5 ms·

Amazon owning app distribution is irrelevant

55 points by avichal 15y ago

b0sk 15y ago
Seems to be a fitting reply to Marco's post.
strandev 15y ago
Maybe third party devs care a lot about who owns app distribution.
- avichal 15y ago
  Unfortunately third party developers will have to play in whichever app store ends up winning on a platform. The only real leverage we have is en masse, and that kind of growth/death in a developer ecosystem tends to take a long time to play out.
ChrisLTD 15y ago
Good post. None of the parties mentioned, Apple, Google or Amazon really care about owning app distribution. It's something they do to increase the desirability of their devices. Apple does it so they can sell more iDevices, Google does it so more people want to buy Android devices and see their ads, Amazon does it because they want people to have Kindles to buy their other digital goods. ---- Not that this is likely, but I don't think Google would be happy if Amazon took over app distribution. They wouldn't want another company in the middle that could dictate terms to Google. Remember how for a while it looked like Apple was going to banish Google ads from iOS apps.
- deleted 15y ago
  [deleted]
ajg1977 15y ago
This post is rather naive and shortsighted. Google is a search company. Owning the platform is Google’s way of making sure they own search. Google does not care about facilitating app sales because they can make 15-30x the money from search. Google benefits from owning the platform because the Google suite of software (AppStore, Browser, Mail, Maps), bundled on almost every Android device, drives search traffic to Google and encourages users to stay within the Google ecosystem. Most Android OEM's are effectively forced to carry this software (and meet 'compatibility requirements' such as Google being the default search engine) because without it their devices are far less compelling. Replacing an email client is a solvable problem, a maps alternative is something that could be licensed, but creating an entire AppStore replacements is unrealistic for most companies. Unless you are Amazon. If the Amazon AppStore becomes a major player in the Android app market, and OEM's choose to license it, thus forgoing the Google software suite (most of which is much easier to replace), Google will be in serious risk of losing their leverage over OEM's. They will not be able to ensure Android devices drive users to their services, and could even end up paying OEM's (a'la Mozilla) to have Google as the default search option on these devices.
- georgemcbay 15y ago
  I don't disagree with your premise, but the killer feature for me on a device with the full "gapps" suite is Google Navigation (the full Maps + turn by turn), not the Market, and it would be far more difficult for anyone to replicate Google Nav than it would be to replicate the Market, IMO. Of course, Nav is more relevant to phones than tablets, but I wouldn't even consider any Android phone that didn't have Google Nav.
- avichal 15y ago
  Apps are easy to replace, the web is not. Google thrives in a massively fragmented world because that's where search matters. Google dies in a single platform world owned by Apple. Fragmentation makes developers' lives more difficult, makes users' lives more makes difficult, but drives people to the web as a unifying platform. Google's cost of customer acquisition may go up in the short term, but Google still makes all of the money from search at the end of the day.
  - Xuzz 15y ago
    I would agree, except that Google itself has said that over 60% of their mobile traffic comes from iOS. [1] [1]: http://9to5mac.com/2011/09/21/google-23rds-of-our-mobile-search-comes-from-apples-ios/ http://9to5mac.com/2011/09/21/google-23rds-of-our-mobile-sea...
    - avichal 15y ago
      Great link. Not surprising actually, considering the demographics of iOS users and that iOS includes iPod Touch and iPad. Google usually talks Android numbers vs. iPhone. Apple usually talks about total iOS devices and often emphasizes the install base since they were out first and built a 100 million device install base before Android even launched. In this case, it's in Google's interest to talk about total iOS install base so that's what they did, even though they don't really compete with the iPod Touch directly.
      - bishnu 15y ago
tptacek 15y ago
I'm not sure the author really understands the point that's being made about Amazon's "ownership" of Android app distribution. The concern is straightforward: 1. Amazon is --- probably, and for the next 18 months or so --- going to have the most popular Android tablet on the market. 2. Amazon does not provide mainstream users with access to Google's Android Market. 3. Android developers are going to be compelled to deliver software to Amazon users, because Amazon is going to supply a plurality of the entire addressable market for Android apps. 4. To supply Amazon users with Android apps, developers have to use the Amazon market. 5. Not only will developers need to use the Amazon market to address Amazon customers, but off-brand Android users can (and may) also end up relying on Amazon's market. Google's Android Market is structurally disadvantaged. And, simply having to sell through Amazon is already a hardship for developers; Amazon has policies that developers are going to have to comply with, even though those policies aren't inherent to the Android ecosystem. Saying that Google doesn't have to care about native apps, that the web is where it's at, that they're "skating to where the puck is going to be" --- that's all besides the point. The concern is specifically about the Android app ecosystem. If you don't think it matters that Amazon is redefining that ecosystem, well, OK, but that doesn't make it not a concern.
