partner with it access to a branded section of the catalog where they can market their own apps and services to their customer base, hoping this compromise will sway them.

Microsoft hasn't announced any partners yet, but senior product manager Inigo Lopez said it might in the future. “For now, we believe this Marketplace is a great option for Windows Mobile,” he said. “Operators should be excited that phones will come with this and it will give their users a great experience and keep them more engaged with their devices.”

Microsoft differentiates its storefront by the choice of devices — including more than 140, in a variety of form factors and on an established WinMo platform — Lopez said. Most developers already are familiar with the development tools, having used the same set on Windows on the PC or server.

Like Apple, Microsoft is offering its developers a 70% cut of the sales revenue of their apps. Unlike Apple, however, the company is emphasizing transparency throughout the certification process and guidance and support throughout development. Developers will receive detailed feedback during and after the app certification process on the Windows Marketplace for Mobile developer portal. The goal is to let them spend less time navigating the approval process and more time developing, Lopez said.

“From a developer perspective, we've been trying to understand how to make it better to obtain a better return on investment than they do,” he said. “A main thing we've heard is making it easy for them. They want to spend their time developing the app, not working on the channels or marketing.”

Developers can employ targeted pricing strategies by setting the price of their apps in each market or offering them for free. The first five app submissions to the Marketplace are covered in an introductory $99 annual registration fee, but Microsoft is requiring the developer to pay an additional $99 for each submission within the annual period. This is waived for student developers enrolled in Microsoft's DreamSpark program. Lopez said the $99 is to cover costs of verifying the developer's identity. The $99 per-app cost, which is unique to Microsoft, goes toward making sure the app complies with security policies and runs well on the operating system. The “first five free” is a promotion for the first year, but Microsoft hasn't decided whether that will extend into 2010, he said.

The Marketplace will be available in 29 countries, with registration opening this spring and app submissions accepted beginning this summer. Users can buy apps with a credit card or direct to their phone bill, with the ability to return an app they within 24 hours for a full refund.

The mobile app store market has become increasingly fragmented with every handset-maker, software provider and carrier requiring its own unique version of an app. Several companies have claimed to achieve the “write once, deploy everywhere” Holy Grail, but these still have their limitations. This ideal typically only works for the simplest of apps, said Mark Donovan, senior analyst with comScore. For this reason, it is much easier for a handset-maker like Apple to launch a store around a single platform than an operator to enable a similar experience across all different types of handsets, Donovan said.

“What has happened in the interim — you see some smartphone platforms say, ‘Forget it; it's way too complicated. We have a device with a bunch of capabilities; we have a control of the hardware and software; we're going to create the sandbox for developers to play in,’” he said. “The question is, is it lucrative enough to get developers into the fold? Apple has done a really good job of that. That's something [Research In Motion] and Windows Mobile are trying to do by getting the same enthusiasm and excitement.”

The industry also is working on a standard mobile app development tools platform with its recent creation of the Eclipse Foundation, lead by Genuitec, Motorola and Nokia. The participating members, which also include IBM, RIM and Sony Ericsson, are moving toward providing a common development environment defined collaboratively across the industry. Still, this initiative doesn't apply to software providers such as Apple, Google or Microsoft, which likely will stay hands-off.