The added tax of developing for Windows Phone 7

By on August 15, 2011
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Developers in the Middle East pay an extra 20%.

It’s safe to say that Windows Phone 7 hasn’t really taken off in the Middle East just yet. In fact, outside Microsoft, I have yet to meet one person carrying a Samrtphone that is powered by Windows Phone 7 even though you have multiple handsets available from top tier manufacturers such as HTC and Samsung . That might change by the end of the year as Microsoft rolls out the “Mango” update and Nokia starts shipping their handsets equipped with Windows Phone 7. However, there is a situation that desperately needs fixing before Windows Phone 7 devices become popular in the region.

Like it or not, it’s all about the Apps at the moment and platform providers such as Apple, RIM and Google try their best to lure developers into their eco system. Apple streamlined the process of connecting developers to a mass audience through their App Store by charging a flat fee of 30% with which developers felt comfortable. Google followed and so did RIM. Microsoft also does that for Windows Phone 7 developers in other parts of the world but not the Middle East.

The reason for that is that Microsoft’s official “App Hub” is not available in the Middle East. App Hub is the platform that developers submit their applications to for reviewing and then for being published on “Market Place” which is the equivalent of AppStore by Apple or AppWorld by RIM. Now App Hub not being available in the Middle East isn’t really surprising as platform developers usually need time to put an eco system in place. For example, RIM launched their AppWorld in the Middle East just a couple of months back even though it was available in other parts of the world over a year back. Google has yet to make paid apps available in Google Market for the region.

To kickstart things in region where App Hub is not available, Microsoft usually works through their Global Publisher program. They appoint a partner that, in turn, accepts applications from developers and publishes them on Market Place for a fee. That fee varies from partner to partner. Here in the Middle East, the preferred partner is Yalla Apps and they charge developers an additional 20% over the 30% that Microsoft charges. Is this additional fee justified? Here is what Microsoft’s Director for Mobility in Middle East and Africa, Mr. Gustavo Fuchs had to say:

“It was a difficult choice as we have anticipated some positive and negative feedback from developers but our intention was to make a service available to developers while AppHub is not available. A great example of such transition has just happened in South Africa where AppHub just became available a few days ago and Yalla Apps subscribers have received a FREE migration of their account and Apps. For Gulf countries we are working very hard to make AppHub available and although I don’t have a date to share at this point I hope I can communicate that soon.
In regards to the 20% we are working very closely with Yalla to identify the best model in order for them to maintain the service and cover their costs. We are currently reviewing the 20% fee and hopefully we will come with a more comprehensive model that allows different developers to benefit from the success of their apps.”

I spoke to a few developers from the region as well and what they thought of about paying the additional 20% just to have a way of publishing their Apps until App Hub was officially made available to the region. Saleh Esmaeili, Founder/UX designer for dots & lines, disagrees with the extra 20% philosophy and had this to say:

“Now that we have a beta (of our app) out in the wild, it is even a hotter topic for us to think of 20% of our app revenue to go to Yalla Apps. We honestly don’t see where the value is or what we’re paying for. Every developer would gladly give out the standard 30% of the revenue share to Microsoft as they maintain the platform, market it and enable all of us developers around the world to build apps. But a bottleneck that adds nearly no value to the chain while absorbing yet another 20% of the revenue from Middle Eastern developers? That’s some math that I can’t do.”

David Ashford, General Manager at AppsArabia, the twofour54 investment fund that supports budding app entrepreneurs and developers from the MENA region, wants to see incentives rather than hurdles.

“Considering that Microsoft is just launching Windows Phone 7, and they want to attract people to develop apps for their platform, I think they should keep the publisher’s share at 70% to compete with Android, Apple, Nokia and RIM. I understand that Yalla Apps is a business that is facilitating publishing Apps by local developers until Microsoft launches their AppHub program directly, but it shouldn’t be the the entrepreneur who is absorbing costs for that.”

When I presented that argument to Gustavo, here is what he had to say:

“Its not about penalizing developers, it is the opposite actually. The options we had was to either to leave Developers across MEA without the option to submit Apps until AppHub becomes available or create a program that allow our Partners to provide this service to Developers. We decided to give an option to developers.”

It’s certainly a tricky situation- especially for developers. Would one rather not have an app on Windows Phone 7 altogether or swallow an additional 20% from their cut. I think many would chose the former especially since Windows Phone 7 hasn’t really taken off in the Middle East.

The ideal solution would be for Microsoft to make App Hub available in the Middle East though I’m not sure how soon that will be considering they have yet to make XBox Live available to region even though the Xbox 360 was officially released here over two years back. Here is what Gustavo had to say about that:

“We look into different factors that include market size, potential, regulations and local laws. The important factor I want to highlight here is that when we launch something we launch it right in a way that complies with all local laws and provide the best experience to users. No dates or time frame at this point but as soon we are able to circulate that we will communicate.”

What I do find a bit surprising is that App Hub is available to much smaller markets such as Chile and Colombia. Middle East as a whole should be a priority for Microsoft, especially if they want Windows Phone 7 to succeed. Sadly, the lack of native Arabic support on Windows Phone 7, even with the upcoming Mango version makes me think its not. Or at least not yet.


Abbas Jaffar Ali is the founder of and a blogger, geek and self-declared tech pundit who can't stop talking about technology. Find him on twitter as @ajaffarali

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