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Building an app universe comes at a price for Microsoft

April 06, 2012|By Michelle Maltais | This post has been updated. See the note below for details
  • A visitor tries out a Nokia Lumia smartphone on the first day of the CeBIT 2012 technology trade fair in Hanover, Germany, in March.
A visitor tries out a Nokia Lumia smartphone on the first day of the CeBIT… (Sean Gallup/Getty Images )

To be a player in the smartphone universe, you've gotta have the apps. Microsoft is hoping that if it builds them, more will come to use Windows Phones. So it's courting developers of top apps on other systems, but courting comes with a cost. And Microsoft seems willing to pay.

App developers have been reluctant to spend the resources on creating apps for the Windows Phone platform because there isn't yet a critical mass of users to justify doing so. So Microsoft, stuck in a bit of a vicious cycle, has approached developers of some of the top apps and offered to finance development for its system, according to the New York Times.

Building an app can come at a cost of up to $600,000, the New York Times said.

[Updated at 11:50 a.m. April 6: Microsoft said there's nothing new about what it's doing. "The limited use of co-funding to help initiate strategic projects is not new to Microsoft; furthermore developers tell Microsoft that the company does not engage in any co-funding activity outside the scope of our competitors," said Windows Phone senior marketing manager Casey McGee in an email.]

Now, this "Can't Buy Me Love" approach to pay to become more popular isn't something that either Apple or Google has had to do.

With 70,000 apps now, Microsoft is carefully building with core offerings such as Facebook, Evernote, Angry Birds, Fruit Ninja, Netflix  and YouTube.  Although Facebook and Foursquare are also available, Microsoft offered to pay to have them built, the New York Times reported.

Still, the Marketplace has no Pandora, Mint or MLB at Bat, which is supposed to become available this week. Skype is now in beta for Windows Phone.

Microsoft has also reached out to news organizations about having a presence in its app store. The New York Times and Los Angeles Times, among others, are available in the app marketplace.

While the New York Times said, "Microsoft provides assistance to help ensure that the app is best in class,” it didn't confirm whether Microsoft paid for its development.

[Updated at 10:19 a.m. April 6:  “Tribune Technology worked closely with the Microsoft team to develop Windows Phone 7 apps that work best for that platform,” said Nancy Sullivan, vice president of communications for the Los Angeles Times, whose parent is Tribune Co. Sullivan didn't comment on whether Microsoft paid for the app's development.]

Microsoft's app offerings aren't in the hundreds of thousands like Apple and Google, which carry 600,000 and 450,000 apps, respectively. But it's not the size of your catalog that matters; it's the quality of its offerings.

Now, it seems, Microsoft has a laser focus on what's at stake in the mobile market, with the upcoming release of the Lumia 900 by Nokia. To be a player these days, it's not enough to have the hardware -- or even the software. You've got to design and populate a world, and Microsoft sees that now.

Microsoft and Nokia recently announced an investment of about $12 million in AppCampus, a mobile app development program at Aalto University in Finland, to develop new apps for the Windows Phone platform.

[Updated at 11:50 a.m. April 6: "With the introduction of new lower cost devices and new geographies, Microsoft estimates that it’s grown our addressable market by 60%," McGee wrote. Microsoft expects that the advent of Windows 8 "will generate a new wave of customer demand and developer opportunity for Windows Phone."]

 But with Apple and Google -- and BlackBerry, for that matter -- so far ahead in terms of users and app ecosystem development, money might be a resource Microsoft must employ. Because time surely isn't something it can afford to spend more of.

[For the record, 11:35 a.m. April 6: The original version of this post referred to Nancy Sullivan as vice president of communications for Tribune Co. Sullivan is vice president of communications for the Los Angeles Times.]

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Building an app universe comes at a cost for Microsoft

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