Nokia, Microsoft Invest $24 Million in App Development Program

Called AppCampus, the program is designed to give the Windows Phone operating system a much-needed boost

The Windows Phone operating system had a 1.9% market share in the fourth quarter, according to Gartner — which, if you’re Microsoft (NASDAQ:MSFT), means there should be nowhere to go but up.

To that end, Microsoft and Nokia (NYSE:NOK), which has adopted the Windows Phone platform, are teaming up for a multimillion-dollar app development initiativeprogram. called the AppCampus program. Hosted at Aalto University in Finland, Nokia’s homeland, AppCampus will receive 9 million euros (approximately $12 million) from each of the companies beginning in May. Aalto University will provide developers with coaching and resources to help bring devleopment projects to fruition.

Developers can choose to work on other platforms with Nokia device support, but Windows Phone will be the principal focus. In its struggle to gain market share against the clear leaders — Apple’s (NASDAQ:AAPL) iOS and Google’s (NASDAQ:GOOG) Android — Windows Phone has attracted only 70,000 apps from developers so far, while its two main competitors each list more than half a million apps. A recent survey of the preferred platforms for developers found Windows Phone 7, the current version of the platform, coming in third, ahead of only Research in Motion’s (NASDAQ:RIMM) BlackBerry OS.

The ‘Angry Birds Space’ flap

The AppCampus announcement comes just days after rumors that Angry Bird Space, the latest blockbuster app from developer Rovio, would not be coming to Windows Phone. Rovio, however, has since declared that the title will come to the platform eventually, and it declined to commit to a timeline. Angry Birds Space launched last Thursday and earned 10 million downloads in its first three days. The game was concurrently made available for iOS, Android, Macs, and the personal computer version of Windows. The exclusion of Windows Phone was glaring for such a beloved, and ubiquitous, game franchise.

The forthcoming release of Microsoft’s Windows 8 operating system, meanwhile, also could help bridge at least some of the competition gap. Designed to be well suited to touchscreen devices, Windows 8 is expected to allow app developers to adapt a previously existing title to the new platform with relative ease.

There will be a lag between the operating system’s release and its adoption by device makers and consumers, though, making it necessary to continue focus on releasing strong Windows Phone 7 devices. AT&T (NYSE:T) announced Monday that the Lumia 900, the flagship Nokia smartphone running Windows Phone 7, will ship starting the second week of April. The 4G device sports decent specs considering its $100 price tag (with a carrier contract) and could attract budget-conscious late adopters while building momentum for the brand as the Windows 8 release date approaches.

The strongest direct competition for Microsoft-Nokia will be Google, whose pending  acquisition of Motorola Mobility could provide Google with an important cache of patents.

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