- ryanhuff 15y ago
  The resulting fragmentation along device type is the biggest problem for developers. Google is trying hard to unify the phone and tablet, but Amazon is throwing a wrench into that strategy. Amazon can dictate the terms of Android tablet app distribution, further complicating matters for Android developers.
  - fpgeek 15y ago
    Considering that Ice Cream Sandwich addresses most of the negatives from early Kindle Fire reviews (e.g UI lags, disappointing browser, screenshots, etc.), I don't think Amazon's "wrench" is going to last that long. At least one tech journalist has claimed that they have a source that says Amazon is already working on the Fire's ICS upgrade.
    - 15y ago
rbarooah 15y ago
Google is a search company. Owning the platform is Google’s way of making sure they own search. Google does not care about facilitating app sales because they can make 15-30x the money from search. It's interesting that an ex Googler who implies this is based on inside knowledge would say this. It illustrates how different their priorities from Apple, who care about 3rd Party developers because they provide key differentiation that adds value to the hardware. Google's approach leaves differentiation to the individual manufacturers, so the manufacturers have an incentive to want distinctive software on their hardware. That's why we see the motoblur, sense, etc. I suspect Samsung would love to operate their own App store, but of course they can't because they'd lose Google's support.
- nl 15y ago
  I suspect Samsung would love to operate their own App store, but of course they can't because they'd lose Google's support. Samsung runs their own Appstore. So do most carriers (and NVidia has one especially for Tegra devices). Google doesn't care, and most developers ignore them because the Google Market is where the action is. (In Amazon's case it is different because the Google Market isn't installed)
  - rbarooah 15y ago
    So both stores ship on Samsung's devices? Then I'd guess Samsung would probably be interested in not shipping the Google Market. I wonder what would happen if Samsung paid for an exclusive on a big name title - e.g. a future Angry Birds
    - fpgeek 15y ago
      So far, Samsung's exclusives are more about special features / APIs (like apps that use the Galaxy Note's pen).
BenoitEssiambre 15y ago
If Amazon didn't care about owning app distribution, they would include the Android Market on their devices to make them more desirable to customers. They wouldn't have put the efforts in convincing me to put my apps in their store while imposing draconian terms (even worst than Apple!) where they control the prices developers' apps are sold. They wouldn't give away apps to get people to use their store. Amazon goes as far as using writers to rewrite the descriptions of all apps before they are put up in their store. That is not the behavior of a company that doesn't care about app distribution.
- avichal 15y ago
  Amazon needs an icon on the Kindle Fire that says "store." They want to use this as a gateway to get you to go to Amazon.com and buy all sorts of other things besides apps. Google is making a push in music and video (through YouTube), which is starting to tred on Amazon's territory and core businesses. Amazon can't cede the entry point to the store to someone else. They want to own that entry point, and that will be an icon on your tablet's home screen that says "store."
kinofcain 15y ago
"Amazon does not care about app sales" Amazon would have to be blind to their own success selling one type of virtual good to kindle owners for them to not care about selling another type of virtual good to kindle owners. As others have pointed out, the fact that they went through the trouble of building their own App Store proves they care deeply about app sales. What's more, the low margins on the kindle fire prove they not only care about app sales (and book sales, and movie sales, and music sales), they're relying on them.
- avichal 15y ago
  Amazon will do very well on digital goods sales. But apps are actually a small chunk of dollars in the grand scheme of things -- especially on tablets. Amazon is going to recoup their costs through additional commerce on Amazon.com. That's what people use tablets for and it's a massive market that Amazon actually has leverage in. It's a very calculated move to build a tablet first and not a phone. The real target is driving more sales on Amazon.com
