Microsoft To Match Apple's Revenue Split In New App Store


imageMicrosoft (NSDQ: MSFT) today announced some new details about its upcoming Windows Marketplace for Mobile that put it pretty much line with its app-store competition. For instance, Microsoft said developers will receive 70 percent of the revenues from each application sold, which matches the splits offered by Apple (NSDQ: AAPL), Google (NSDQ: GOOG) and Nokia (NYSE: NOK). Microsoft also said that developers can price applications as free, or sell them, starting as low as 99 cents.

Developers will have to pay an annual registration fee of $99, which will allow them to submit up to five applications. Microsoft will also provide additional testing and marketing support for that fee. Each additional app will cost $99. For more information, developers can visit, but more details will be announced this summer once developers can start submitting applications. The store will be available later this year once the first Windows Mobile 6.5 phones start shipping.

More after the jump

More questions answered:

Is Microsoft sharing revenues with the carrier?: Microsoft said the 70-30 split will come directly from the sale of the application, meaning that Microsoft is not giving a portion to the carrier first. That could change. “We are considering a share of revenue with mobile operators, but are not sharing specifics are this time.”

Billing mechanisms: End-users will purchase applications using a credit card, which is similar to Nokia’s Ovi store, and is different than Apple, which uses iTunes; Google, which uses its own Checkout system; and RIM (NSDQ: RIMM), which uses PayPal. In addition, Microsoft said at this time it will not be supporting subscriptions, but only one-time purchases.

On advertising: Microsoft declined to talk about how advertising will work inside an application, including whether developers would be required to use its own ad network. “We are not discussing advertising requirements for applications at this time.”



Most WinMo phones are operator branded and as other posters said, there are a wide range of devices, so an MS branded store makes no sense. Maybe they can draw the line under Winmo 6.5, but either way their effort will be confusing and haphazard.

Also, Apple had a direct (and strong) relationship with the consumer paying for content with a credit card ( iTunes) when launching App store, what makes MS think that they can create this overnight? Fail.

Joe Anonymous

"Microsoft is much bigger than Apple and should be able to give developers a break such as 80/20."

I agree with your conclusion, but not the logic. The issue isn't size – who cares how big or small their distributor is? The issue is market dynamics.

Apple had a HOT phone that was in huge demand with pent-up demand for third party applications. People were lining up in droves to sign on. Under that scenario, Apple was in a position to take a significant chunk of revenues.

Microsoft has a product which is, let's say, unwanted. Market share is small and dropping and there's just no excitement about the product. Reviews are universally poor. To make matters worse, developing for the iPhone is relatively simple because there is only one basic design. There are zillions of WinMo handsets and developers have to add complexity to their apps to handle the range of options, so it's more expensive to develop for WinMo.

If Microsoft wants this product to be successful, they need to pull out all the stops and do everything in their power to get developers on board. Offering developers a larger piece of the pie should just be the start. They could, for example, tighten up their guidelines to eliminate the least functional handsets at the bottom of the heap so that developers don't have to cripple their apps to run on those handsets (not saying this is a good idea because I don't have any idea of how much they sell at each price point, but it's the kind of thing that needs to be considered). They most certainly are NOT in a position to keep 30%.

Bill Notgates

Didn't I read that WinMo runs on all different types of phones, with different screen sizes, different CPU capabilities, different features (GPS, WifFi, etc.) –in other words nothing like the almost total consistency of the iPhone/iPhone 3G/iPod Touch environment?

Will developers have to offer different versions of their software for each of the WinMo variants, or will the MicrApp store only be for the newest version of WinMo and the few phones that run it? If they offer 5 different versions for 5 different phone variants, will that use up their year's quota requiring that they pay extra for the 5 versions of their next App?

Just wondering.

Constable Odo

Why does Microsoft have to build the exact same model as Apple when it comes to selling apps? Microsoft is much bigger than Apple and should be able to give developers a break such as 80/20. Microsoft figures that there are going to be about 100 million WinMo devices floating around by 2012, so they should still be able to make a bundle of cash and in the process, pull more developers away from Apple.

Microsoft should continue with their philosophy of if you make it cheap enough, everyone will want it, so they should only charge $.79 for their cheapest apps. Apple only has a bit of a jump on Microsoft at selling apps and MS should do everything possible to pull people away from Apple. Imagine, MS has had the WinMo platform for about nine years and only now are they starting with selling apps and Ballmer thinks that Apple's iPhone platform is nothing to be concerned about. Insane.

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