12/28/12

Reflecting on 2012: scale and opportunity


As the year draws to a close, I can’t help but reflect on what we’ve accomplished together in 2012. Our big goal this year was to establish a new, scalable platform on the phone and in the cloud upon which we can better achieve our mission: to provide a confident, convenient and customized app experience for our customers across the world, and enable developers to rapidly innovate and realize opportunity.

We literally set a new foundation this year with the deployment of all-new infrastructure – new client platform, new developer toolset, new Dev Center, new catalog infrastructure, and all-new global service. I know transitions can be frustrating, but it is now complete and customers and developers are already beginning to reap the benefits with a better app and store experience, faster performance and more robust tools.

Focus on customer experience

As a direct result of our investments, Windows Phone customers now download, buy, and use more apps than at any time since we first launched Windows Phone 7 two years ago. On average Windows Phone users have downloaded 54 apps each to personalize their phone experience around the people and information they care about most.  This high and growing level of customer engagement reflects our focus on 3 key customer promises:

Confidence. Establish high confidence level in the store and the apps it offers.  Confidence is built by testing and certifying every app and game to help protect customers from malware and viruses.  Over the last year we’ve certified and published over 75,000 new apps and games (more than doubling the catalog size) and over 300,000 app updates. In addition, this year we added the capability for customers to tell us if they have a concern about an app.
Convenience. Make app discovery and purchase convenient.  Over the last year we’ve made a lot of discovery enhancements including Bing-powered search and smart lists, as well as new collections and recommendations for Windows Phone 8 customers.  We’ve also made the purchase experience easier than ever by expanding payment options to include PayPal and Alipay, and doubling the number of carrier billing connections.
Customization. Enable users to create their own app experience. Live Apps are an example of this, surfacing information from the app right on the Start screen.  Based on customer feedback, 85% of Windows Phone 8 users indicate they would choose Live Apps over those without. It’s our job to empower you with the tools and APIs to build these unique experiences.
Create opportunity for developers

The release of the new developer platform for Windows Phone 8 and its shared core with Windows 8 significantly expands the opportunity for innovation, customer reach and monetization for developers across the globe. Even though Windows Phone 8 just started shipping in the last 7 weeks and most developers are still creating new or updated Windows Phone 8 apps, we have already seen an increase in developer revenue month over month, up 40% in the 30 days since the SDK release. We anticipate that to grow with new hardware sales and as apps with the new capabilities like in-app purchase begin to reach customers. Our commitment to creating opportunity for developers is focused on 3 key tenets:

Innovation. Establish Common UX Design Language. With Windows 8 and Windows Phone 8, Microsoft has created a common, compelling user experience design to accelerate and simplify how users interact with their devices. And we have added a rich set of shared APIs and a consistent toolset, so developers can create innovative experiences for both Windows and Window Phone users.
Customer Reach and Engagement. Create a global distribution opportunity. Over the course of 2012 we expanded the number of markets where users can get apps and games for their Windows Phones by over 5x, from 35 markets at the start of the year, to 63 with the spring release to over 95 and counting with Windows Phone 7.8 (testing isn’t complete, the final count may increase) and finally to 191 markets with Windows Phone 8, representing over a 90% increase in addressable market for your apps. We have also invested in giving developers access to better reporting and deeper insight into customer feedback.
Monetization. Support multiple business models to create a diverse app catalog. In 2012 we added in-app purchase capabilities (for both durables and consumables) in addition to the existing advertising, trial and paid app business models already available. Enabling new business models isn’t enough; the payment options customers prefer must also be available. This year’s expansion added some of the most popular including PayPal, Alipay and a large expansion of carrier billing (six new carriers in the last 3 weeks alone). Carrier billing when offered, for example, is preferred by 75% of the Windows Phone users who have access to it and drives over 2x paid downloads compared to credit card billing.
We exit 2012 with a new foundation firmly in place, a huge expansion in developer opportunity, and a great new product in Windows Phone 8, which is receiving acclaim by both industry and consumers. There has never been a better time to develop for Windows Phone. If you haven’t already, we’d like to invite you to visit the Dev Center to download the new SDK and for those of you who have made the journey with us, I want to say thank you on behalf of the entire Windows Phone team. Your feedback drives us and your apps inspire us.

Thank you and Happy New Year!

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