  - cageface 15y ago
    But apps are actually a small chunk of dollars in the grand scheme of things -- especially on tablets. I think it's important to keep this in mind. As successful as Apple's app store has been, 1 billion in profit is still relatively small potatoes. Android's significant outpacing of Apple in sales despite a much weaker app market underlines this.
- r00fus 15y ago
  > What's more, the low margins on the kindle fire s/low/negative/ They are betting their entire tablet strategy on by losing money on each hardware sale. Can someone tell me why this isn't considered dumping [1]? [1] http://en.wikipedia.org/wiki/Dumping_(pricing_policy) http://en.wikipedia.org/wiki/Dumping_(pricing_policy)
  - avichal 15y ago
    It's not dumping because it's not Amazon doing predatory pricing across geographies. It's subsidization. They're subsidizing the cost of the hardware to drive sales on Amazon.com
rbarooah 15y ago
I'd say Apple cares about owing app distribution because it provides the differentiation that increases the desirability of their devices. Without distinctive software, Apple doesn't really have anything that can't be quickly knocked off. Google doesn't care about owning app distribution because they don't make money out of devices so differentiation is a problem they leave to the manufacturers. They just want to make sure Apple doesn't end up owning enough of the mobile space to threaten Google's ad business. Amazon cares about owning app distribution because retail distribution is what Amazon does. As the retail of digital goods displaces the retain of physical goods, Amazon seeks to establish its position in the delivery chain, or risk losing out.
jyap 15y ago
Yeah, this is a very poorly written article filled with bad assumptions mostly based on the current status quo. Firstly the author is taking things too far by comparing the number of Android phones with tablets. Amazon doesn't have an Android phone. But they will most likely have the best selling Android tablet. And the argument is they may own the Android tablet market which gives them tremendous leverage. "Google does not care about facilitating app sales because they can make 15-30x the money from search." Here's he's taking the overall figure for all of Google's search revenue and just applying it to Android. That's not a fair comparison to app revenue. And assuming that Search Revenue > App Revenue, therefore Google does not care. "Google clearly believes that the web will win out in the long term and native apps are a stop-gap, " ... Yeah, that's a big assumption based on a world before native apps. "Amazon does not care about app sales... Kindle Fire is about selling more digital content and facilitating e-commerce" Except apps are digital content and are a huge growth market.
- avichal 15y ago
  Thanks for taking the time to respond. Android 4.0 and beyond is designed to run on both tablets and phones. From Google’s perspective they are gateways to search so it’s completely reasonable to compare them to each other. From Amazon’s perspective the user behavior around commerce is very different, which is why they’re going after tablets first. There are rumors they will build a phone later as well. I’m not applying the overall search numbers to Android. I’m saying that the amount of money they make off of Android pales in comparison to what they make off search today and what they will make off of mobile search in the future. App sales are going to be tiny compared to mobile search revenue (especially if Google believes that the web will win out in the long run). Yes, Amazon would love to sell more digital content — apps included. The gross margins would be awesome for a retailer, so it’s clearly enticing for them. But most of the transaction volume flowing through tablets is not going to be in apps. It’s going to be in traditional e-commerce. As I said in the post, the apps will be an awesome secondary revenue source for them. But what they really want are all of the e-commerce transactions for electronics, movies, ebooks, clothing, jewelry, and everything else that Amazon sells. Put it this way -- getting you to buy 1 item of jewelry through Amazon.com will be more profit than they'll get from all of the apps you buy over the life of the Fire.
deleted 15y ago
[deleted]
zmmmmm 15y ago
I think Amazon embracing Android is great for Google in every respect. Primarily because as long as the underlying platform doesn't branch too far away, every dev who makes something for the Amazon app store is almost certainly going to also make it for the Android Market. That means a huge boost to the interest in making tablet friendly apps for Android and a huge boost to the potential return from making an Android port (or an Android exclusive app) for a developer. But also it is great for Google because it validates all their arguments about Android being an "open" operating system and will keep allegations of things like anti-trust and other potential criticisms of Google's role significantly muted.

