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Sunday, August 31, 2008, 10:00 pm PT (01:00 am ET)

Microsoft plans 'Skymarket' apps store for Windows Mobile 7 in 2009

Following in the footsteps of US mobile provider T-Mobile and Google's own Android smartphone platform, Microsoft is now plotting its own effort to create an online store for mobile software in the model of Apple's iPhone App Store.

The project, tentatively called "Skymarket," was revealed in a job listing Microsoft posted earlier today at computerjobs.com for a Senior Product Manager to oversee a marketplace service for Windows Mobile.

According to the job listing, Microsoft doesn't plan to commercially launch Skymarket until the release of Windows Mobile 7, slated for late 2009. However, the company does hope to find someone who can handle "driving the cross group collaboration for the initial launch of the marketplace offering to the developer community this fall."

'Competitive spirit' required to monetize

The posting also indicates Microsoft hasn't made much progress so far about its conceptual goals for the store. It calls for an applicant who can assume responsibilities for "definition of the product offering, pricing, business model and policies that will make the Windows Mobile marketplace 'the place to be' for developers wishing to distribute and monetize their Windows Mobile applications."

It also demands "responsibility for the business model and key elements that will drive the optimal experience for developers and monetization of the service by Microsoft" and the ability to "define and mange the consumer, developer and mobile operator value proposition and supporting materials for use by PR, MCB's [Microsoft's Mobile Communication Business] developer outreach organization, and other teams across Microsoft."

The listing also cites "working with multiple stakeholders (product team, product planning, developer outreach, business operations, legal and more) in definition on the process, policies and terms of use through which developers and consumers take part in the marketplace," as a key responsibility, along with the ability to "work closely with product planning on prioritization of consumer, developer, and mobile operator scenarios."

The product manager position is also tasked with "management of KPI's [Key Performance Indicators] for the service post launch." KPI is used to define metrics for setting and reaching organizational goals within the world of corporate middle managers and committees. Among other qualifications, the position also requires a "competitive spirit" and "demonstrated success in starting, building and driving new business."

A half decade of Windows Mobile

Microsoft's Windows Mobile was unveiled as a conceptual project in 2000 as a way to move the company's underlying Windows CE operating system from the dying world of handheld PCs and PDAs into the emerging market for smartphones.

The effort followed the promising success of Handspring's 1999 Visor, which licensed the Palm Pilot operating system to deliver a PDA with an expansion slot that allowed the device to be used as a mobile phone with the appropriate Springboard module. The device turned into the Treo, and its success resulted in Handspring merging back into Palm itself and converting Palm from a PDA vendor into a smartphone company.

Microsoft delivered its first WinCE-based support for phones with Pocket PC Phone Edition in 2002, followed by a release the next year branded as Windows Mobile 2003 (WinCE 4.0). In 2005, Microsoft released Windows Mobile 5.0 (WinCE 5.0) and began a partnership with Palm that replaced the Palm OS with Windows Mobile on certain Treo models noted with "w," a move that nearly doubled the market share of Windows Mobile among smartphones at the expense of the Palm OS.

In February 2007, just weeks after the announcement of the iPhone, Microsoft released Windows Mobile 6 (WinCE 5.2). The company has released one update since, branded Windows Mobile 6.1. Despite the expansion of Windows Mobile across Palm's Treo models, Microsoft's share of the worldwide smartphone market has fallen from 23% in Q1 2004, to 18% in Q1 2005, and down to 12% in Q1 2006 where it remained in its Q4 2007 figures according to Canalys.

Microsoft's slide is due in part to the advance of US market leader RIM and its popular BlackBerry, as well as the iPhone. Apple grabbed a 7% share of the worldwide market in Q4 2007, over half that of Microsoft's global Windows Mobile partners put together, although Apple's sales only represented one market, one model, and one mobile provider, after only having been on the market for six months.

The race to sell mobile software

The rapid success of the iPhone and its even faster expansion worldwide with the launch of the iPhone 3G have been matched only by the explosion of interest in Apple's iPhone App Store, which reported 60 million downloads and revenues of $30 million in its first month. T-Mobile announced plans to open its own store for the various different phones on its network, and Google recently announced its own outline for Android Market, intended to distribute software in the model of YouTube.

Apple executives have stated that the goal of the Apps Store was to add value to the iPhone rather than bring in big profits. Google's plans describe a similar intent to foster interest in Android development; it has not yet released any details on how it might being handling paid transactions.

A Microsoft-run mobile software store designed to "monetize" mobile software for the company would compete against the company's existing partners, including Handango, a site Microsoft currently recommends to interested developers. Handango takes a cut from between 40% and 70% of mobile developer's revenues.

Microsoft has already established a store for selling games called the Xbox Live Marketplace, as well as a separate store for music called the Zune Marketplace. Microsoft also acquired a mobile software subscription service in its purchase of Danger, the maker of the TMobile Sidekick.

The company's inability to make any money in its consumer-oriented products division has caused some of the company's investors to demand that Microsoft spin off its Windows Mobile business along with the Xbox and Zune and focus on PC operating systems and software.