Print 20 comment(s) - last by michael2k.. on Sep 2 at 12:28 PM

Microsoft is looking to learn from Apple, lock up some sweet revenues with upcoming "Skymarket"

Microsoft is preparing to unveil its next generation PC operating system, Windows 7, either next year or in early 2010.  With the release of the PC OS comes a frequently forgotten co-release -- Windows 7 Mobile.  This new OS is designed to work on cell phones, like Microsoft's previous Windows Mobile OS's.

Though it trails competitor Symbian greatly in phone OS market share, Microsoft is very serious about its cell phone business.  It also feels a surprising level of ownership of the business, despite this smaller market share, reflected in the comments of its CEO Steve Ballmer who once welcomed Google's upcoming Android OS to "Microsoft's world", referring to the phone OS market.

One strong point for Windows Mobile has always been strong third-party application support.  Microsoft claims it has 18,000 applications for its mobile OS.  However, with this strength comes a weakness.  While Microsoft has heavily encouraged mobile developers, it has failed to develop a distribution system for the software and thus misses out on key revenue.  Perhaps the best example of why this is so significant comes from competitor Apple who has much fewer applications and a much smaller market share, but is cashing in big with its "closed system" application store.

Such a concept is not foreign for Microsoft -- it runs the Zune Marketplace and Xbox Live Marketplace.  Now at last, it has unveiled plans to catch up to competitors, such as Apple, by announcing that Windows Mobile 7 will come with an applications store named "Skymarket", through which Microsoft will control the distribution of applications compatible with its OS according to CNET.  The move follows Google's announcement last week that it would have a similar store titled Android Market, for its own upcoming phone OS.

Microsoft also posted job ads with the description:

A unique opportunity and time of rapid change in the mobile industry for a senior product manager in the Mobile Communications Services team to drive the launch of a v1 marketplace service for Windows Mobile.

The advertisement goes on to state that key responsibilities include "preparation and driving the cross-group collaboration for the initial launch of the marketplace offering to the developer community this fall."  This bit is rather surprising because it indicates that Windows 7 Mobile may be launching before Windows 7, perhaps in an attempt to ward off Google's Android OS which is set to hit the market late this fall.  Windows Mobile 7 wasn't expected until Q3 or Q4 2009.

With Apple raking in $30M USD in revenue from its store in its first month of operation, and with Google preparing a similar store before its OS is even released, some critics say that Microsoft missed the boat.  Still, it is making moves to remedy any such errors and pounce on this lucrative income source.

Many are hopeful as well that the new applications store will be less closed than Apple's system.  Apple strictly regulates its software and regularly rejects software.  It also maintains a kill switch that can disable applications on users' cell phones.  Some in the analyst community have speculated that Microsoft's emulation of Apple's closed system will only go so far as its economics, not these strict policies.  They argue that to adopt such practices would place the electronics giant in danger of more accusations of monopoly (despite the fact that Windows Mobile is far from a monopoly in market share).

Comments     Threshold

This article is over a month old, voting and posting comments is disabled

By sprockkets on 9/1/2008 1:27:26 PM , Rating: 2
Apple sold $30 mill in REVENUE at their store, and gets to keep 30% of it. I doubt that will continue as high now that most iphone owners have apps now and the current base is saturated.

I mean come on, with WM you can download apps directly in the browser and have them installed with no issues. Microsoft doesn't need a stupid istore to get apps. If they do open a store, it would be like them opening shop for apps along with everyone else. Unlike Apple (and thankfully so), Microsoft does not have a monopoly on where you get your apps.

RE: Remember
By ltcommanderdata on 9/1/2008 1:42:06 PM , Rating: 2
I believe the time period of the $30 million was only for the original 22 launch countries for the iPhone 3G. There was another round of 20 countries that launched the iPhone 3G on August 22 and there will be a third round of 20+ countries launching in Q4. I think the App Store is still quite a ways from peaking and it definitely shows that their is a market for this type of store on mobile phones.

