Microsoft Mobile Apps 'Worth More' than 99 Cents, Says Developer

Microsoft is encouraging developers of mobile applications to charge more than 99 cents for the software they post on Microsoft's Windows Marketplace for Mobile. Rival companies such as Research In Motion have already boosted the minimum price for many mobile applications. Microsoft's move can also be seen as a shot at Apple, whose App Store charges 99 cents for a wide variety of apps-something that could frustrate developers looking for better margins on their products.

Microsoft is encouraging developers to charge more for mobile applications they design for the company's newest mobile-device operating system, Windows Mobile 6.5.

"We would definitely want to promote that you make more money selling applications than selling your application in a dollar store," Loke Uei, senior technical product manager for Microsoft's Mobile Developer Experience Team, told a gathering of mobile application developers in Redmond, Wash., on Aug. 19. "I know, 99 cents is interesting-yes, consumers like to pay 99 cents for applications.

"But 99 cents, come on, I think your app is worth more than that."

A Microsoft spokesperson confirmed to eWEEK on Aug. 20 that Windows Marketplace for Mobile, which will be available with Windows Mobile 6.5 in the fall, will allow independent software vendors and developers to set their own price for applications. The spokesperson also suggested that applications for the Marketplace would generally fall in the $0.99 to $29.99 price range, with a selection available for free.

Other mobile-application providers already charge generally higher prices for their software. For example, Research In Motion's BlackBerry App World has set an initial floor of $2.99 for its paid applications, which theoretically could reach a price as high as $999.99. Palm may also set its app prices higher than $0.99.

In addition to capitalizing on that trend, Microsoft may also be playing into the frustrations of developers wanting a higher profit margin from their App Store applications. Although developers can charge far larger amounts for iPhone software they develop, the sheer number of apps present in each of the App Store's categories can make it difficult for developers to build an audience unless they price their wares competitively, which often means zero-cost or $0.99.

On July 27, Microsoft opened its Windows Marketplace to developers, a decision that the company hopes will allow it to build an ecosystem of 600 applications before Windows Mobile 6.5 launches in October. Windows Mobile 6.5 is designed to make Microsoft's mobile operating system more competitive against Palm, RIM and Apple, with features such as built-in Flash support and on-screen icons and widgets that can be manipulated via multitouch.

Microsoft is claiming that the applications available through Marketplace for Mobile will be backed by a "money-back guarantee."

Microsoft has a potentially tough road ahead in the mobile space. Recent rumors from Taiwan suggest that, to better compete against its rivals, Redmond may offer two mobile operating systems by the fourth quarter of 2010, Windows Mobile 6.5 and 7, the latter of which will include more functionality and be firmly aimed at the higher end of the market currently occupied by the iPhone and the Palm Pre.

Although mobile applications are already a big business for tech companies, analysts predict that the market will only grow in years to come. According to a report by Juniper Research, the number of mobile application downloads will approach nearly 20 billion per year by 2014.