Ronnie05's Blog

Amazon Apps Store:What could this mean for Google and Apple?

Posted in Applications and User Interfaces by Manas Ganguly on January 10, 2011

This is the second in a series of three posts detailing the Amazon Apps Store and its effects on other outliers!. Read part 1 and part 2 of the posts.

What this could mean for Apple and Google!

Watch out Apple! Apple’s revenues through its app store comes from the paid apps downloads on which it gets a 30% cut, and from the iAd service through which it earns ad revenues on free apps and gets 40% cut. However, Amazon’s entry into this market could be a threat to Apple, which already is facing competitive pressures from the growing popularity of Android’s app store. The Apps market would continue to see some fierce growth going thru the next half decade. However, traditional e-retailers such as Amazon would bring a serious (negative) price sensitivity, which would reduce the Margin thru-put for Applications.

Estimates by different research agencies about growth in revenue and downloads in Apps stores. The Gartner numbers predict a 21% fall in unit selling price of Apps in the next 5 years.

Even if you’re Google and Amazon’s store eats into its own App Store revenue, the existence of a great App store brings more people to Android, regardless of which store they use. While an Amazon App store represents a bold business move for Amazon, positioning them to leverage a platform that will pervade phones, tablets, televisions, cars, and a variety of other “connected devices” in the next few years, it also represents credibility and a serious investment in Android by one of the strongest brands on the Internet.

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