Nokia paying developers to build Windows Phone apps
San Francisco (CNN) — As Nokia prepares for its next crucial venture into the U.S. and high-end smartphones, the Finnish cell-phone maker is missing a crucial piece: an abundant catalog of applications.
Context & Ripple Effects
The payment scheme is the latest step in a year-long pivot that began when analysts asked whether Nokia would build Windows phones at all, followed by a developer preview of the high-end system in late 2010 and Bloomberg's report in March 2011 that Microsoft was said to be paying Nokia more than $1 billion under the accord.
Nokia has already tried goodwill instead of cash — handing developers a free E7 and a free WP7 device in February 2011. With its U.S. launch of high-end smartphones approaching and the app catalog still thin, the company is now moving from donated hardware to direct payment, effectively treating apps as a procurement problem rather than an organic one.
First-order effects
- Developers gain a paid channel into the Windows Phone catalog, lowering their risk of building for a third ecosystem whose U.S. demand is unproven.
- Nokia's U.S. launch window tightens around this spend: every week without an abundant catalog is a week the high-end handsets ship against iOS and Android with visible gaps.
Second-order effects
- Apple and Google face no equivalent need to pay for catalog depth, so Nokia's subsidies set a cost floor only the weakest ecosystems must pay — widening the gap between funded and self-sustaining platforms.
- Microsoft's economics shift too: the more Nokia spends on apps, the more the platform's success depends on continued subsidy rather than on Windows Phone's own pull, raising questions about who funds the catalog after launch.
Third-order effects
- If buying apps becomes standard practice for challenger platforms, the mobile OS market stratifies into ecosystems that attract developers organically and those that must rent them — a structural disadvantage money can narrow but not erase.
- Developer attention consolidates further around two default platforms, making any third ecosystem's catalog a policy question for regulators and partners watching how far subsidy-based competition goes.
The trend: Smartphone platform competition is shifting from hardware differentiation to paid developer acquisition, with cash-strapped-for-catalog challengers like Nokia subsidizing apps that iOS and Android attract for free.