While Amazon has had its own Appstore for Android devices since March 2011, I suspect most of the growth came from Amazon’s own mobile devices and not Android smartphones or tablets made by others. A few phones have come with the Amazon Appstore pre-installed, but most do not. That means consumers have to learn about Amazon’s storefront on their own and then install it themselves. Google’s own Play store is central to the Android experience, which is a potential barrier here.

There’s no Google Play on the Kindle Fire or Kindle Fire HD tablets, however. It’s Amazon’s Appstore or nothing, save for any hacking or tinkering that might enable traditional Android apps. For that reason, assuming reasonably good sales of Kindle Fire tablets, most of the app download growth is likely from Amazon’s own hardware. That’s not necessarily a bad thing, particularly if the company launches a smartphone, as some expect it to do.

But the growth isn’t related solely to device sales: Amazon has made a serious attempt to help developers create or port applications to the Amazon Appstore. Along with the download figures shared on Thursday, Amazon announced support for A/B testing:

“With A/B Testing, developers can test simultaneous treatments of their apps, receive data about what’s worked best, and quickly adjust their apps to take advantage of this customer learning. A/B Testing is the latest developer service that Amazon has launched (along with Achievements, Leaderboards, Whispersync across devices, In-App Purchasing, and 1-Click Purchasing) that make it simpler than ever for app developers to concentrate on the differentiating parts of their apps rather than the undifferentiated infrastructure and engagement components.”

That’s a nice development feature that could give programmers a better idea of what consumers do and don’t like about application changes. From there, a developer could quickly adjust code for the optimal experience.

This new development feature is just another in a long list that Amazon has provided since launching the Appstore: GameCircle, a Maps API, Test Drive (Amazon says 20,000 apps can be consumer tested online for free), localization support, and a Kindle Fire emulator are all part of the developer experience now. And the better Amazon treats its developers with supporting tools, the better the apps will be helping to fan the Kindle Fire download flame higher and higher.

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Back in the day, when Digg was still a dominant force on the web, the company essentially came up with the “sponsored story links as an ad-unit” concept that proved to be quite successful, since it fit in with the overall usage behavior of Digg’s community. The new Digg has taken that concept and applied it to mobile apps. They call this “Apps We Love.” Apps that meet Digg’s criterion will pay an undisclosed amount of money to be featured.

Along the grain advertising

Digg General Manager Jake Levine say that the two apps that have been featured in tests so far — Zapd and Tapestry — have seen between two percent to four percent click-through rates on about 250,000 impressions per ad across the web and mobile platforms, which higher rates on mobile devices.

The click-through rate mirrors the click throughs on services such as BuzzFeed, which have taken a similar “content as advertising” approach. This approach has been a subject of great debate for a long time and will continue to be debated in context of traditional media publications.

John Borthwick, the co-founder and CEO of Betaworks, the main backer of Digg believes that as the content and media types continue to evolve, Internet advertising has to take an along-the-grain approach; as he defines it, “along the grain” means where advertising matches the service. For example, Google AdWords offered a utility not too different than its unpaid search results, which lead to better usage of advertisements. It turned out to be a big hit and the company has benefitted deeply from it. Twitter has started pushing promoted tweets that are very much in sync with its un-paid behavior. Borthwick believes that since Digg helped discovery of news stories, taking the promote-the-app route is an obvious move for the company.

App discovery is broken

Digg is part of a growing number of services that are trying to arbitrage the near-term inefficiency in the app market. Yesterday there was news that since Apple launched its app store, it had approved over a million apps. The Android app market is growing at a breakneck speed as well. All this growth has made discovery of apps very difficult.

Today, if a developer wants to get attention for her app, she has to bank on a few things to go right: Apple (or Google) features them on their App store — which is a long shot unless the app is exceptional — or the app is written up on the many blogs that cover apps. The problem is that while press attention is good, it doesn’t necessarily translate into millions of users. Discovery is a difficult and tedious process.

In an interview with the New York Times, Brewster Kahle, founder of the Internet Archive, a nonprofit digital library, put it succinctly when he said, “If someone else controls the distribution of your work, and the pricing, then you don’t have a company, you have an affiliate.” The New York Times also pointed out that while there are Instagram and Angry Birds, there also hundreds of thousands who don’t make much money from Apple’s app platform.

