Microsoft Uses Deep Pocket Strategy in Mobile App War


Whatever happened to the Kin? Image: Verizon

Apple has first-mover advantages and revenue share. Google is making app development accessible to everyone. How is laggard Microsoft planning on catching up in the smoking hot mobile app market? By reaching into its amply padded pockets. The usual, in other words. Bloomberg BusinessWeek has more:

Microsoft Corp. is paying developers to build mobile applications for its Windows Phone 7 system to help it narrow a lead by rival products from Apple Inc. and Google Inc.

The company is providing financial incentives ranging from free tools and test handsets to funds for software development and marketing, said Todd Brix, a senior director at Microsoft who works with app developers. In some cases, Microsoft is providing revenue guarantees, and will make up the difference if apps don’t sell as well as expected, he said.

Microsoft revamped its flagship mobile operating system to recoup market share lost to Google and Apple. To win consumers, the world’s largest software maker needs an ample supply of games, music and navigation apps when handsets with Windows Phone 7 reach stores later this year. Some developers may be reluctant to sign up before they know Windows Phone will lure enough customers, said Kevin Burden, an analyst at ABI Research.

“In no way do they want to say, ‘Trust us, there will be apps at some point,’” said Burden, who is based in Hopkinton, Massachusetts. “If that means paying developers, so be it. It’s a good strategy for them.”

It would be an even better strategy if Microsoft could come up with an innovative mobile product that people really wanted to buy.

Reggie Middleton has an interesting take on why Microsoft might actually be a force to be reckoned with (on Zero Hedge).