Does Amazon’s Appstore Have What It Takes To Succeed?

Amazon's Appstore for Android launched in March 22 and currently has 4,000 apps. Amazon is in a strong position to be a major channel of digital distribution if it can overcome some hurdles.

Amazon’s Appstore for Android launched in March 22 and currently has 4,000 apps. Amazon is in a strong position to be a major channel of digital distribution if it can overcome some hurdles. More after the jump.

We recently covered the buzzworthy launch of the Amazon App Store last month. The Android Marketplace trumps the Amazon Appstore with its 130K apps compared to Amazon’s 4K app. Apple App Store, on the other hand, is clearly the leader with 350,000 apps. So where does Amazon fit in? The first major reason that Amazon is selling apps is that Amazon has a robust personalized recommendation engine that it can leverage to promote apps and deals to its users. The current experience of searching for apps on Android Marketplace is less than stellar so Amazon can differentiate its app store by helping customers find and discover relevant products. Secondly, mobile shopping is booming and Amazon is keen on becoming a strong retail channel for digital goods. Amazon is the only company that comes close to having the number of credit cards on file as iTunes does – close to 200M.

Selling apps is no different than selling something else, so Amazon is simply capitalizing on their strengths as a retailer. As many publishers broaden their horizons from iOS to Android, some are looking to Amazon Appstore to promote their app. One example is Metaversal Studios’ Shave Me! which is currently ranked as the #2 free app in the iTunes App Store.

“We are excited to bring Shave Me! to the Amazon Appstore on the heels of our rapid rise up the iTunes Free App charts in these first few days of April,” said Matt Sughrue, VP of Product Development at Metaversal Studios.

One appealing aspect of Amazon’s AppStore is its ‘Free App a Day’ feature. To date it has pushed many apps through its program but there could be a lack of premium content to push as Amazon has turned multiple times to Angry Birds Rio to feature it. Angry Birds Rio garnered a total of 10 million download across iOS and Android, especially using Amazon’s AppStore to push its app. Amazon of course has its own issues, from the ease of downloading the app store on to Android devices to developers having trouble accessing their app sales page and so forth. If Amazon can over come some of these issues they can be a strong player in the space. Some argue Android should go beyond its software endeavors and delve into hardware. Currently Amazon’s strategy is to have the Amazon AppStore come preloaded on devices but it could technically launch its own device as it would fit in its strategy of making great products and services available on mobile devices. Amazon is already doing this by pairing Kindle with Amazon.com’s digital book library. Amazon could also be setting itself up to be a payment platform for Android tablets.

“I think this is the more likely scenario, actually,” Epps, an analyst at Forester, told eWEEK. “iTunes has 200M credit cards on file; Amazon is one of the only other companies that comes close to that. Consumers feel more comfortable transacting via Amazon than Google, so layering Amazon payments on top of the Android Market could encourage consumers to buy more Android apps.”

Epps’ colleague, Forrester analyst Charles Golvin, added:

“In addition to payment support, there’s something that Amazon does infinitely better than anyone other than Apple who is operating an ‘app store’ (quotes to prevent legal action from Cupertino): retail. You know, market apps, ease their discovery, run promotions, etc. I suspect Amazon simply sees software as yet another product category they can dominate, on tablets AND on phones.”

Update: Amazon is reportedly launching their own device called Blaze. For more details click here.