Inefficiency means opportunity

The market inefficiency has allowed companies like Paris-based AppsFire to thrive in the marketplace. The company yesterday launched its app discovery engine that takes on Apple’s app store itself. It is betting that its app will provide a better experience that Apple’s App Store, which has gone through some design changes (based on its Chomp acquisition)  — not necessarily for the better. If you had to draw an analogy, then AppsFire could be the LinkExchange of mobile.

The situation isn’t very different from the early days of the web when many web publications were started but eventually cratered because they were unable to build a big following. Discovery and attention are still vital criteria for success. And apps are essentially the mobile equivalent of the web destinations. Just as Expedia and Trulia spend dollars attracting traffic to their website, they would need a smarter way to get people to try their apps as well.

Like Digg and Appsfire we are going to see more people take a gander at the app marketplace. My colleague Ryan Kim has written about the growing number of startups that have jumped into the app discovery game. Facebook executives tout their ability to become king-makers for mobile apps, and back in the day Facebook were offering SocialCam as a poster child of success.

However, the market should be ripe for a strong push from an ad-based company that is not beholden to a major mobile platform. And that company is Yahoo, which under new CEO Marissa Meyer is looking to mobile as a big opportunity to reinvent itself. Last year they embarked on an app-discovery effort, but for now it has not yielded any major results. Maybe they should restart by snagging Appsfire and building an app-network. And as for Digg — it yet might live again.

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The appstore, which will go by a few different names depending on the country, will offer the same features U.S. customers have been familiar with, including the popular Free App of the Day, personalized recommendations, customer reviews and one-click payments. Some of the apps will also be localized for each market.

Developers will be able to take advantage of the Appstore for Android’s services like GameCircle, which offers leaderboards, game syncing and achievements, and in-app purchase. Amazon previously telegraphed the opening of the appstore abroad when it called for developers to submit their apps for international distribution in June.

Amazon’s Kindle Fire tablet, which is now sold out, got off to a strong start in the U.S. last year and validated the 7-inch tablet category. Now, Amazon is facing a lot more competition from Google’s Nexus 7, the Barnes & Noble’s Nook Tablet and likely an iPad Mini from Apple . In order to continue growing, the Kindle Fire will need to go international and it will need a full app store to compete. Also, having an international app store will also be helpful whenever Amazon gets around to launching an expected smartphone.

This is also good news for developers who want more downloads, especially paid downloads, of their apps. While Amazon has gotten some flak for its pricing methods, which it’s eased up on, its appstore has proven to generate a lot of revenue for developers, significantly better than Google Play. Now, we’ll just have to wait and see what exactly Amazon announces next week in Los Angeles, but an international Kindle Fire would make a lot of sense.

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In court filings last week, Apple demanded that Amazon provide an executive to testify why the company decided to remove the words “for Android” from some of Amazon’s app store marketing. The filing also repeats allegations that Amazon’s use of “Amazon Appstore” with the Kindle Fire tablet was intended to confuse consumers. (Here are some highlights for legal eagle types:)

evidence suggesting that the name of Amazon’s Service is actually “Amazon Appstore,” or at least that Amazon has consciously chosen to cease or minimize the use of “for Android” with its mark, is highly relevant to Apple’s offensive case  [...]  Amazon has steadfastly refused to produce documents and information regarding the use of “for Android” in connection with its service [...] Amazon has failed to produce a witness who can testify regarding the decision not to use “for Android” with the Amazon  Appstore Service outside the context of the Kindle Fire, despite clear evidence that Amazon frequently does not use “for Android” in conjunction with its Service

Apple first filed the lawsuit in March of 2011 after its rival opened “Amazon Appstore for Android” and the two companies have since been locked in procedural squabbles. Amazon argues that the term “app store” is generic. Apple, on the other hand, says the removal of the “for Android” phrase is evidence the term is not generic and is now accusing Amazon of dragging its feet in producing evidence.

Apple, meanwhile, is still trying to obtain an official trademark for “app store,” a process that has been tied up even since Microsoft asked the US Trademark Office to refuse the application. A similar fight is playing out in Europe.

Apple’s attempts to restrict Amazon’s use of “app store” is occurring as the companies appear on a collision course for the same customers. Reports this week suggest that Apple executives regard Amazon’s store as a bigger threat than Google’s store even though it is now much smaller. Apple’s fears may lie in the fact that Amazon’s store has iTunes-like quality control and because Amazon is selling a growing array of tablet devices and is planning to offer a smartphone. A report by Flurry also found that Amazon’s store generated 89 percent of revenue per active user compared to the best performer, Apple’s App Store, putting it well ahead of Google Play.

