Is Microsoft Looking for Storefront Space at the Mobile App Mall?

Ever since an alert blogger spotted a Microsoft ad last year apparently seeking someone to assist in the rollout of a mobile app store, there has been an assumption that the software giant would soon be inviting third-party developers to build on the Windows Mobile platform.

That expectation gained more gravitas with a report in The Wall Street Journal this weekend that Microsoft would soon be launching an online store to distribute software for cell phones running its Windows Mobile OS.

Another sign that suggests Microsoft is gearing up for a serious mobile phone play is the recent preview of Microsoft MyPhone beta. This application, which doesn’t have a release date assigned to it yet, “syncs information between your mobile phone and the Web,” according to the Web site. It will run on most handhelds running Windows Mobile 6.0 or above.

Microsoft did not respond to a request for comment in time for publication.

Late to the Party

Reading between the lines, it does indeed appear as though Microsoft will be launching some sort of mobile app store in the foreseeable future, Scott Testa, a professor of marketing atSt. Joseph’s University, told TechNewsWorld. “Frankly, I am surprised it has taken this long for them to do it — having a mobile app store has become a key competitive factor in this space,” he said.

Even CEO Steve Ballmer has said as much, Testa continued, referring to a recent speech. “He basically said what makes a software company great is not just the in-house development but the number of third parties that are developing applications for the platform.”

Mobile app development has taken off because there is a clear correlation between the existence of an application store and increased sales of the devices, Ryan Reith, mobile analyst with IDC, told TechNewsWorld.

Reith pointed to the increased sales the iPhone realized after its app store was launched.

“The whole idea of an app store is to bring attention to the platform and, ultimately, the device that runs on that platform,” he noted.

Market forces have made it incumbent upon handset manufacturers and OS providers to build a portal in which developers can get their apps out to consumers. “That is the way the game is being played now,” said Reith.

Still, Microsoft cannot simply post any application online and expect the app store to be a success — especially since it will be following Apple’s App Store and the Android Market, and perhaps other app stores (e.g., BlackBerry, Palm) currently in the works.

“The goal for Microsoft will be not just to enhance the product for current users but also to gain new users,” Reith said.

Posting developer-friendly tools and code will be a start. Also, a push to educate users and market the app store’s existence will also be key, he said. “Apple spent an enormous amount of money doing that, and it was a success for them for that reason.”

Revenue Model

Although Microsoft is clearly behind the curve, all may not be lost. Many developers are planning to target Windows Mobile for their activities, suggests a recent survey released in January by Evans Data.

After querying 400 wireless developers worldwide, researchers concluded that 94 percent expected the level of wireless enterprise application development to either increase (47.6 percent) or stay the same (46.4 percent) in the coming year, with the strongest expectations for growth in the Asia-Pacific region. Also, two-thirds expected the average revenue per user to increase in 2009.

Most key to Microsoft was the finding that money was the most important consideration when selecting a wireless platform to target, with revenue potential cited by a quarter of the developers and 21 percent identifying bigger marketing opportunities. Only 15 percent said platform openness was the most important consideration.

According to the survey, 40 percent more developers plan to target Windows Mobile than Apple iPhone, and 46 percent more plan to target .Net (compact framework) than Google’s Android platform.

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