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Summary:

Analytics firm Distimo said that, of the top 110 apps that appear in both Android Market and Amazon Appstore, 42 of them make more money on Amazon than on Android Market. That’s a strong showing for Amazon’s Appstore, which got a boost from the Kindle Fire.

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Investment in Amazon Appstore is paying off in a big way for many top developers, a good chunk of whom are pulling in more money for their apps on Amazon than through Google’s Android Market. App analytics firm Distimo, in its latest monthly report, laid out how despite its much smaller collection of apps,  the Appstore is becoming a lucrative place for app makers to do business.

Distimo said that of the top 110 apps that appear in both the  Android Market and Amazon Appstore, 42 of them make more money on Amazon than on Android Market. Overall, 28 percent of the revenue in those top apps came from the Appstore. That’s a big showing for an Appstore that is less than one year old and has 26,826 available applications, compared to more than 400,000 worldwide for Android Market, according to Distimo.

Amazon Appstore is turning out to be a great place for paid app downloads, compared to Android Market which monetizes better through in-app purchase. Distimo said paid apps in Appstore made up 65 percent of all apps, while the percentage of paid apps in Android Market has slipped from 38 percent to 32 percent over the last seven months. Of the top 200 grossing Android Market apps, 66 percent of the revenue comes from in-app purchases.

The rise of Amazon Appstore is due in large part to the emergence of the Kindle Fire, which has been a major accelerant for Appstore and is now used more than any other Android tablet. In December, the total number of downloads generated by the top 100 apps in the Appstore increased fourteen-fold compared to two months earlier. While Android Market generated 22 times more new apps than the Appstore in September last year, by December and January, the number of new apps on Amazon had surged, cutting the Market’s advantage for new apps to about 5-1.

The fact that paid app downloads are bigger proportionately on Amazon than on Android Market may be due in part to Amazon’s pricing controls. One of the key differences between the two stores is that Amazon can change the price of apps, a provision that concerned some app makers. That control has apparently resulted in the average price of the top 100 paid applications in Amazon Appstore being 40 percent lower than in the Market. The average price of the top 100 applications is $3.76 in Google’s Android Market and $2.24 in Amazon Appstore. The game Monopoly, for example, was available for 99 cents in Appstore for a limited time last month, compared to a fixed price of $4.99 for the whole month in the Market. Amazon’s simple one-click check-out process and its overall reputation for commerce may also be driving paid downloads.

One interesting fact that emerged is that about 50 percent of Amazon’s apps don’t appear in Android Market, said Distimo. That suggests that, while many app makers are simply porting over their apps from Android Market to Amazon Appstore, a big number of apps are bypassing the Market and going straight to Amazon. It’s unclear if this is just Kindle-versions of established Android apps, but it still suggests that developers are making specific investments in Amazon apps.

The strong showing by Amazon Appstore appears to back up early anecdotal evidence I gathered in December, in which a number of Android developers reported seeing a big boost for paid app downloads on Appstore. It’s pretty amazing considering that a big proportion of these downloads is coming from just one device: the Kindle Fire. Appstore also provides apps for other Android devices, but it’s really shining because it’s the app store for Fire owners. Appstore benefits in some ways from its smaller base of apps, which makes discovery easier for users, who don’t have to wade through as many options. It will be interesting to see if Amazon can still remain as lucrative if its appstore attracts a lot more apps.

Overall, what this means for Android developers is that, if they’re looking to make money from paid downloads, they really need to think about Amazon Appstore. The work to submit an app to Amazon increasingly looks like a solid bet. And it may make sense for developers to look at the Fire as its own distinct platform. Android Market still has the largest reach compared to Appstore, which is still limited to the U.S. But more and more, we’re seeing how the Kindle Fire is providing an outsized impact on the Android ecosystem, which has gained a pretty potent way to make money from Android apps.

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  1. Amazon has a free app of the day. Has that been substracted?

  2. The Android Market is so poorly designed, and so full of garbage, that it’s difficult to discover worthwhile apps. Perhaps Amazon is just better at surfacing and highlighting the apps that people actually want.

  3. “The fact that paid app downloads are bigger proportionately on Amazon than on Android Market may be due in part to Amazon’s pricing controls.” Or rather due to the fact that Amazon has my trust since 1999 of handeling most of my purchases as well as protecting me. I have not nor do I see myself adding a credit card to the Google Market Place. I have not paid one dollar for an app on android but spent money on my ipad. Why? Ease of buying and trust into buying.

    Case in point: Instead of paying for an advertisement free app, I donated money to the dev of an app instead and kept the one running (useless) ads instead of buying it for 2€ or so ….

  4. I bet that the whole study is bogus because they didn’t take account of Amazon’s free app of the day.

    They probably just look at the number of downloads of a particular paid app in August and then compare it with the number of downloads of the same app in January. Oh, it was downloaded 10000 times in 6 months at 99 cents each. But they forgot to take into account that 9900 of the downloads were done during that Amazon free app of the day promotion and the app developer got only 100 paid downloads in 6 months time.

  5. Lindsworth Horatio Deer Friday, February 24, 2012

    Amazon set to launch smartphone in Fourth Quarter of 2012AD – The App Economy & the Importance of Digital consumption is taking precedence over retail purchases. I had predicted based on the current popularity of the Amazon kindle Fire and its contribution to amazon’s reported Fourth Quarter 2011AD profit margins.

    http://mythoughtsontechnologyandjamaica.blogspot.com/2012/02/amazon-set-to-launch-smartphone-in.html

  6. We’ve definitely had better luck getting traction for both our paid and free apps on Amazon AppStore than on Android Market. For new apps, there’s really no easy way to find then in the Android Market. Our game Tip Tap Tile Ultimate Edition is one example: http://www.madmochi.com/games/tip-tap-tile-ultimate-edition

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