3 Reasons Why Amazon's Appstore Will Help Android Reach New Heights

Amazon has opened up its Android AppStore to the general public. The store is accessible at Amazon.com/appstore and hosts apps for Android phones and tablets. By launching the store, Amazon has now come into direct competition with Apple and Google as Apple with its App Store and Google with its Android Marketplace are the other two dominant players in the mobile app eco-system.

Amazon-android[1]Amazon has opened up its Android AppStore to the general public. The store is accessible at Amazon.com/appstore and hosts apps for Android phones and tablets. By launching the store, Amazon has now come into direct competition with Apple and Google in the battle for dominance of the mobile app eco-system.

The store that has gone live today with an initial catalog of 3,800 apps and was announced earlier this month. Amazon’s entry into selling apps is an acknowledgement of the fact that the retail market for virtual goods/apps could one day become as big a business as the retail market of real goods. Although the new store explicitly sells apps for the Android platform, Amazon is no newbie to selling virtual goods, as the company has been selling ebooks and music for a long time now.

News is already making the rounds that Amazon is looking to hire Android developers, which would enable the company to launch an Android based Kindle. According to Nick Bilton from New York Times:

Now this could simply mean that Amazon is hiring engineers to work on new software for other Android devices. But it could also pave the way for a Kindle that runs Android, which would in turn be a color device. The current Kindle runs the Linux operating system.

It’s still up for debate whether an Android Kindle would be good for Amazon, or better for Google. With tablets becoming a competition over the number of apps available for the platform, Amazon would have a lot of catching up to do if the company decided to introduce an entirely new tablet operating system.

At first sight it might sound as if the AppStore would eat away Google’s revenues from app sales, but here are the three reasons why Amazon’s entry into the space would be a huge win for Google.

1. Amazon might launch an Android based Tablet

The iPad bundled with the ebook reader app does exactly what the Kindle does, i.e. allows users to read books. But that’s not all, you can also watch movies, play games and do other things like video chat on your iPads. People won’t buy a dedicated ebook reader for hundreds of dollars, when they can just get a tablet on which they can read books. This is similar to what happened with the iPod. iPod sales plummeted with the launch of iPhone, which was essentially an iPod + a phone.

Hence the iPad has made the Kindle irrelevant just like the iPhone made the iPod irrelevant, and Amazon knows this better than any of us. So I am speculating that Amazon wont launch an Android based Kindle, as Nick Bilton is assuming, instead the company would launch an Android based tablet of their own to compete with the iPads.

Business Insider has a piece detailing how Amazon could quietly become a huge tablet player. If that happens, Google will have yet another device vendor that will be building the hardware to run Google’s Android platform.

2. Amazon’s AppStore will enrich the Android App eco-system

Amazon is the go-to destination when it comes to ecommerce. Amazon’s entry into Android based apps will enable millions of Amazon users to easily buy Android apps. This global scale distribution platform that Amazon is about to offer would pull in legions of new developers to develop apps for the Android platform.

3. More Devices Using Android Means More Developers and Therefore… Even More Devices

An increase in the reach of Android apps, will increase the number of developers that would want to develop for Android, which in turn will increase in the number of users that want to buy Android based devices. All of this result in more hardware vendors, jumping the Android ship and trying to build Android based phones and tablets.

Android: The Operating System of The Future

Android at its core is nothing but a linux kernel with a proprietary desktop. So essentially the platform is as capable of powering PCs as it is of powering mobile devices. It is only a matter of time before Google will start releasing versions of Android for Laptops, and PCs, just as it has already released a version of Android for the tablets. In fact even the current versions of Android might already be able to power our laptops and PCs. Its just that the hardware vendors have not thought about shipping laptops and PCs with Android based OS.

But that is about to change in a big way. Asus, the PC vendor that literally invented the netbook market, has announced that it would start shipping netbooks with Android based OS, as early as June 2011. According to liliputing:

While Asus initially promised to ship its first Eee PC for $200, by the time the first 7 inch model launched in November, 2007 the price tag was set at $400.

Netbook prices have fallen since then, as components have become cheaper and more widely available. But most new 10 inch netbooks tend to sell for between $300 and $400.

Now DigiTimes reports that Asus is eying the cheap end of the spectrum again, and plans to launch a new netbook this June which could sell for between $200 and $250.

Part of the cost savings would come from the operating system. The earliest netbooks shipped with various Linux distributions as a way to avoid Windows licensing costs and hardware restrictions. But Windows models became so popular that most netbook makers stopped offering Linux options.

DigiTimes suggests that Asus may see Google’s Chrome OS or Android operating system as a new alternative. Both Chrome OS and Google Android 3.0 should be available as open source operating systems by this summer, allowing Asus and other PC makers to ship devices with well-tested software without paying any OS licensing fees.

The Android based netbooks from Asus would be the first real commercial demonstration of the fact that a) Android platform is powerful enough to power PCs, and b) Operating System is more or less a commodity piece of code now, and hence should be shipped for free. Once the world realizes these two points, look out for a tsunami of users demanding Android based laptops and PCs and herds of PC vendors rushing to fulfill this demand.

Google is not interested in making a few bucks off the back of app sales, it has its eyes on owning the OS platform of the future. With Amazon on its side, it could be very well on its way to achieving this goal.