Microsoft & Google – Developer dilemma.

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There are good reasons why Microsoft has lost interest in Android.

• There are strong indications that Microsoft is discontinuing its efforts to port Android apps to Windows 10, concentrating instead on iOS.
• This fits with RFM research which indicates that that the relevance of Android in the app ecosystem is continuing to decline.
• One of the biggest problems that Microsoft has is that app developers do not see the economic value in porting their apps to Windows 10.
• From a consumer perspective, this is a major reason not to choose Windows and one that Microsoft has been trying to fix for some time.
• This effort becomes somewhat simpler with Windows 10 where all devices have common code upon which apps can run.
• To make developers’ lives easier, Microsoft also announced two Software Development Kits (SDKs) that would allow developers to recompile Android (Project Astoria) and iOS (Project Islandwood) to run on Windows 10 devices.
• It turns out that Project Astoria is in fact an emulator that runs on Windows meaning that no re-compilation of the Android apps is necessary.
• While this is quick and easy, the end result is poor as history has shown time and again that emulators do not work well on mobile devices and do not appeal to the user.
• On the other hand Project Islandwood is a proper kit for recompiling iOS apps (Objective-C and SWIFT).
• While this involves some input from the developer, the result is a decent app which has some chance of delighting the user.
• RFM’s research has also indicated that Android apps are continuing to lose their relevance in the app economy and that developers are increasingly turning towards iOS as their sole source of monetising their apps.
• Consequently, it comes as very little surprise to discover that Microsoft appears to have put Project Astoria on hold and I suspect that it will be discontinued.
• More and more of the most demanded apps are appearing on iOS first, meaning that iOS is the platform to target with Android becoming less and less relevant.
• I hope that Microsoft focusing its efforts in this direction will yield better results because to date progress has been disappointing.
• However, for Google, the falling relevance of Android apps is extremely worrying.
• It is access to third party apps via Google Play that allows Google to control Android in developed markets and thereby ensure that its ecosystem is front and centre on Android devices.
• This is critical to the generation of mobile advertising revenues and increases my concerns that my medium term forecasts for Google may be too high.
• Even ignoring this issue, I continue to believe that Google’s shares have already gone too far relative to fair value which I have put at $636 per share.
• Consequently, I think it is time to seriously consider taking money out of Google and putting it into Microsoft or Samsung.