Better Ad Performance Can Attract Developers to Windows Phone
It’s been more than a year since the launch of Microsoft’s (NASDAQ:MSFT) Windows Phone OS, but the platform hasn’t been able to again enough traction in terms of market share. However, on the advertising front, it seems to be doing pretty well. Recently, Smaato, a mobile advertising firm released performance numbers for mobile platforms for Q3 2011. [1] According to the results, Windows Phone is the best performing platform for advertising. It has the highest mobile click through rate (CTR), while Apple’s (NASDAQ:AAPL) iOS and Google’s
Xbox, Zune, Windows Phone and other devices account for nearly 8% of Microsoft’s $32 Trefis price estimate, which stands nearly 25% above its current market price.
Greater Ad Monetization Potential Makes Windows Phone Attractive to Developers
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Better advertising performance on the Windows Phone platform may help attract developers to the platform as advertising is one of the best ways for developers to monetize apps. This should lead to increased growth in the number of available apps for the platform, attracting more users to Windows Phone.
Smaato’s CEO said:
Developers are advised not to overlook the Nokia/Windows combination as it might be a platform that is easier to monetize, will have less threats of piracy as it will be a more closed ecosystem, and will also offer more cohesiveness. [2]
Currently, Windows Phone has nearly 40,000 apps and games while iOS boasts of around 500,000 and Android has around 300,000. Microsoft has been reasonably successful in attracting app developers to its platform- Windows Phone ranks behind only Android and iOS in terms of developer interest, despite having a much smaller market share.
Microsoft has recently been trying hard to increase Windows Phone’s share in the global smartphone OS market. It is pushing its partners to increase their marketing spend and bring down Windows Phone device prices to boost sales.
We don’t expect a change in revenue from Windows Phone to impact Microsoft’s stock in any significant manner, as it accounts for only a fraction of its value.
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