Microsoft's Last-Ditch Effort

Microsoft's (Nasdaq: MSFT  ) Windows phone-operating system hasn't been a very hot commodity for app developers of late, thanks to a notable shift toward the proprietary platforms of industry rivals Apple (Nasdaq: AAPL  ) and Google (Nasdaq: GOOG  ) . With the growing popularity of smartphones and tablets running Apple's iOS and Google's Android operating systems, developers have largely focused their time and effort on making applications and games that run on these platforms.

As the number of supported apps and games increases, products powered by Apple and Google's operating systems attract more potential users, which in turn creates a cycle of mutual success. Unfortunately, the same cannot be said about Microsoft. In fact, the considerable lack of applications available for Windows-based smartphones is a major reason behind people's reluctance to purchase a Windows-based device.

Figures speak for themselves
According to a survey conducted by IDC and Appcelerator, 37% of developers are willing to make applications for Windows phones, compared to 89% interested in Apple's iOS and 79% keen on the Android platform. The results are evident from the fact that while the Windows Marketplace now sports more than 65,000 apps, Apple's app store and Google Play boast more than half a million offerings.

What makes it even worse is the fact that Windows apps are priced at a higher rate due to the smaller customer base. For instance, an app that sells for $1 in Google Play may cost you $3 in the Windows Marketplace.

Fortunately, Microsoft hasn't been taking this lying down.

Appealing to developers 
Recently Microsoft announced that it would collaborate with Nokia (NYSE: NOK  ) and invest $24 million in a development program called "AppCampus." The program, which would be managed by the Aalto University in Finland, is expected to support, train, and generate funding for developers and students who make Windows phone-based apps. Microsoft hopes this will make for more quality applications available through its smartphones.

Qualcomm and NVIDIA join the pack for PC development
And Microsoft isn't just working with Nokia. Even hardware companies such as NVIDIA (Nasdaq: NVDA  ) and Qualcomm are tying up with Microsoft in a bid to promote the development of games and apps that fully utilize their chipsets running the Windows platform. Qualcomm recently announced that it would start a developer-seeding program in collaboration with Microsoft and provide PCs to a few developers to test and optimize apps for its soon-to-be released Snapdragon S4 chip-based PCs and tablets. NVIDIA also announced its own developer program in conjunction with Microsoft that would encourage development of apps for Windows-based devices running on its Tegra line of processors.

The real irony
Microsoft needs to beef up its app development process not only for itself, but for several other companies that hope to piggyback on its success.

Nokia has already shown its commitment to the Windows platform through its lineup of Lumia smartphones. The company now plans to introduce a 10-inch tablet running Windows 8 by the fourth quarter of this year.

PC maker Dell, which had a bad start with its Android-powered Streak line of tablets, now plans to launch Windows-based tablets sometime later this year. Others, such as Hewlett-Packard, which recently announced a merger of its PC and printing businesses, also intend to make up for declining PC sales by introducing Windows 8-based tablets.

Looking through the window
The onus is clearly now on Microsoft, as the success of all these devices largely depends upon how the Windows 8 platform fares in the long run. And it's high time Microsoft delivered a great operating system -- especially one that can support many high-quality apps. The company seems to have lost a lot of credibility in the market. With the sole exception of the Xbox line of products, the company has seen a streak of fantastic flops: The Zune player has been a laughable disaster, and Microsoft has even lost its dominance in the browser segment to industry peer Google. The Windows 8 launch may be its last shot at success.

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Fool contributor Keki Fatakia does not hold shares in any of the companies mentioned in this article. The Motley Fool owns shares of Google, Qualcomm, Microsoft, and Apple. Motley Fool newsletter services have recommended buying shares of Nokia, NVIDIA, Microsoft, Apple, and Google. Motley Fool newsletter services have recommended writing covered calls on Dell and writing puts on NVIDIA, as well as creating a bull call spread positions in Microsoft and Apple. 

The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.


Read/Post Comments (4) | Recommend This Article (4)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On April 10, 2012, at 10:28 AM, rav55 wrote:

    What Microsoft needs to do is offer incentives for the next few months that pay 100% of the retail price of the app to the developer. Make this time sensitive and see what happens.

  • Report this Comment On April 10, 2012, at 10:41 AM, applefan1 wrote:

    It sounds as though Android is the new Windows. Boy, are those Windows users in trouble. I think that is why plenty of Windows users are jumping ship and going with Mac. I think Microsoft has spread themselves too thin and they have been spending time trying to figure out what Apple figured out years ago. Android is just trying to copy Apple as much as they can, but have a difficult time with their users adopting the later revision OS they introduce. I think people are finding the inherent problems with the "I don't design both the hardware and OS" mentality. Not having both the hardware and OS development slows down the innovation process since one has to rely on other business partners.

  • Report this Comment On April 10, 2012, at 12:12 PM, deasystems wrote:

    The article stated that "... Apple's app store and Google Play boast more than half a million offerings."

    That is grossly inaccurate. Apple's App Store offers apps nearing *twice* as many as Google Play. According to google itself, Google Play currently has 450,000 applications available -- see play DOT google DOT com SLASH about SLASH features vs. 770,000 at Apple's App Store -- see 148apps DOT biz.

  • Report this Comment On April 10, 2012, at 12:49 PM, techy46 wrote:

    Microsoft's last ditch Effort? Microsoft's Windows phone-operating system hasn't been a very hot commodity for app developers of late, thanks to a notable shift toward the proprietary platforms of industry rivals Apple and Google.

    Ok, what's a proprietary platform? Last ditch? Apps are nothing but games and social toys. The mobile bubble will burst and Windows 8 devices will be $200 without carrier subsidies. Where's that going to leave Apple and Google?

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