Amazon.com taking on Google with rival Android app store

Online retail giant Amazon.com is reportedly poised to roll out an Android application storefront to rival Google's own Android Market as well as efforts like Verizon Wireless' (NYSE:VZ) V Cast Apps. Citing sources asked to sign NDAs about the initiative, TechCrunch reported last week that the forthcoming Amazon app store will offer both premium and free Android applications--for each paid app sold, developers will receive either 70 percent of the purchase price or "20 percent of the list price as of the purchase date," a stipulation presumably in place to dissuade developers from selling their software at a discount via competing stores. Amazon will charge a $99 annual fee for entrance into its developer program, with no listing fee for apps--over the weekend, AndroidGuys reported Amazon will waive the fee during the first year as a "token of [its] appreciation" for signing up.

SlashGear obtained Amazon's proposed App Store Distribution Agreement, which confirms all applications will integrate DRM features to ensure they run solely on Amazon-approved devices. Amazon also will retain the right to modify app binaries. Other notable clauses in the agreement:

  • Amazon retains "sole discretion to determine all features and operations of this program and to set the retail price and other terms on which we sell Apps."
  • Amazon is "responsible for and have sole discretion related to processing payments, collecting payments, addressing requests for refunds, and providing customer service related to our obligations, and we will have sole ownership and control of all sales and other data we obtain from end users in connection with this program."
  • Amazon will retain a copy of each app for subsequent download by any user who purchased the software prior to its removal from the store. "Unless we otherwise determine in our discretion, any termination or suspension will not affect further access, downloads or re-downloads of Apps by end users who have purchased the App before the date the termination or suspension takes effect, nor their rights in previously-downloaded Apps. We are not obligated to return copies of any Content or other materials that you provide."

Amazon.com reigns as the 800 lb. gorilla of the e-commerce segment. In the second quarter, the company reported profits of $207 million, up from $142 million a year ago, with net sales increasing 41 percent to $6.57 billion, compared with $4.65 billion in Q2 2009. Amazon's recent growth heralds a shift away from its roots as a marketplace for conventional merchandise like books and CDs: Less than three years after the launch of its Kindle ereader platform, Amazon already sells roughly twice as many ebooks as it does hardcover titles, and its Amazon MP3 music download service (the default music store on most Android phones) now makes up 12 percent of the U.S. digital music market. No less significant, Amazon's consumers are gradually migrating from the desktop to mobile--in July, the retailer said consumers worldwide ordered more than $1 billion in products via mobile device over the last 12 months.

Amazon is poised to capitalize on a mounting wave of discontent within the Android developer community. Although Google last week expanded Android Market's premium application distribution to include a number of new international locations, consumers still must first register for a Google Checkout account in order to download paid Android apps, except in areas where operator billing is available. Not only does Amazon already accept payments in more countries than Google Checkout does, but the website attracts more than 71 million unique visitors per month, many with credit card billing information already stored in their user accounts. Amazon also excels at promoting and recommending products based on each consumer's browsing and purchasing history, a skill that seems even more noteworthy in light of the app discovery challenges that continue to hamper Android Market.

For more on the Amazon app store:
- read this Slashgear article

Related articles:
Amazon opens enrollment for Kindle developer beta program
Amazon to release SDK for Kindle content
Amazon m-commerce sales top $1 billion over last 12 months

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