To close the gap in the number of apps available for Windows Phone versus the competition, Microsoft will spend $10 million to punish app makers such as Pandora who aren't developing Windows Phone apps, while while spurring Windows Phone app development with tens of millions of dollars in new funding.
Mary-Jo Foley reports that she has slides from the "U.S. marketing playbook" for Windows Phone apps, and the slide titled "Bridge Gaps in Top Apps" has this bulleted item:
"Ring-fence $10M marketing investment over 3 years to promote competitors of apps developers who won't built in WP (e.g. Pandora)"
There's no word about which app makers will get that money. But Spotify, which competes with Pandora, must have been happy to see that slide, given that there's a Windows Phone 7 Spotify app.
Punishing app makers who won't develop for Windows Phone is the stick. The carrot is the $24 million that Microsoft and Nokia will be spending to promote the development of Windows Phone apps. That money will go into a new app development program called AppCampus, located in Helsinki's Aalto University. Part of the money will also be used to spur development for Nokia's Symbian and Series 40 platforms.
Will the stick and the carrot significantly close the gap in app development between Windows Phone and Android and iOS? Not likely. Reuters reports that the Windows Marketplace for Windows Phone 7 has approximately 65,000 apps, versus 500,000 for Android and iOS. More disturbing still is Reuters citing an IDC/Appcelerator survey saying only 37 percent of app makers are interested in developing for Windows Phone, compared to 89 percent interested in iPhone development and 79 percent interested in Android development. That 37 percent figure is less than in a previous survey.
Given that, the $34 million to be spent over three years isn't nearly enough to close the gap in app development. Microsoft recognizes that, because in the presentation that Foley found, Microsoft said it was going to focus marketing on stressing that Windows Phone apps are of a higher quality than Android apps. That's a pitch that people might or might believe.
It's clear, though, that unless Microsoft can do something about how far ahead Android and iOS are in app availability, Windows Phone won't be a serious competitor to either platform. It's this simple: Apps drive smartphone sales. So expect Microsoft to do more than just spend this $34 million to drive app development.