Despite all the legal action, Apple may be grasping at straws as its legal case for “app store” appears weak. Amazon and other opponents have pointed out that “app” was a word of the year in 2010 and that Steve Jobs reportedly used “app store” in a generic way — much as a person would say “shoe store.”

(Image by Edward Westmacott via Shutterstock)

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The key stat from Flurry’s research is a look at apps that are available in the iTunes App Store, Google Play (formerly known as the Android Market) and Amazon’s Appstore. Not surprisingly, the same app in all three stores makes more money — specifically through in-app purchases — in iTunes, so Flurry used this data as a baseline, setting iOS revenues to be 100%. It turns out that in this situation, Amazon Appstore revenues are 89 percent of iOS revenues, while Google Play yields only 23 percent.

Flurry puts it in dollar terms like this:

Another way to interpret the results is that for every $1.00 an app generates in the iTunes App Store, it generates $0.89 in the Amazon Appstore and $0.23 in Google Play.

These results illustrate two very important trends. First, it may make sense for developers writing Android apps to get them in Amazon’s store sooner rather than later. Second, it shows that making money on Android apps is possible; the same title can make almost as much money as its iOS counterpart. Granted, working with Amazon may not be ideal to some, given that Amazon can set the app price. But giving up that freedom may prove financially beneficial in the long run thanks to Amazon’s constant promotion of mobile apps.

I think that’s part of the success factor here for Amazon apps. For all intents and purposes, these titles are the same Android apps found in Google Play. Google isn’t known as a brand for digital media and apps, however. Instead, it’s commonly considered to be a search company first and everything else second.

Compare that to Amazon, which is a top retail brand around the world: Last year, Amazon’s brand value surpassed that of WalMart to take the top retail brand spot. This mindset, that Amazon is a safe place to purchase digital content — think e-books, music, and video — extends to apps and in-app purchases, even if they’re the same wares found in Google’s store. Clearly, consumers are comfortable with Apple’s brand and store too, so devs may want to focus on iOS and Amazon when it comes to mobile apps.

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Apple’s filing with the U.S. District Court for Northern California argues that the modified use of Amazon’s product name threatens to negatively affect perception of Apple’s brand:

Amazon’s use is also likely to lessen the goodwill associated with Apple’s App Store service and Apple products designed to utilize Apple’s App Store service by associating Apple’s App Store service with the inferior qualities of Amazon’s service.

That’s some mighty fine trash talking on Apple’s part, but the company has to portray the effect of Amazon’s practices as blatantly negative in order to reinforce the legitimacy of its claim. But if the court agrees that Amazon’s decision to de-emphasize the “for Android” portion of the Amazon Appstore name, it may help strengthen its case.

Back in July, a judge ruled that while Apple hadn’t sufficiently established grounds to secure a preliminary injunction, Amazon’s argument that the mark was generic also didn’t fly. Accordingly, any move on Amazon’s part to close the perceived gap between the two probably won’t help Amazon’s case.

It’ll be interesting to see if this indirect volley is just the first attempt on Apple’s part to involve the Kindle Fire in its ongoing legal war against Android devices. Samsung, which is currently the hardware maker best-positioned to challenge Apple in smartphone and tablet sales, met with swift legal response from Apple, and is now facing patent infringement lawsuits in courts around the world. With the Kindle Fire doing well in its early days, might it not be Apple’s next target?

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Yesterday, reports began to emerge that Amazon had quietly launched its appstore internationally. Android users outside the U.S. reported that they were finally able to download appstore apps, in Australia, the Netherlands, India, the UK, Canada, and more countries around the world.

No local Amazon sites have links to the appstore, but the reports indicated that they were able to go through the main site, Amazon.com, to get content through the downloaded Appstore app: up to now, that has had a geo-block for users outside the U.S.

We were curious to try this out, but here in the UK, it hasn’t worked for me, nor for my colleague Robert. We can get the appstore, but no apps. From the looks of it, either Amazon had a temporary loophole on the site (now closed), or was just testing the waters (testing over). Or perhaps there has simply been a significant amount of echo-chamber misreporting going on.