55 points by avichal 15y ago

b0sk 15y ago

Seems to be a fitting reply to Marco's post.

strandev 15y ago

Maybe third party devs care a lot about who owns app distribution.

avichal 15y ago
Unfortunately third party developers will have to play in whichever app store ends up winning on a platform. The only real leverage we have is en masse, and that kind of growth/death in a developer ecosystem tends to take a long time to play out.

ChrisLTD 15y ago

Good post. None of the parties mentioned, Apple, Google or Amazon really care about owning app distribution. It's something they do to increase the desirability of their devices. Apple does it so they can sell more iDevices, Google does it so more people want to buy Android devices and see their ads, Amazon does it because they want people to have Kindles to buy their other digital goods. ---- Not that this is likely, but I don't think Google would be happy if Amazon took over app distribution. They wouldn't want another company in the middle that could dictate terms to Google. Remember how for a while it looked like Apple was going to banish Google ads from iOS apps.

deleted 15y ago
[deleted]

ajg1977 15y ago

This post is rather naive and shortsighted. Google is a search company. Owning the platform is Google’s way of making sure they own search. Google does not care about facilitating app sales because they can make 15-30x the money from search. Google benefits from owning the platform because the Google suite of software (AppStore, Browser, Mail, Maps), bundled on almost every Android device, drives search traffic to Google and encourages users to stay within the Google ecosystem. Most Android OEM's are effectively forced to carry this software (and meet 'compatibility requirements' such as Google being the default search engine) because without it their devices are far less compelling. Replacing an email client is a solvable problem, a maps alternative is something that could be licensed, but creating an entire AppStore replacements is unrealistic for most companies. Unless you are Amazon. If the Amazon AppStore becomes a major player in the Android app market, and OEM's choose to license it, thus forgoing the Google software suite (most of which is much easier to replace), Google will be in serious risk of losing their leverage over OEM's. They will not be able to ensure Android devices drive users to their services, and could even end up paying OEM's (a'la Mozilla) to have Google as the default search option on these devices.

georgemcbay 15y ago
I don't disagree with your premise, but the killer feature for me on a device with the full "gapps" suite is Google Navigation (the full Maps + turn by turn), not the Market, and it would be far more difficult for anyone to replicate Google Nav than it would be to replicate the Market, IMO. Of course, Nav is more relevant to phones than tablets, but I wouldn't even consider any Android phone that didn't have Google Nav.
avichal 15y ago
Apps are easy to replace, the web is not. Google thrives in a massively fragmented world because that's where search matters. Google dies in a single platform world owned by Apple. Fragmentation makes developers' lives more difficult, makes users' lives more makes difficult, but drives people to the web as a unifying platform. Google's cost of customer acquisition may go up in the short term, but Google still makes all of the money from search at the end of the day.
- Xuzz 15y ago
  I would agree, except that Google itself has said that over 60% of their mobile traffic comes from iOS. [1] [1]: http://9to5mac.com/2011/09/21/google-23rds-of-our-mobile-search-comes-from-apples-ios/ http://9to5mac.com/2011/09/21/google-23rds-of-our-mobile-sea...
  - avichal 15y ago
    Great link. Not surprising actually, considering the demographics of iOS users and that iOS includes iPod Touch and iPad. Google usually talks Android numbers vs. iPhone. Apple usually talks about total iOS devices and often emphasizes the install base since they were out first and built a 100 million device install base before Android even launched. In this case, it's in Google's interest to talk about total iOS install base so that's what they did, even though they don't really compete with the iPod Touch directly.
    - bishnu 15y ago

