Mobile & Telecom

How Nokia Flexes Microsoft's Muscle to Lure Reluctant App Developers


How Nokia Flexes Microsoft's Muscle to Lure Reluctant App Developers

Photograph by Simon Dawson/Bloomberg

When Instagram announced last week that its app would be available for Windows Phones, it plugged the most gaping hole in Microsoft’s mobile platform. Considering the company is acquiring Nokia’s devices business, which has made a point of packing ridiculously good cameras into smartphones, not having the world’s most prominent photography app was just embarrassing.

Microsoft (MSFT) and Nokia (NOK) say they’re getting much closer to erasing the shortcomings in the Windows app store. Still, plenty of developers need to be persuaded to build apps for the sparsely populated platform, and the two companies will be employing some interesting persuasive tactics. Bryan Biniak, Nokia’s global vice president and general manager, said in an interview that the pitch will include a simple massage: Those who decline to build apps for Windows could loses valuable business from Microsoft and Nokia.

Microsoft has about 100,000 employees worldwide, and 32,000 Nokia employees will join the company when the acquisition is official. That represents a lot of airline flights and hotel reservations, says Biniak, and he sees the weak crop of travel apps in the Windows app store as a logical place for improvement. “If our employees bank with you, if the company banks with you, if we travel with you, if we stay in your hotels, if we do all these things, you should have an application in our store,” he says. “We have some muscle here. Let’s start flexing our muscle.”

In addition to spending on its employees, Microsoft pours hundreds of millions of dollars into marketing each year. Biniak also wants to predicate some of that spending on companies building versions of their apps for Windows smartphones.

The desperate measures are a reflection of desperate times. Developers haven’t exactly flocked to the Windows mobile software, largely because Android and iOS dominate the market for smartphones. Windows and Nokia continue to increase their share—Nokia sold 8.8 million Lumia smartphones last quarter, up almost 20 percent from the quarter before—but they are still a distant third. Only 3.7 percent of smartphones shipped in the second quarter of this year ran Windows software, according to IDC.

As it attempts to overcome this deficit, Microsoft offers carrots, too. The company has said it will pay for apps or just build them for developers. But Biniak concedes that the begging and bullying of developers will do no better than get the Windows app store on equal footing with its larger competitors. “Those are apps that already exist, and they exist on someone else’s devices,” he says. “You’re inherently a follower.”

To distinguish itself, says Biniak, Windows needs to start locking in some of its own exclusives. For this he’s pitching developers on Microsoft’s ability to offer not only smartphones but also access to the Xbox platform and personal computers. Developers have access to Nokia’s mapping and music services, too, and Biniak holds out the promise of preinstalling apps onto devices, which he says can lead to activation rates as high as 86 percent.

Nokia is starting to see some fruits from this labor. Last week, Dreamworks (DWA) launched Dragons Adventure, an app, available only on Nokia’s new tablet, that uses data from its location service, HERE, to put references to a gamers’ immediate surroundings directly into the game.

This isn’t an easy lift, but Biniak thinks that the increasing uptick in Nokia sales is a sign it’s headed in the right direction. He claims, optimistically, that the size of the company’s user base is no longer a problem, in part because Windows users spend more on apps than Android users. Besides, he wants to focus on the technical advantages to his company’s phones.

Take Instagram, that laggard which can now be paired with the superior cameras in Nokia’s latest phones. “Ultimately we’re trying to get to the point where we have a halo around our devices,” he says. “Yes, Instagram is on iOS; yes, it’s on Android; yes, it’s on Lumia. But it’s better on Lumia.”

Brustein is a writer for Businessweek.com in New York.

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Companies Mentioned

  • MSFT
    (Microsoft Corp)
    • $46.52 USD
    • -0.24
    • -0.52%
  • NOK
    (Nokia OYJ)
    • $8.54 USD
    • -0.03
    • -0.35%
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