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Amazon opens its App Store

by Nitesh Patel | 3月 22, 2011

The opening of the Amazon Android App store on its surface may not appear to usher in a sea change in mobile apps distribution. While competitive third parties such as GetJar already exist Amazon is a different entity entirely. There are a few tactical and fundamental reasons why Amazon matters.

1. Amazon's extensive billing relationships. Apple claims to own the most accounts with associated credit cards at north of 200 million. The only other potential/possible rival to that is Amazon. So, while Google may use Checkout or PayPal or even carrier billing for the Android Marketplace Amazon can begin selling apps to people with credit cards on file today. This is a very important difference and could make Amazon the defacto purchase place for buyers who already have an account there.

2. Enhanced Discoverability. One key to Amazon's success thus far is its ability to uncover similar items that could be of interest to users based on browsing, buying, and ownership patterns. Android has struggled mightily on this front and as a result Google is left trying to get users to pay for more content. Amazon could introduce apps in a new way and help expose new applications based on user behavior. Another component is that Amazon knows of other purchases so it could recommend apps that work cross device (at some point in the future) and suggest new hardware that works with a buyer's ecosystem, and more.

3. Broad consumer insight. If a user is an avid Amazon buyer, Amazon knows the kind of books one buys, movies ordered, and electronics in a house. This knowledge could allow Amazon to create incredibly tailored recommendations to users in addition to recommending new hardware that can take advantage of the apps purchased. Amazon could become the one-stop digital shop for Android and beyond. If you don't think Amazon's free Prime video streaming plays in to this role then you don't know Amazon.

4. Credibility. People know and trust the Amazon brand and that could lead users who are less comfortable with Google Checkout or PayPal or even carrier billing to use Amazon as a trusted retailer when buying apps. For Amazon this is a big win because it may expand its customer base of credit card accounts if successful.

5. Amazon has unrivaled resources. As evidenced by the exclusive release of Angry Birds Rio it's pretty clear that Amazon has the resources to drive partnerships and make itself known as a place for Android Apps.

The notion that will probably play out in the media is something along the lines of "Amazon versus Google" and eventually "Amazon versus Apple" but the truth is, if Amazon is successful then Google comes out ahead because more people are using more apps for longer periods of time. Google isn't expecting to drive real profit from its app store anyway so if Amazon can grow the user base Google will be happy. This is in no way an Amazon versus Google scenario. And Amazon continues to sell Apple products so it's not really an Amazon versus Apple scenario either. Simply, Amazon sells stuff and more of that stuff is becoming digital. Amazon's success would actually help Apple because it could reduce the regulators breathing down the company's neck.

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