Windows Phone

Windows Phone 7's disappointing app sales reality

Windows Phone 7 developers got an unexpected present from Microsoft: early payouts and immediate access to downloads and sales data. Justin James takes a look at the numbers for his WP7 apps.

Windows Phone 7 developers got an unexpected present from Microsoft this holiday season: early payouts (bumped up to January from February) and immediate access to downloads and sales data (originally slated for February as well). I don't know why Microsoft had a sudden change of heart, but I do know that there was a widely circulated and quoted, copied, and imitated article about how hard it was to make development decisions regarding the server-side end of Windows Phone 7 apps without this data. The timing of the change in course for Microsoft and the publication of that article (November 29, 2010) is curious indeed.

Before this information was released, developers were really frustrated because they knew the data existed. Bing's Visual Search was showing the "download popularity" of apps for a short period of time (incidentally, I think that the ranking weights recent downloads much more than past downloads), and developers were finding other ways to get the data (such as pinging a Web service when an app was run for the first time or purchased).

A look at the numbers

From my perspective, the numbers are positively abysmal. I am not going to comment on how these numbers may indicate potential handset sales because I don't know nearly enough about the correlation between the number of handsets sold and the actual sales numbers on other platforms to make any guesses. I have said that Windows Phone 7 development should be thought of as a hobby or a learning experience rather than a business model, and I was spot on. Let's look at the data for my Windows Phone 7 apps to see what I mean.

My first Windows Phone 7 app was the free Airport Status Checker. It's hardly a unique app, and it's limited in scope. Incidentally, the app has a poor user rating (one-and-a-half stars from three reviewers, last I checked), but since a good number of the downloaders are outside the United States, and it only works for U.S. airports, I suspect that is the source of the poor ratings. At one point, Bing Visual Search showed it as #272 in the rankings, but it has been slowly slipping. A friend reports that his apps are slowly slipping, as is my other app that has been out a while, which is why I believe that recent downloads are more important in the rankings. All the same, it is still at the bottom of the top 10% of applications on the platform, which isn't too shabby.

Airport Status Checker had just over 900 downloads in a month, but let's put this into perspective. Every now and then, I post source code that accompanies one of my TechRepublic articles to my company's Web site, and those packages get over 900 downloads in several days, so 900 downloads does not impress me. That's the number of downloads that some obscure, niche piece of shareware can get on one of the major shareware/freeware/trialware sites. Of course, the phone market is much, much smaller. At the same time, the Windows Phone 7 App Hub is too. It isn't the saturated market that the Apple App Store and the Android Marketplace are. You can write a throwaway app like Airport Status Checker, and it will still stand out a little (it didn't help that I used a public domain icon that a number of other apps used too).

But what do the numbers on a paid application look like? My Local Crime Rate application has been ranked at the top of the bottom 50% for a while, coming out around #1,700 and sliding down to around #2,000. It has been out nearly a month. It is priced at 99 cents, and does not have a free trial. It has a whopping seven downloads. Assuming the pace of sales holds steady, accounting for Microsoft taking 30% of revenues and holding checks until you've earned $200 in payouts, it would take me over 288 months to see my first $200 check from Local Crime Rate. And that is an app that is not doing too poorly in the overall rankings. That tells me that apps in the bottom 50% are looking at 10 downloads per month, or less.

My third application, Name That Nerd, provides some additional clues. After about a week in the market, it is rated #2,006 (out of 3,000 listed). It has 24 downloads and 1 sale. Extrapolating a little bit more, that's 100 downloads a month and 4 sales (at 99 cents each). I can understand the low sales numbers -- it's a quiz application, and I simply did not put many entries into the quiz database (I was in a hurry to get it approved so I could enter a contest). I take full credit for the sales numbers.

The top apps are pretty high-quality, for the most part. Kudos to the folks who put forth the time and effort to making something good. (There are reports that Microsoft has been slipping payments to developers to port apps or develop apps for Windows Phone 7.) That said, my Airport Status Checker app shows that you can be in the top 10% (which isn't a bad place to be) and not be moving many units. If it was a paid app, even with a 20% conversion rate (which is phenomenal), that would be under $200 in sales because Microsoft took its percentage. While $200 in sales is a good number for an application that required this level of effort, it is abysmal for anything that I would have spent much time and effort on.

Conclusion

My advice still stands for the time being: do not develop applications for Windows Phone 7 with the expectation that you will make big bucks. Does this mean that there is no opportunity in the Windows Phone 7 App Hub to make money? Not at all. I think that the market is wide open for apps.

