The Amazon Appstore has quickly become a major force in paid
app sales for Google's Android platform, according to a new report from Distimo. The mobile app analytics firm found that 42 of the top 110 paid mobile apps available from both Google and Amazon generated more revenue through the Amazon Appstore than Android Market last month.
Amazon's new Kindle Fire, which sold more than 3.9 million units in the final three months of 2011, was the driving force behind Amazon's mobile app sales in January. However, Amazon may also have benefited from having less clutter in its Appstore, which offers about 26,800 apps as opposed to the 400,000-plus apps on tap in Android Market.
Only 32 percent of the mobile offerings at Android Market were paid apps in January. By contrast, paid mobile apps in Amazon's Appstore accounted for around 65 percent of the total and have also been selling for substantially less than what Google charges, on average.
The average price of the top 100 paid applications in the Amazon Appstore is 40 percent lower than in the Google Android Market, said Hendrik Koekkoek, author of the report for Distimo, which is based in Utrecht, The Netherlands.
"One of the reasons could be that Amazon is responsible for setting the price in its store," Koekkoek said. "While all available paid apps are $3.13 in the Google Android Market, these applications are $2.77 in the Amazon Appstore."
Creating a Platform Within a Platform
What Amazon appears to be doing is creating a platform within a platform, and is off to a good start with more than 26,000 apps already in stock, said Al Hilwa, director of applications development at IDC.
"By leveraging the Android ecosystem, Amazon is able to bring apps very quickly [to market]," Hilwa said. "The work involved in spinning an Amazon app from an existing Android app is much less than starting from scratch for a new platform."
What Amazon is showing with its Appstore is that both the user and the experiences can be significantly improved if the marketplace is better managed and curated.
"The apps on the Amazon Appstore definitely benefit from a smaller list that is more focused on the specific hardware platform," Hilwa said. "But clearly the biggest factor is the market share that Amazon has been able to gain so quickly."
"Due to the way Amazon handles the pricing of applications, the [cost to users] of the same apps can be very different in these two stores," Koekkoek wrote in Distimo's new report. "[Price] reductions are generally larger in the Amazon Appstore than in the Google Android Market."
For example, the Monopoly app for the Android platform, which was priced at just $0.99 under a limited time offer from the Amazon Appstore, cost $4.99 at Google's Android Market. What's more, Amazon offered Splashtop Remote Desktop for free in a one-day special while guarantying minimum royalties per sold app to developers -- even as the same app was priced at $4.99 in Google's Android Market.
Beyond the success of the Kindle Fire, Amazon's mobile app pricing may have played an important role in enabling Amazon's download volumes to almost quadruple during November in comparison with the prior month and then jump by more than fourteen times in December. By January, Amazon was generating 28 percent of total sales for the top 110 apps available from both the Amazon Appstore and Android Market.
"Since the Amazon Appstore is available on only a limited number of devices compared to the Google Android Market, it shows the potential of the Amazon Appstore for developers," Koekkoek wrote.