We have contacted Amazon to find out what is going on, and will update this post as we learn more.

Update: Amazon has responded with a typical PR non-response. “We have not announced any plans for international expansion,” a spokesperson wrote in an email. In any event, whatever downloads may have been happening before with the Amazon appstore outside the U.S. are no longer possible.

Getting the appstore usable outside of the U.S. would be an obvious move for Amazon, not just to get more traffic to the service and the developers that have gone through the hoops to post their apps on the store, but also to drive more users to Amazon’s mobile ecosystem. It has been widely reported that Amazon is planning on launching a tablet later this year using a “forked” version of Android, and the more content it can offer users of such devices, the better to keep them using and buying the products.

It’s not clear how much traffic the appstore has had up to now, but in terms of size alone, it is significantly smaller than the wider Android Market: currently there are 16,301 apps on the appstore, compared to the hundreds of thousands of Market apps. Combined with Apple’s App Store, that number is now thought to reach into the million mark.

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Amazon shares application store metrics with developers, which is how Shifty Jelly knows the download figure. Amazon even calculates the app earnings and says that the developer would have earned $54,805.14 based on the 20 percent revenue split it had previously agreed upon. But that figure went out the window once Shifty Jelly agreed to be the featured free software.

Is the exposure worth it?

In fairness to Amazon, the company clearly indicated in writing that by agreeing to be the free app, Shifty Jelly would not earn any revenues from downloads that particular day. According to the developer’s blog, this led to an internal debate over whether to accept the terms or pass.

Since the team had branched out from iOS apps and begun experimenting on Android, it chose to roll the dice. Unfortunately, even with more than 100,000 downloads in a day (and potential reviewers to help build buzz), sales returned back to around normal levels, even as customer support demands rose:

Did the exposure count for much in the days afterwards? That’s also a big no, the day after saw a blip in sales, followed by things going back to exactly where we started, selling a few apps a day. In fact Amazon decided to rub salt in the wounds a little further by discounting our app to 99 cents for a few days after the free promotion. All we got was about 300 emails a day to answer over the space of a few weeks, that left us tired and burnt out.

Again, Amazon didn’t do anything illegal or surprising here; the terms were clear to Shifty Jelly, which accepted them. But the situation highlights two problems in the fast growing mobile economy: discoverability and centralized control.

Look at me! Look at me!

Small development shops have the odds stacked against them when it comes to app discoverability. Without today’s app stores, these folks have to build their own buzz and channel efforts into marketing, when surely most of them would rather be coding. So prominent placement in a store can certainly help. And yes, the storefront owner should collect some “rent” for such placements or promotions.

A revenue-free experiment is simply too much, however. I hit Amazon’s free Android app page daily and often take advantage of it. But the best I can do to actually support the developer is to share news of the app or leave a positive review if the software warrants one. Is that enough?

In Amazon, Shifty Jelly’s Pocket Caster has 233 reviews, averaging 3.5 stars out of five. And yet, according to the company, app sales are right back where they were before the free promotion. Essentially, the company is no better off than before the promo. Amazon, however, has everything to gain and little or nothing to lose by giving such apps away. It has more people coming back daily for free Android apps and it cost nothing to develop or support them. All of the risk is put upon the developers who may or may not come out ahead over time as they seek to have their apps more discoverable.

Devs don’t make the rules

That burden on devs goes beyond financial risk, however; it illustrates the challenges of centralized control by Amazon and others who run app stores. Apple, Amazon, and Google to name a few make the terms, which developers can either agree to or decide to go it alone. But in a sea of software, can developers really afford to independently sell their wares when everyone is shopping in app stores?

Centralized control also brings other dangers, such as waiting for application approval, at least in the case for the iTunes App Store and Amazon’s Appstore, which can take up to two weeks for Amazon, said Shifty Jelly. Amazon has even modified the Pocket Caster description, according to the developer, saying the software can “instantly refresh up to 100 podcasts,” a number the developer claims Amazon simply made up. And although this example is limited to Amazon, a centralized store can even set the price of a third-party app.

Why is Amazon building up the store?

With Amazon reportedly readying an Android tablet of its own, it makes sense for the company to have its own app store to complement the Android-supported MP3 store and Cloud Player software. I like the idea of a more finely curated assortment of Android apps, as well. But terms of the free app of the day are stacked far too much in Amazon’s favor, especially when it might be making money off of actual hardware sales and needs developers for a successful tablet.

