Microsoft, who just recently announced its first quarterly loss ever, has a lot of catching up to do when it comes to competing in the application marketplace. Apple has been leading the way in online content distribution, bringing what seems to be closing in on a million applications to users around the world. Followed closely behind is Google’s Play store, which despite its surges, hasn’t yet caught the Cupertino tech giant.

Microsoft, as you may have realized by the first paragraph, isn’t even close to catching up yet. They’re basically out of the game entirely with their Windows Phone 7 devices, and the apps available to them. The popularity of the phones just isn’t there. At least, not yet. However… things may be looking up for Microsoft in the near future, as they have announced their plans to once again enter an existing market to compete with virtually identical products to cut into the big player profits. They’re opening their own app store for Windows 8.

Apple debuted their Mac App Store not too long ago, with the release of Mac OS X 10.6.8. Since then, more app stores for the personal computer platform have been making their way onto the web, and Microsoft’s new addition is looking to do what their competition hasn’t been quite able to do yet: They’re totally merging their computer and mobile markets in one store. The Windows 8 Store.

With this move, Microsoft brings a plethora of incentives which it hopes will be attractive enough to get users to consider buying their phones, and Windows 8. Features such as 7-day trials for paid applications, a try-before-you-buy system that application developers can optionally provide to their customers.

Speaking of developers, Microsoft is attempting to make the process of distributing software for their platform much more attractive, with a bit of a tax cut (if you will). Microsoft’s cut of the sales is the same as Apple’s, coming in at 30%. That means the developers keep 70% of the money generated from the sales of their apps in the store. However, once a developer reaches $25,000 in sales, Microsoft offers 80% to their developers, slashing its own cut to 20% (lower than any other software distribution market on the internet). This will create, Microsoft hopes, an added incentive for developers to work hard to make high-quality applications for their platform, so they don’t get stuck with a load of junk all over the place.

In addition to commission of app sales, Developers are also given several other options to monetize their work, as exclaimed from the MSDN Blog:

 …as a developer you have a variety of options in deciding how you want to monetize your app, content and services. Let’s look at a couple of the different models you can choose:

  • Trial with easy conversion to the full paid version of your app
  • In app purchases to allow monetization over time
  • Advertising within your app
  • Billing through your own existing mechanisms

There is a slight downside on this market though. Microsoft has actually decided to set a higher minimum price tag for paid applications on their market. Instead of the $0.99 pricing that iOS developers can use not the App Store, the Windows 8 Store will have a price floor at $1.49, a 50% mark-up from other platforms.

The question that remains to be answered however, is whether people will start to embrace Windows Phone 7 (and then 8) more than they are currently. So far, the platform is picking up steam, but at a far slower rate then their competition. Hopefully, with this new marketplace being brought onto the scene, the competition will grow enough to benefit everyone, especially consumers. Stay tuned for more developments as they come.

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