Microsoft Wins Over Developers

Software programmers are gearing up to build applications for the newest version of Windows Phone 7; consumer demand has been tepid


Microsoft (MSFT) has delivered 1.5 million downloads of a tool kit to make applications for Windows Phone 7, a sign the operating system may be winning over developers even as it gains traction slowly with consumers.

About 36,000 developers have registered with the company, Microsoft said in a blog posting Mar. 31. A total of 11,500 apps are available and customers on average download 12 a month.

Microsoft needs to marshal developers' efforts to have a shot at retaking market share lost to Apple's (AAPL) iPhone and handsets running Google's (GOOG) Android software. Microsoft shipped 2 million Windows Phone 7 units last quarter, a number that analysts deemed disappointing. Delays in a software update beset the company this month, and developers and customers said Microsoft failed to provide enough details about the holdup.

"It's a long-term process to get more phones out there and it's also a long-term process to get out updates in a timely fashion, but the developer side is one of the bright spots for this platform," said Al Hilwa, an analyst at market research firm IDC. "They are obviously not at the same scale as Android or Apple iOS, but factoring for the maturity of the Windows Phone platform, they're doing well."

Apple has more than 350,000 apps available, and Android apps top 150,000. Microsoft's software could become the No. 2 mobile operating system behind Android in 2015, Framingham (Mass.)-based IDC predicted this week.

Developer Enthusiasm

Microsoft, based in Redmond, Wash., is adding 1,200 new registrations for Windows Phone developers a week, said Brandon Watson, the division's senior director of developer experience. Downloads of the tool kit also jumped last month after Microsoft announced an agreement that will put Windows Phone software in Nokia (NOK) handsets, he said in an interview. "It's a long game," Watson said. "We've got great momentum and a great story but we need to keep delivering. To count us out now, we tell people that they do that at their own folly."

To keep developers happy, Microsoft needs to make sure there are enough phones to boost the revenue that apps can bring in, Hilwa said. The Nokia deal gives them a "good shot" at doing that, said Sam Altman, chief executive officer of Loopt, whose app for locating friends is available for Windows Phone, Android, and Apple's iOS.

The Windows software, which features tiles on the main screen that update with new information, lets Altman's company do things it can't on rival operating systems. For example, Loopt users on Windows Phone can see whether a friend is nearby on that main-screen tile without having to open the application, he said. "We're excited about where the platform is going," he said. "The problem is you occasionally hear or see a blog post saying 'I made $1 million last week on the Android app store.' I haven't seen that for Windows yet."

Relationship in Progress

Watson acknowledged the delays and lack of information around the rollout of the Windows Phone update—which adds features such as the ability to copy and paste—upset some developers, who want more details on the software road map, he said. "To date we haven't done a great job," Watson said. "We are working like hell to make sure we are doing a better job."

Watson also reiterated that Microsoft will release a new version of the Windows Phone software later this year and that new phone models with the operating system will go on sale in 2011. Existing Windows Phone customers will be able to update their older phones with the new software, he said.

One feature in the works will let users buy merchandise with a flick of the handset at a checkout counter, two people familiar with the plans said this week. In January, Microsoft said it had shipped 2 million licenses to use Windows Phone 7 in handsets. Kevin Burden, an analyst at ABI Research, said at the time that number was less than he predicted.