The time to tweak Amazon Appstore practices are now; before any such Android tablet arrives. That could help attract even more developers to submit their Android apps, just in time for a hardware launch, making the device more attractive. Unfortunately Shifty Jelly isn’t the only dev that has questioned the value of Amazon’s app store recently. But Amazon has build momentum for its store in anticipation for its future tablet and lure in both consumers and developers.

Why? Because it won’t surprise me if an Amazon-branded Android tablet only allows software from Amazon’s Appstore, and not from the Android Market. Apple’s iOS devices are limited to iTunes App Store and the Barnes & Noble Nook Color has its own app store as well. By building up buzz for its Appstore, Amazon can have more control over the ecosystem and experience. If that’s the case, Amazon should want devs to be happy; not upset that they theoretically lost $54,805.14 in potential sales.

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Sideloading means you can directly install Android apps on the Infuse 4G from sources other than the official Google Android Market; either by downloading an .apk file or using an alternative store, such as Amazon’s AppStore. I was able to successfully install the Amazon AppStore on the Infuse 4G, which confirmed the news.

That’s important, but it also raised a question. When I bump into someone with an Android phone, I often ask if they’re using the Amazon AppStore. Some are AT&T customers, and since the Infuse 4G hasn’t launched yet (it’s available on May 15), these folks can’t get apps from Amazon. But Android owners on other carriers can, yet most of the people I ask aren’t doing so.

I really don’t understand why. Amazon is curating the AppStore, so there aren’t any low-quality, junk titles there. Apps are easy to find. Amazon sets prices, and in some cases, those prices are less than those in the Android Market. Finally, there’s a free app available every day. Essentially, it’s all upside to using Amazon’s store, and it addresses some of the valid criticisms of Google’s Android Market.

Some of the push-back I hear is that people find it inconvenient to use multiple app stores or don’t want to manage apps among them. While I understand that point, I simply don’t get it. It’s certainly not difficult to install the AppStore (a one-time process), nor is it a challenge to tap the AppStore icon to find apps. Apps bought from Amazon can be sent to Android devices over the air via the AppStore website as well. They won’t install automatically like Google’s web-based market, but it’s not a huge inconvenience to open the AppStore and install the apps. And just like the Android Market, all AppStore apps are tied to an account, not a device. That means owners of multiple Android devices can easily install their apps; buy them once and install them on multiple smartphones or tablets.

Having said all that, perhaps I’m missing out on the big barrier to Amazon’s AppStore. If you’re an Android owner, tell me in the comments why you’re not using Amazon’s software service and consider voting in this simple poll.

I’m just trying to figure out if I’m asking the wrong people about Amazon’s AppStore. Are more people taking advantage of Amazon’s effort? If you’re not now, I suspect you soon will be – maybe on an Amazon tablet, since it’s a pretty safe bet we’ll see one in the second half of the year.

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It’s not surprising that Amazon is trying to work deals with both carriers and handset makers to get its AppStore pre-installed on phones. But the contrary scenario is intriguing: Amazon launched its mobile storefront without any news of pre-installation deals. Instead, the company announced the news on its website, along with up to eight steps for installation. While the process to install Amazon’s AppStore isn’t difficult, the company will have far more sales success if it can work deals to get the AppStore pre-installed and even featured, if possible.

Most Android phones already come with the Amazon MP3 store installed, making it an easy process to buy music directly on the handset. With the recent addition of Amazon’s Cloud Player functionality to the MP3 app, Android owners can stream music from the cloud to their phone as well. The key is getting such software on the handsets in advance, and Amazon knows this. Watch for more phones to include Amazon’s AppStore as a result.

Ironically, the best part of the new storefront may be on the web, and not on handsets at all. Just as I do each morning to see what MP3 album is on sale at Amazon, I’m now hitting the AppStore website for the free daily Android app. This week alone, I’ve installed several no-cost apps to my Android handset that would have set me back me at least $10 in total. Amazon also includes a unique “test drive” feature that simulates a virtual Android phone online so software can be tried before purchase.

But trying and buying software is only half of the fun. Once the AppStore is set up on a device, you can simply buy an app on Amazon’s website and the software will automatically install itself the next time you open the AppStore on the handset. This over-the-air delivery method rivals Google’s own Android Market web store and makes it easier to discover and install applications on Android phones.

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