tptacek 15y ago

I'm not sure the author really understands the point that's being made about Amazon's "ownership" of Android app distribution. The concern is straightforward: 1. Amazon is --- probably, and for the next 18 months or so --- going to have the most popular Android tablet on the market. 2. Amazon does not provide mainstream users with access to Google's Android Market. 3. Android developers are going to be compelled to deliver software to Amazon users, because Amazon is going to supply a plurality of the entire addressable market for Android apps. 4. To supply Amazon users with Android apps, developers have to use the Amazon market. 5. Not only will developers need to use the Amazon market to address Amazon customers, but off-brand Android users can (and may) also end up relying on Amazon's market. Google's Android Market is structurally disadvantaged. And, simply having to sell through Amazon is already a hardship for developers; Amazon has policies that developers are going to have to comply with, even though those policies aren't inherent to the Android ecosystem. Saying that Google doesn't have to care about native apps, that the web is where it's at, that they're "skating to where the puck is going to be" --- that's all besides the point. The concern is specifically about the Android app ecosystem. If you don't think it matters that Amazon is redefining that ecosystem, well, OK, but that doesn't make it not a concern.

ryanhuff 15y ago
The resulting fragmentation along device type is the biggest problem for developers. Google is trying hard to unify the phone and tablet, but Amazon is throwing a wrench into that strategy. Amazon can dictate the terms of Android tablet app distribution, further complicating matters for Android developers.
- fpgeek 15y ago
  Considering that Ice Cream Sandwich addresses most of the negatives from early Kindle Fire reviews (e.g UI lags, disappointing browser, screenshots, etc.), I don't think Amazon's "wrench" is going to last that long. At least one tech journalist has claimed that they have a source that says Amazon is already working on the Fire's ICS upgrade.
  - 15y ago

rbarooah 15y ago

Google is a search company. Owning the platform is Google’s way of making sure they own search. Google does not care about facilitating app sales because they can make 15-30x the money from search. It's interesting that an ex Googler who implies this is based on inside knowledge would say this. It illustrates how different their priorities from Apple, who care about 3rd Party developers because they provide key differentiation that adds value to the hardware. Google's approach leaves differentiation to the individual manufacturers, so the manufacturers have an incentive to want distinctive software on their hardware. That's why we see the motoblur, sense, etc. I suspect Samsung would love to operate their own App store, but of course they can't because they'd lose Google's support.

nl 15y ago
I suspect Samsung would love to operate their own App store, but of course they can't because they'd lose Google's support. Samsung runs their own Appstore. So do most carriers (and NVidia has one especially for Tegra devices). Google doesn't care, and most developers ignore them because the Google Market is where the action is. (In Amazon's case it is different because the Google Market isn't installed)
- rbarooah 15y ago
  So both stores ship on Samsung's devices? Then I'd guess Samsung would probably be interested in not shipping the Google Market. I wonder what would happen if Samsung paid for an exclusive on a big name title - e.g. a future Angry Birds
  - fpgeek 15y ago
    So far, Samsung's exclusives are more about special features / APIs (like apps that use the Galaxy Note's pen).

