Could Kindle Fire Be Amazon's iPod?

by Steve Smith, Feb 23, 2012, 11:33 AM

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While the Amazon Android Appstore has been online since the middle of last year, in recent months the introduction of the Amazon Kindle Fire has lit up activity. According to app tracker Distimo, downloads of the top 100 items from the Amazon app market increased by 14x in December compared to two months earlier.

In fact, while some recent reports suggest that Amazon is planning a 10-inch tablet because the 7-inch model didn’t sell quite as well as expected, it is clear that the Fire has had a demonstrable effect on the Android ecosystem already. In much of the early 2000s, Apple’s iPod success had the ancillary effect of acquainting users with Apple design, operating systems and ways of doing things. I wonder if the Kindle Fire is Amazon’s iPod, in that it attracts new and existing Android owners to its app store and ultimately gets them used to Amazon’s pretty seamless cross-platform commerce engine.

This is good news not only for Amazon, but for the entire Android app economy. Distimo found that 42 of 110 paid apps it tracked in both Android’s own Marketplace and Amazon’s store were selling more in Amazon’s. In fact, Amazon was responsible for 28% of the income for those apps. Most of the top-selling paid apps in Amazon’s store are fairly common across smartphone markets, including Angry Birds, Cut the Rope and Plant vs. Zombies.

Amazon’s remarkable and quick-won strength in the Android ecosystem speaks not only to the volume of Kindle Fires that are likely in the market, but also to the power of frictionless purchase. Kindle Fire enjoys much the same seamless integrated microtransaction system as Apple’s. Since all Kindle owners have accounts with Amazon, purchasing any app is a one-tap transaction.

Amazon’s select library of apps also tends to favor paid models. For the last seven months of 2011, Distimo tracked about 63%-65% of apps in the Amazon store using an upfront paid model, while the Android Marketplace has about 32%.

Half of the apps in the Amazon Appstore are also available in the Google Android Marketplace, and Amazon is catching up to the massive volume of new apps in Google’s store. While 368,985 apps are in the Google-hosted library, Amazon’s is at 26,826 as of January. But new apps are being added to Amazon’s store at 4.7X the rate of new apps to Google’s.

For developers, Amazon may well be offering them a model more attractive than in Google’s store. The bookseller is providing seamless purchase, a less cluttered app environment (for now) and smart merchandising. The Kindle Fire owner (smartphone owners, too) is offering a promotional offer of a paid app for free each day.

The company is also leveraging the remainder of its recommendation engine system to surface apps. In my standard Amazon Web view from the desktop, for instance, the recommendations now weave into the mix apps based on my prior purchases. I tap a 1-click buy button and the app just shows up in my device.

One has to wonder how many Kindle owners who also happen to have Android smartphones might be prompted to use the Amazon appstore for their phones as well. Amazon is rumored to be working on its own branded phones. Having a well-stocked store of apps that also attract developers who see the revenue potential here is a step in the right direction.

The Fire, along with the app and video markets Amazon built for them, could be an iPod-like entryway for consumers into Bezosland.

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