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Amazon looks to attract app developers with broader reach

June 21, 2012

The Amazon Appstore

In a move reflecting its growing role in the mobile application marketplace, Amazon is opening its app store to international markets for the first time.

The online retailer announced that app developers can now submit apps for distribution this summer in the United Kingdom, Germany, France, Italy and Spain. The international expansion will give developers a broader customer base and create an opportunity to generate even more revenue, which in turn could help Amazon encourage more developers to create apps for the Kindle Fire.

“The expansion into UK, Germany, France, Italy and Spain doesn’t represent a massive immediate opportunity in downloads relative to the U.S. – all of Europe is somewhere between 20 percent and 30 percent of the market – but it indicates Amazon’s commitment to the Appstore and their commitment to other international markets in the future,” said Karl Stillner, CEO of Appolicious, Chicago.

“Amazon is playing a significant role in the ecosystem by being the first non OS or mobile carrier to make a large play at creating a marketplace for mobile apps,” he said. “If anyone outside of those two categories can succeed, it’s Amazon with their established account base, search and cross-selling ability.

“And, the real impact the store is having is on the Kindle ecosystem.”

The Amazon Appstore in the United States offers tens of thousands of apps and games.

New revenue strategy
Amazon plans to expand the app store to other markets internationally in the near future.

Amazon is also changing the revenue share agreement for paid apps starting July 1. On that date, developers will earn 70 percent of the list price on each paid app sale, with Amazon retaining a 30 percent share.

Under the previous terms, developers earned either 70 percent of the app’s sales price or 20 percent of the list price depending on which was greater.


The Kindle Fire

The new revenue share strategy for paid apps aligns with what developers earn for in-app purchases. The 70/30 split also aligns with how Apple compensates developers in its App Store.

The terms have also been adapted to enable developers to better control which apps they will make available to Amazon customers and when.

Broad appeal
The news follows the April introduction of In-App Purchasing for the Amazon Appstore, enabling developers to monetize their apps and offer customers Amazon’s one-click purchasing experience.

Amazon reports that some developers have seen revenue double as a result of the new in-app purchasing.

For example, Glu Mobile reports that its latest title launched on Amazon, Frontline Commando, has seen both revenue per daily active user and lifetime value metrics exceed averages as compared to other devices and platforms.

Additionally, reports that its community engages with its apps 45 percent more on Kindle Fire devices than any other device.

While Amazon’s Appstore is growing , it is having little impact outside of the Kindle, per Mr. Stillner. Part of the reason why is so far the focus has been on offering apps with the broadest appeal.

However, Amazon will need to focus on more niche oriented apps it wants to continue to grow.

“One of Amazon’s challenges is to provide a broad enough coverage of the app ecosystem to change consumers’ buying behavior and move them away from the Android Play market,” Mr. Stillner said.

“Amazon has an opportunity to address this by incorporating full ecosystem app discovery into their offering to complement the apps that they sell,” he said.

“Another challenge Amazon has is that well over 90 percent of downloads happen from mobile, so mobile distribution really matters more than in their other categories. Amazon also has a huge opportunity to be a unbiased player in the ecosystem, OS-wise – they could provide you with listing of the apps that exist in each ecosystem and use that to drive device.”

Final Take
Chantal Tode is associate editor on Mobile Commerce Daily, New York

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