Games and entertainment dominate the top apps, but outside the top tier, the apps look pretty run-of-the mill, with a lot of unit converters, flashlights, and dice rolling applications. The applications are mostly uninteresting right now. I think that the folks who can fulfill basic, mass market need (say, an outstanding Twitter or Facebook application for 99 cents), put together a polished game, or create a must have business application will be on to something. I am sure that there is a logarithmic rise in download rates in the top 100 as well.

So, if you have an app that you think can get into the top 100, or it will be something with staying power and earn enough per month to make you happy, by all means, go for it. But if your plan is to count on the sheer number of downloads to carry a niche or less than stellar product into profitability, you are mistaken. Windows Phone 7 just does not have the number of handsets out there for a "throw mud to the wall and see what sticks" strategy to get a great success unless you have a way of cranking out mud at a rapid pace.

J.Ja

Disclosure of Justin's industry affiliations: Justin James has a contract with Spiceworks to write product buying guides; he has a contract with OpenAmplify, which is owned by Hapax, to write a series of blogs, tutorials, and articles; and he has a contract with OutSystems to write articles, sample code, etc.

About

Justin James is the Lead Architect for Conigent.

13 comments
Greg.Bray
Greg.Bray

So far I have seen similar numbers for an app that I released about a week and a half ago. I've been tracking hits to the http://www.phrasememe.com website and the demo video on Youtube ( http://youtu.be/6T_v4x9JtLQ ) and there seems to be around 250-350 downloads so far (IE: clicks on the zune download link). The App Hub reports are a week delayed, so it only shows around 200 official downloads but stops reporting after the 16th. On the 19th it was listed as #779 out of the top 3000, so it only takes a few hundred downloads to get you into the top 25% right now. I think having a trial mode helps a lot, as out of the 200 downloads there were only a dozen or so purchases. My app is pretty generous on the trial (nagware basically) so I don't know if that ratio will increase much or not, but there are always other ways to monetize a high traffic application. My goal right now is actually to break into the top 10% of apps, but we'll see if that is in the cards or not.

dwdino
dwdino

I think a large problem is the perception of the clientele. Your article hits the nail on the head and think the nail is at fault, rather than the hammer. By your own admission, your applicaiton is limited and a pet project with limited funtionality. Add that to an application delivery system and product that has been available for ~30 days and your analysis becomes moot. I deal with mobile device users every day. iPhones, Droids, WM6 - we have them all and I am exposed to their commonalities and uniqueness every day. One thing I have noticed is that most of those anxious for WM7 are diametrically opposed to AT&T and T-Mobile. So, until Verizon and Sprint carry WM7 devices, they will sit it out. Secondly, most of those waiting on WM7 are more function concerned. They want extreme integration with Exchange, Office, and Sharepoint. Citrix is also high on the list. They see no need for 95% of "apps" and view their devices as tools instead of entertainment. I therefore postulate that the user base for WM7 is quite different from the iPhone and Droid. If you seek to develop apps for these users, they had better be professional, integrated, and reliable. Trivial entertainment and niche solutions will most likely be ignored.

smithkl42
smithkl42

MS made the right call in releasing numbers. They need folks to know that they're in this for the long haul, so their attitude needs to be, "We know that the numbers suck, we expected them to suck, this doesn't scare us. But we're going to do and spend whatever it takes to make them not suck, even if it takes five years."

gak
gak

I cannot understand why you have "disappointing" in the title. The text suggests that Windows 7 market is healthy and growing, so if an app is good, it will be sold just fine. If people do not buy junk vigorously, isn't it normal? If you had created a similar level app for iPhone and had got much better sales, that would explain the attitude, but you do not write about that.

yobtaf
yobtaf

That Microsoft decided to design and market their phone to a different audience. My take is that you are't the targeted market. I thought it's for people who are less tech savvy and want a simpler interface. At least that how their advertising it.

Justin James
Justin James

"By your own admission, your applicaiton is limited and a pet project with limited funtionality. Add that to an application delivery system and product that has been available for ~30 days and your analysis becomes moot." What you *can* safely extrapolate is a translation of download ranking to number of downloads. The bottom numbers are less interesting, what is interesting is that a top 10% app has less than 1,000 downloads. That means that until the number of handsets really grows, you need to be in the top 10 or top 50 to make real money. So the question people need to ask themselves is, "do I roll the dice on a platform without the install base?" "I therefore postulate that the user base for WM7 is quite different from the iPhone and Droid. If you seek to develop apps for these users, they had better be professional, integrated, and reliable. Trivial entertainment and niche solutions will most likely be ignored." This is what's really intrigued me. I agree 100% with your assessment here. The people looking at WP7 seriously are folks who want certain things: * The ability to easily write code for the phone (WP7 really does have the best dev story right now, despite its limitations), using well known Microsoft technologies * Better integration to the Microsoft stack than competitors * A UI that, while being aesthetically debatable, unarguably requires significantly few gestures to get things done All of these appeal to enterprises and geeks. But... Microsoft's strategy on this has been to chase "consumers". Thus, the focus on games, the XNA stuff, lack of certain "power user" features up front (tethering, many APIs useful to enterprise development like an embedded DB, etc. etc. etc.). I always thought this was a bad strategy. Why chase the same market as iPhone and Android? Why not push BlackBerry out like Windows Mobile did to Palm? J.Ja