RE: Remember
By sprockkets on 9/1/2008 3:09:17 PM , Rating: 2
True, there is a market for apps, but all the istore does is take all the revenue every single other store makes and puts it in one spot. It's not as if there is not a big market already there for WM. Saying Microsoft needs to do the same thing is retarded.

If someone is smart, they should sue apple for having a monopoly on the distribution of apps. On the other hand, people know exactly how this works going into the Apple ecosystem. And of course there is always the unofficial jailbreak system.

RE: Remember
By akugami on 9/1/2008 4:00:46 PM , Rating: 2
Sometimes having things in a central location makes it look bigger than it is. Sure, Windows Mobile and Symbian (in it's various flavors) may have more apps on each platform but they are scattered to heck and back. Having a Nokia smart phone I can tell you that at times it is difficult looking for apps since you may have to search multiple sites along with google for something you want. It's basically the mall mentality vs having specialty stores scattered everywhere over a five mile radius.

For Apple, it's the way they've been doing business since forever. For software developers, it's a potential new revenue stream. For users, it's a convenient place to look for apps they might want to buy for added functionality.

There's almost no negative for Apple except maybe frustrated developers giving the finger and not creating apps for the iPhone. For developers, they are at Apple's every whim since even patches have to be approved by Apple. For users, lack of choice may mean slower fixes & updates to software and perhaps less variation (which can lead to innovation) since it's not like a more open OS like OSX, Windows, or Linux where one can develop what they want when they want.

Filing suit against Apple in this case would be stupidity. Yes they have a monopoly on the distribution of Apple iPhone apps but the iPhone does not have a monopoly in the smart phone market, let alone the cell phone market.

RE: Remember
By michael2k on 9/2/2008 12:25:02 PM , Rating: 2
Except there is nothing illegal about having a monopoly!

A lawsuit can only be filed if they do something illegal with that monopoly, such as retarding competition (preventing App developers from releasing for Android or WM would count) or tying (can only buy Apps on Macs would count).

RE: Remember
By omnicronx on 9/1/2008 3:44:23 PM , Rating: 2
The op is still correct, one would think that an once you download the apps that you will use on a regular basis, you will only be downloading from time to time. So regardless of how many other countries are launching, once those people also buy the apps that they consider a 'need' for their phone, everything else is just going to be an impulse buy.

Sustaining that same growth is going to be really hard.. but then again, everyone said the same thing about itunes, didnt they...

RE: Remember
By TheDoc9 on 9/2/2008 10:49:01 AM , Rating: 2
Sustaining that same growth is going to be really hard.. but then again, everyone said the same thing about itunes, didnt they...

Exactly, I've learned to bite my tongue when it comes to apples success. They've got the midas touch right now and will for the foreseeable future.

I realized the other day that's its because of girls and metro/gay guys buying their products. Both of these groups, especially girls think that their apple laptop/phone/pod is 'pretty', and they 'love' it. This is the common thread, at that point it's like the music industry. Where the girls go the guys follow.

This is the real reason apple has gained so much recently although it won't be written that way in the history books. Steve has tapped into the power of the sexes and he's a genius for doing it. Most other companies probably won't be able to pose a serious threat to apple as a whole for at least 5 years because product designers/managers generally don't think like this.

RE: Remember
By kelmon on 9/2/2008 7:02:57 AM , Rating: 2
Remember - convenience is king.

Microsoft doesn't need its own version of the App Store. Apple doesn't need one either. But, the thing is, customers like the App Store. Who wants to surf the intertubes for an application when you can download it from a store built into the device you are using? This certainly brings in revenue for Apple but the driving force behind this is that it is what customers want. Physical shops are popular because they bring together goods from different manufacturers into one location and customers find being able to browse in a shop to be convenient.

Ultimately, this is a logical step and one that I'm amazed wasn't done years ago.

RE: Remember
By omnicronx on 9/2/2008 11:02:24 AM , Rating: 2
Personally, I think this could be shaky ground for Microsoft. I find this article misleading in saying that Microsoft is emulating Apples closed system, because in reality they are not. Having a closed Microsoft store does not make it a closed system, as the hardware these programs will run on will vary by the manufacturer.

