Amazon preluded its “big reveal” Wednesday (Fire phone) with a word to app developers: “We’re where you want to be.”
The company also struck a deal Wednesday with BlackBerry to offer the Amazon Appstore as a lifeline to BlackBerry’s fledgling of an apps ecosystem.
Amazon’s Appstore sits somewhere in the 240,000 app range, coming close to tripling its app and game count from a year ago. The e-commerce giant cited traction in the developer community, noting “improved reach, greater monetization, and oftentimes, higher revenue” for its app makers, said Mike George, VP of Amazon Appstore and games. The company revealed no dollar amounts.
By comparison, the Apple App Store and Google Play each house more than 1 million apps in their respective stores.
While Amazon’s store is only about a fifth of the size of its counterparts, “there’s a pretty good base for them to work with,” said Craig Palli, chief strategy officer for mobile app marketing platform Fiksu.
Additionally, he said, “sheer volume of apps isn’t the most important indicator of success. Acquiring users who take meaningful actions – and spend – within apps will be the ultimate test of Amazon’s smartphone strategy. Some early indications are pointing to monetization levels that are on par with iOS, which could be a great sign for Amazon.”
“One important thing to note is that Amazon is continuing to bifurcate the Android ecosystem, similar to what they did previously with Kindle and the strategy of Samsung,” Lai explained. “By owning their own smartphone, Amazon can create a proprietary platform that not only integrates Amazon API (commerce, data, content) services,” but offers, too, the ability to promote, curate and cultivate apps.
With the ever-growing challenge for app developers to find and acquire new users, re-engagement opportunities will be an important next step past the initial install.
Although Amazon Appstore’s potential promise is its unique ability to reach consumers who purchase both physical and digital goods and services, Amazon may struggle overall with reaching equivalent scale of iOS and Google Play.
“Generally the feedback we hear is that developers like the tools that Amazon provides and it’s got strong revenue per user, but the challenge is that the volume isn’t there, such that getting a featured position and top ranking from Amazon doesn’t lead to significant revenue,” said Tim Ogilvie, cofounder of Think Gaming, which helps mobile game developers monetize their apps. “Unless they can change that trend, I think it’s going to be tough to pull developers away from iOS and Google Play.”
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Despite the competitive pressure from the Apple/Google camp, app-store positioning remains a viable challenge across the board, industry insiders say. There is a problem of oversaturation in Apple and Google stores, said Jennifer Wong, founder and CEO of mobile app developer Alt12 Apps, who noted the inherent difficulty breaking into the top 1,000.
“New developers will have to look at promising new app stores because there’s an opportunity to be first to market and garner visibility,” she observed. “(Amazon) has shown they can be successful at becoming more than a shopping destination. They’ve become an entertainment destination with Amazon Prime video and, now, music.”
It’s crucial Amazon win over app developers, agreed Fiksu’s Palli. But, as he described it, it’s still a bit of a chicken-and-egg issue for Amazon.
“A mobile OS doesn’t get users if it doesn’t have apps, and if it doesn’t have users, developers don’t bother making apps,” he noted. “But, with the Android-based OS underneath, (Amazon) development for Amazon-specific devices doesn’t involve starting from scratch, so developers can open up to additional audiences without” too much extra leg work.
If the Amazon smartphone is compelling enough and, ultimately, priced competitively to build up a significant user base, Palli added, “you’ll quickly see developers including Amazon versions of their apps right behind iOS and Google Play versions.”
