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Microsoft has confirmed it is paying some third-party developers to create applications for its forthcoming Windows Phone 7 mobile devices.
However, industry watchers differ on how much it will help establish Windows Phone 7 as a serious challenger to the likes of Apple's (NASDAQ: AAPL) iPhone and the growing list of Android-powered devices.
The move is widely seen as another admission by Microsoft (NASDAQ: MSFT) that it needs to prime the pump for customers who have plenty of other smartphone options.
"We are investing heavily in the developer community by offering as many resources as we can to help them be successful on our platform," a Microsoft spokesperson said in an e-mail to InternetNews.com.
"Where it makes sense we do co-fund strategic projects on a limited basis," the spokesperson added.
Microsoft just this week began to distribute preview Windows Phone 7 devices to developers, and also began shipping the beta developer tools to make it easier to write apps and games for the company's new smartphone system.
The company hasn't yet given a date for when the first Windows Phone 7 devices will be available commercially, except to say they will ship in time for the holiday sales season.
Microsoft has said it will have a Windows Phone 7 marketplace similar to Apples, but it will have to go some to catch the App Store which currently boasts over 200,000 applications. Runner up Google has over 70,000 apps in its Google Apps Marketplace.
Wooing mobile developers is nothing new for Microsoft. Last year the company launched its Windows Marketplace for Mobile, which was set up to sell apps for its Windows Mobile phones, and even held a developers' camp last August to get developers enthused.
However, attendance at the developers' camp event was light, and some of the attendees turned out to be just curious Microsoft employees.
In the meantime, Microsoft has all but cut Windows Mobile -- its older phone OS -- loose, in order to focus on Windows Phone 7 apps. Its Marketplace for Mobile has not done well, given that neglect.
Today, Marketplace for Mobile only has a few hundred apps compared to thousands and thousands on the App Store. Also, it doesn't help developers that apps written for Windows Mobile phones will not run on Windows Phone 7 devices.
All of that notwithstanding, however, at least one analyst thinks Microsoft still has a chance to be a serious player in the growing apps marketplace.
"The smartphone market is still pretty young," Matt Rosoff, research vice president for consumer products and services at research firm Directions on Microsoft, told InternetNews.com.
Rosoff also pointed out that this isn't the first time that Microsoft has subsidized applications, particularly games for platforms like the original Xbox. But Apple, by contrast, doesn't have to subsidize developers for the popular iPhone and its biggest problem is deciding which apps to accept and finding ways to speed up the turnaround time it takes to make them live.
Microsoft's challenge, Rosoff added, is that "they have to get handset makers to design cool phones, get apps out, and services [deployed]."
He also said that the lack of forward compatibility for Windows Mobile apps can be seen as an advantage rather than a hindrance, given that there are so few apps for the older system anyway.
In that respect, Windows Phone 7 is a clean break with the past.
Not all analysts agree with the idea of a clean break, however. Microsoft's Windows Mobile had, at least until last year, done well in IT organizations.
"It's a hindrance if you're in an IT organization and you have to support a thousand Windows Mobile phones with apps [that aren't going anywhere]," Jack Gold, principal analyst at J. Gold Associates, told InternetNews.com.
If I were an IT director at this point, I'd have to go with Android," Gold added.
But Rosoff said notes Microsoft is only just gearing up and has plenty of cash on hand for further investment.
"I don't think that the game is over yet," he said.