How Microsoft is going to be able to guarantee that these programs will work on all devices is beyond me. Apples system works because these programs are made and tested solely for the iphone, Microsoft can not claim the same thing.
The quality assurance testing could cost Microsoft more money than the gains this system will give them.

RE: Remember
By Locutus465 on 9/2/2008 9:39:16 AM , Rating: 2
Technically no, but would you complain about having one convinient interface from which you could get access to thousands of WM applications? Seriously now, I'm very much in favor of this, hell I'd like to see MS offer a similar service for WM 5 & 6, here's hoping it gets ported.

Windows Mobile Too Broad
By ltcommanderdata on 9/1/2008 1:24:14 PM , Rating: 2
Say what you will about the tightly integrated structure of the iPhone/iPod Touch, iTunes, and App Store, but it does provide consistency for both developers and consumers. The original iPhone, iPhone 3G and iPod Touch are very similar on a hardware level so a single software version can target all 3 devices.

In constrast, Windows Mobile is used in everything from PocketPCs to smartphones and portable media centre devices. That is in addition to how each manufacturer decides to implement each device such as physical keyboard or touchscreen, gps or no, camera or not, presence of a gpu, whether a simd unit is available and what features each carrier allows to be active on their network. I think this problem is a little bit different than the variety that is common in PCs, because PCs at least all have some type of IGP/GPU, a CPU with SIMD, a mouse, and a keyboard. The performance of the components might be different, but they are all present. In constrast, some phones might not have a physical keyboard at all so the program UI has to take into account the space needed for on screen input.

This is the same problem that Google faces with their Android Market or T-Mobile with their own market across all their phones. Differentiation and choice is great, but it'll be interesting to see how Microsoft, Google, and T-Mobile try to streamline app development for multiple device targets and guide users to download software that is compatible with their device.

RE: Windows Mobile Too Broad
By InternetGeek on 9/1/2008 5:15:24 PM , Rating: 2
The iPhone sucks because I can't play this:

or even put it as a ring tone!

RE: Windows Mobile Too Broad
By heffeque on 9/1/2008 5:44:30 PM , Rating: 2
It can do both. Have the bananaphone tune as a ring tone, and play the video. Not in flash, but transforming it into mp4 will do the trick ;-)

RE: Windows Mobile Too Broad
By sprockkets on 9/1/2008 6:15:16 PM , Rating: 2
A Cowon D2 could play it natively :)

RE: Windows Mobile Too Broad
By michael2k on 9/2/2008 12:28:05 PM , Rating: 2
A Cowon D2 couldn't receive phone calls nor browse the web.

RE: Windows Mobile Too Broad
By InternetGeek on 9/1/2008 7:48:03 PM , Rating: 2
That's the whole point. Using Java and Flash or putting a new ring tone without buying it from the store.

maturing platform
By tekzor on 9/1/2008 1:24:53 PM , Rating: 3
I use the app store on my touch and it still has a long way to go in quality and quantity. MSoft is doing this at the right time.

Quote of the day--
By nah on 9/1/2008 1:07:43 PM , Rating: 2
Many app(le)ts a day may keep financial analysts away.

The end is nigh!!!
By amanojaku on 9/1/08, Rating: 0
It's called innovation..
By c172pilot on 9/1/08, Rating: 0
"Vista runs on Atom ... It's just no one uses it". -- Intel CEO Paul Otellini

Latest Headlines
Inspiron Laptops & 2-in-1 PCs
September 25, 2016, 9:00 AM
The Samsung Galaxy S7
September 14, 2016, 6:00 AM
Apple Watch 2 – Coming September 7th
September 3, 2016, 6:30 AM
Apple says “See you on the 7th.”
September 1, 2016, 6:30 AM

Copyright 2016 DailyTech LLC. - RSS Feed | Advertise | About Us | Ethics | FAQ | Terms, Conditions & Privacy Information | Kristopher Kubicki