Microsoft Paying Devs to Create Apps for Marketplace, and Why Not?

Microsoft and Nokia are arriving late to the mobile party. To compensate, The Times reports, they’re paying developers to make sure key apps are in place.

The Nokia Lumia 900, the first real test of the Microsoft-Nokia relationship, goes on sale this weekend. Nokia has spared no expense on the hardware, Microsoft has labored over its Windows Phone Mango update, and AT&T is contributing super-fast 4G Long-Term Evolution (LTE) speeds. That leaves just one last area for scrutiny by consumers considering taking a chance on what all parties hope will be the third major competitor in the mobile ecosystem: applications.

To more quickly fill up its Marketplace app store, Microsoft has been paying developers to create popular applications, The New York Times reported April 5. Developers, understandably, go where the money is, which right now is Apple€™s iOS and Google€™s Android platforms. It€™s not that they€™re not interested in developing for Microsoft€™s Windows Phone, the thinking goes, the latter€”with its currently minimal following and so also-minimal payback€”just isn€™t a priority. Developers can often only afford to develop for one or maybe two platforms, and these days their time is even more divided by the need for tablet-optimized apps.

The Times reports that Casey McGee, Microsoft€™s senior marketing manager for Windows Phone, confirmed that company was offering developers €œan array of incentives,€ but declined to list all the apps Microsoft has financed.

€œLooking back at the last major effort to challenge iOS and Android, the Palm platform had a very weak applications library, which limited its chances of success right from the start,€ Ken Hyers, and analyst with Technology Business Research (TBRI) told eWEEK. €œMicrosoft is ensuring that, having made a much greater investment in Windows Phone, that it doesn€™t stumble at the most basic level by not having an appropriate app portfolio available for its devices.€

An executive at Foursquare told The Times that it had been compensated by Microsoft to build a Windows Phone app, as did an executive at Cheezburger Network, which makes entertainment sites like €œThe Daily What€ and €œI Can Has Cheezburger.€

Marketplace now has more than 70,000 apps to the Apple App Store€™s 600,000-plus and Google Play€™s nearly 400,000. Apps such as Angry Birds, Netflix, You Tube and Amazon Kindle will be available for Nokia€™s Lumia, but notably missing are other popular apps such as Pandora, Instagram€”which only developed an app for Android this week€”and games from Zynga, the maker of Farmville and Words With Friends.

More important than chasing Google or Apple€™s numbers is making sure Marketplace has the apps the majority of people want, and in the interest of this, Microsoft is taking matters into its hands in a way that neither Apple nor Google need to.

Roger Kay, principal analyst with Endpoint Technologies, explains the application conundrum this way: Most people use about 20 apps. Of those, 19 are popular applications like email, a mobile browser€”things Microsoft can even build itself€”while the last app is an €œoddball app,€ which isn€™t common to a lot of other people. Then there are about 100 €œcritical apps,€ like Instagram that users want, Kay explains, suggesting a theoretical budget of $100,000 for each app for a total budget of $10 million, a figure he calls €œnot outrageous.€

€œBut then there€™s the long-tail group. For many people, their twentieth app won€™t be one of those 100,€ Kay explains. €œSay I€™m a mariner and I need my coastal navigation app. If a platform doesn€™t have it, it€™s not going to work for me.€

Such long-tail apps, says Kay, aren€™t very monetizable, as there€™s a small amount of revenue associated with each one.

€œThat problem only solves itself when the platform gets big enough that the developers have to pay attention €¦ and come over on their own.€

Given how late it€™s arrived to the party, helping the platform to get to that point€”and give a fair shot at success to the Lumia 900 and whatever else Nokia has in store for later this year€”is what Microsoft is doing, in paying to make sure its shelves hold those critical 100 or so apps. No shame in that.

Plus, with Nokia and Microsoft most aggressively angling the Lumia 900 toward potential feature-phone converts, as Forrester analyst Sarah Rotman Epps pointed out in an April 5 blog post, perhaps those users won€™t even know what they€™re missing.