Justin James
Justin James

People were calling them out, because Bing's Visual Search rankings made it clear that they had the numbers put together, and it left a very bad impression like they were trying to hide something. Everyone knows that WP7 phones aren't selling at an iPhone rate, so why give people reason to think that there is some cover up happening? J.Ja

Justin James
Justin James

It's a simple thing, really: why are apps in the Top 10% seeing less than 1,000 downloads in a month? That's not encouraging. If your plan is to make money, that's not a good way to do it. J.Ja

kmr214
kmr214

"Why chase the same market as iPhone and Android? Why not push BlackBerry out like Windows Mobile did to Palm?" Surely they are doing both. It's just the logical order. Part of the answer is time. To make a new phone OS with the enterprise class (security, application integration, group policy ...) features would take longer than the consumer device. To delay entering the market *at all* for another year would surely be harmful. Plus, they cannot ignore the consumer market, or they end up where WM6 is ... trapped on Symbol devices! With more and more phone users moving to smartphones in general and to Android and iPhone in particular, they need to jump into that game and capture some mindshare. Last time around, businesses led with WM and Blackberry devices defining "smartphone." This time, users, if not leading, are at least influential enough to share the driving. If users want iphones and droids, these platforms will get the enterprise features and IT will adopt them. If WP7 is even a minor "hit" with consumers, being assigned one from your corporate IT will be more palatable. Given the givens, leading with a grab at the consumer pie was the best way to go. By the end of 2011, WP7 can be the best phone OS out there for both consumer and enterprise if MSFT execute it right.

Hazydave
Hazydave

W7P is clearly being targeted at consumers... this is not the WP6 upgrade, at least not yet. Its the Zune Phone... it is precisely to the Zune what the iPhone is to the iPod. Problem here is that the Zune, particularly the ZuneHD, while a sweet PMP, never did all that well. And while Apple used the iPod to ssell the iPhone at first, W7P doesn't ssem to use any existing hooks to bring in the consumers. They're selling it as a smartphone for people who basically don't like smartphones. Does that ever work? And the WP6 people are not going to be happy with it yet... i doubt a move to Verizon really helps here. MS needs a better sell on what this actually is, and why a regular smartphone fan would want one.

dwdino
dwdino

Excellent reply with many strong points. I perceive we may end up with something similar to Microsoft's desktop strategy to really succeed. I would love to see a WP7-Pro and WP7-Home. The WP7-Pro would be the new mixed with the old so you could have local DBs, file managers, etc. - a more computing like device. The WP7-Home would be the iPhone competitor with simple streamlined functionality without the burden of corporate security or tools. I can suggest a few apps to supplant missing components of WP7 for the user base I speak of: 1) A file manager. This may be the primary concern I hear raised. 2) RDP client (may be already in the works. 3) RSAT tools 4) Chat - LCS or other (BB messenger like). 5) Expense tracker. Anyway, the Droid and iPhone have struggled crossing the line from consumer device to corporate tool because the two are opposed. Users desire freedom, simplicity, and what I call "shiny". Corporations require security, auditing, support efficiency, and ROI. You make an interesting note by interjecting Palm. What really killed Palm - their desire to forsake their user base and chase the iPhone. Through alienating their base which was accustomed to certain feature sets, Palm created solution vacuum. Microsoft needs to careful not to alienate those who are accustomed to certain features while developing competing solutions. The iPhone is a big mountain to climb, and will require many small advances. But that effort will be rendered fruitless if there is no based to launch from.

Hazydave
Hazydave

The platform is new, and users are just getting into it. And really, with Android and Apple competition, you can't expect the app-junkies to move to Windows 7 phone... its a tiny market, at least niw. You might put some blame on Microsoft's own marketing, too. Sure, they have slick and even funny ads, but they're also kind of selling W7P as a smartphone that just does things, built in.. no apps to fumble for. Soo they might well be attracting a different class of smartphone user. Not all Android or iPhone user buys many apps, but I bet its even lower for W7P owners. You may need a new ad campaign to fix this. Look at the very successful Verizon Droid ads -- they're all about the apps.

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