Amazon Appstore Hits Its Stride, Still Chasing Apple App Store & Google Play

When Amazon announced its Appstore for Android last year, a lot of people were left scratching their heads. Despite the seeming strangeness of Amazon running an Android Appstore, mobile app developers were cautiously optimistic. The Android Market (now Google Play) at the time was a disorganized and difficult-to-monetize quagmire. A curated, third-party app store with the might of Amazon behind seemed to offer a unique opportunity. But the e-commerce giant had to learn to navigate the world of mobile apps just like everybody else.

App Of The Day And Gaming Nightmares

From the beginning, it was not all roses between Amazon and developers. Upon launch of the Appstore, it became evident fairly quickly that Amazon did not know how to handle the mobile developer community. Shortly after launch in March 2011, the International Game Developers Association (IGDA) issued a warning for mobile game developers to steer clear of the Appstore. The group's concerns were over pricing, promotion and distribution - isssues that Amazon’s developer agreement made confusing and opaque: 

"The IGDA has significant concerns about Amazon's current Appstore distribution terms and the negative impact they may have on the game development community... we are not aware of any other retailer having a formal policy of paying a supplier just 20% of the supplier’s minimum list price without the supplier’s permission,” the IDGA said in a letter to its developers in April 2011.

This response was a big concern for Amazon because games continue to be the most popular single category of mobile apps. 

Later in 2011, Amazon had a different mess on its hands, again tied to distribution and developer compensation. An independent app developer had agreed to be part of Amazon’s popular “free app of the day” program. The agreement between Amazon and developers held that even though the app was free for the day, publishers would still make 20% of the list price on downloads of their apps. The developer, Shifty Jelly, found that not to be the case. 

“That’s right, Amazon gave away 101,491 copies of our app! At this point, we had a few seconds of excitement as well, had we mis-read the email and really earned $54,800 in one day? We would have done if our public agreement was in place, but we can now confirm that thanks to Amazon’s secret back-door deals, we made $0 on that day. That’s right, over 100,000 apps given away, $0 made,” the company wrote at the time.

Not surprisingly, Shifty Jelly terminated its Amazon Appstore developer account. 

Problems, Solutions And The Kindle Fire

Organizational problems between Amazon and developers were relatively common in the early days. Developers noted that review times for apps (Amazon pre-approves apps on its Appstore, just like Apple does for the iOS App Store) were lengthy, apps were not filtered for different screen sizes and it was difficult for customers to contact developers with problems. 

“We definitely didn’t have everything buttoned up appropriately,” acknowledged Aaron Rubenson, the director of the Amazon Appstore, in an interview with ReadWriteWeb. “We’ve learned a lot.”

In October 2011, Amazon announced the Kindle Fire, its first full-featured, Android-based tablet. All of a sudden, the Amazon Appstore for Android made a whole lot more sense. The e-commerce King could funnel Fire tablet users to its own curated app repository and make money off of it. Fire users were blocked from accessing Google’s Android Market, even from the browser. 

Perhaps just as important, Amazon started refining its developer experience. 

The Appstore team has grown significantly (and Amazon is still actively hiring Android developers, managers and engineers) and the company has expanded the program to include more layers of developer support. That means extra app testing and more marketing experts to help developers spread awareness an increase distribution. For the App of the Day, the terms are clearer and there are more people involved to help create an integrated campaign for the developers and help prepare them for the deluge of downloads associated with the sale. 

Amazon has also redesigned its developer portal for the Appstore and added a new tools and software developer kits. The biggest addition came in April with Amazon’s in-app purchase SDK that allows for integration of the company’s “1-Click” purchasing for in-app goods. 

Easing that process can mean big bucks for app makers. “The average in-app purchase is two-times that of a paid app,” Rubenson noted. 

With the newly announced Kindle Fires, Amazon also released a new maps SDK, powered by Nokia’s navigation suite. Games have also been given a higher priority in the new Kindle Fires, with a dedicated menu icon to the games section in the Appstore.

Developers Respond

To Amazon’s credit, there have not been any significant developer flare ups in 2012. 

“We are really pleased with our overall relationship with Amazon,” said David Tyler, director of product development at NatureShare, in an email. “Working with our contact there has been great. He was always quick to respond and took a genuine interest in our apps. Amazon promoted our app when it was first released and our Audubon Birds app was even featured in an email.”

Yet, Amazon remains the underdog. Developers go where the eyeballs are - and the overwhelming majority of eyeballs are on non-Kindle Android and iOS devices. Android’s Google Play store has 675,000 apps, Apple’s App Store has 700,000. The Amazon Appstore has 51,000. Android’s installed base is near 500 million while Apple has activated 400 million iPhones. The Kindle Fire cannot come close to matching those types of numbers. 

“Many of the mobile game developers on our network report higher ARPU (Average Revenue Per User) on Amazon's Kindle Fire devices than on either iOS or Android devices,” said Maria Alegre, CEO of Chartboost in an email. “However, there is simply a much higher volume of iOS and Android devices on the market than Kindle Fire devices. So mobile game developers and publishers, while they can make more money per Kindle user, are making more money overall on the more popular iOS and Android platforms. It's a volume issue for Amazon, and we're interested to see how the new Kindle Fire HD line of devices changes the landscape."

It is almost safe to say that Amazon has finally solved its developer issues. Amazon’s team is now bigger, more efficient and more receptive to mobile developers and their needs. Developers know what to expect from Amazon and its services so they shouldn't see more of the types of surprises that rocked Shifty Jelly in 2011. 

The trick for Amazon now is to figure out how to get out from under the thumb of Google and Apple. The release of two new Kindle Fires is a good start, but far from enough. An Amazon smartphone has long been rumored to be in the works, but would an Amazon-branded smartphone sell in big enough numbers to make a difference?

But give Amazon its props. The company may have stumbled when it first entered the mobile app space - and it took plenty of lumps along the way. But now Amazon looks like it has found its stride.