Transforming the Windows Store
Although selling apps is a big business that brings in billions of dollars in revenues every year for Apple (AAPL) and Alphabet (GOOGL), Microsoft (MSFT) is largely subdued in the market. However, the company has begun making moves that could dramatically transform its outlook in the app business.
In March, Microsoft announced a new feature called Playable Ads that it said would allow Windows Store users to get a preview of apps before they buy or install them on their devices. Microsoft’s Playable Ads is designed to give users an option before committing to an app.
$100 billion in revenues
Playable Ads could allow customers to bypass lower-quality apps in favor of more solid offerings. This feature could reduce competition for high-quality apps, potentially leading to more sales.
Mobile apps analytics firm App Annie estimates that worldwide app revenues could exceed $101.0 billion by 2020, up from $41.1 billion in 2015. Users in China (FXI) (MCHI) are already downloading more apps than users in the US (SPY). App downloads and revenues in emerging markets like India are also expected to increase dramatically in the next few years.
Attracting quality developers
If the Playable Ads feature succeeds in increasing the sale of high-quality apps in the Windows Store, Microsoft could draw more quality developers to its app platform. As a result, the company could generate more revenues from apps and potentially increase consumer interest in Windows devices due to the variety of high-quality apps.