BenoitEssiambre 15y ago

If Amazon didn't care about owning app distribution, they would include the Android Market on their devices to make them more desirable to customers. They wouldn't have put the efforts in convincing me to put my apps in their store while imposing draconian terms (even worst than Apple!) where they control the prices developers' apps are sold. They wouldn't give away apps to get people to use their store. Amazon goes as far as using writers to rewrite the descriptions of all apps before they are put up in their store. That is not the behavior of a company that doesn't care about app distribution.

avichal 15y ago
Amazon needs an icon on the Kindle Fire that says "store." They want to use this as a gateway to get you to go to Amazon.com and buy all sorts of other things besides apps. Google is making a push in music and video (through YouTube), which is starting to tred on Amazon's territory and core businesses. Amazon can't cede the entry point to the store to someone else. They want to own that entry point, and that will be an icon on your tablet's home screen that says "store."

kinofcain 15y ago

"Amazon does not care about app sales" Amazon would have to be blind to their own success selling one type of virtual good to kindle owners for them to not care about selling another type of virtual good to kindle owners. As others have pointed out, the fact that they went through the trouble of building their own App Store proves they care deeply about app sales. What's more, the low margins on the kindle fire prove they not only care about app sales (and book sales, and movie sales, and music sales), they're relying on them.

avichal 15y ago
Amazon will do very well on digital goods sales. But apps are actually a small chunk of dollars in the grand scheme of things -- especially on tablets. Amazon is going to recoup their costs through additional commerce on Amazon.com. That's what people use tablets for and it's a massive market that Amazon actually has leverage in. It's a very calculated move to build a tablet first and not a phone. The real target is driving more sales on Amazon.com
- cageface 15y ago
  But apps are actually a small chunk of dollars in the grand scheme of things -- especially on tablets. I think it's important to keep this in mind. As successful as Apple's app store has been, 1 billion in profit is still relatively small potatoes. Android's significant outpacing of Apple in sales despite a much weaker app market underlines this.
r00fus 15y ago
> What's more, the low margins on the kindle fire s/low/negative/ They are betting their entire tablet strategy on by losing money on each hardware sale. Can someone tell me why this isn't considered dumping [1]? [1] http://en.wikipedia.org/wiki/Dumping_(pricing_policy) http://en.wikipedia.org/wiki/Dumping_(pricing_policy)
- avichal 15y ago
  It's not dumping because it's not Amazon doing predatory pricing across geographies. It's subsidization. They're subsidizing the cost of the hardware to drive sales on Amazon.com

rbarooah 15y ago

I'd say Apple cares about owing app distribution because it provides the differentiation that increases the desirability of their devices. Without distinctive software, Apple doesn't really have anything that can't be quickly knocked off. Google doesn't care about owning app distribution because they don't make money out of devices so differentiation is a problem they leave to the manufacturers. They just want to make sure Apple doesn't end up owning enough of the mobile space to threaten Google's ad business. Amazon cares about owning app distribution because retail distribution is what Amazon does. As the retail of digital goods displaces the retain of physical goods, Amazon seeks to establish its position in the delivery chain, or risk losing out.

jyap 15y ago

Yeah, this is a very poorly written article filled with bad assumptions mostly based on the current status quo. Firstly the author is taking things too far by comparing the number of Android phones with tablets. Amazon doesn't have an Android phone. But they will most likely have the best selling Android tablet. And the argument is they may own the Android tablet market which gives them tremendous leverage. "Google does not care about facilitating app sales because they can make 15-30x the money from search." Here's he's taking the overall figure for all of Google's search revenue and just applying it to Android. That's not a fair comparison to app revenue. And assuming that Search Revenue > App Revenue, therefore Google does not care. "Google clearly believes that the web will win out in the long term and native apps are a stop-gap, " ... Yeah, that's a big assumption based on a world before native apps. "Amazon does not care about app sales... Kindle Fire is about selling more digital content and facilitating e-commerce" Except apps are digital content and are a huge growth market.

avichal 15y ago
Thanks for taking the time to respond. Android 4.0 and beyond is designed to run on both tablets and phones. From Google’s perspective they are gateways to search so it’s completely reasonable to compare them to each other. From Amazon’s perspective the user behavior around commerce is very different, which is why they’re going after tablets first. There are rumors they will build a phone later as well. I’m not applying the overall search numbers to Android. I’m saying that the amount of money they make off of Android pales in comparison to what they make off search today and what they will make off of mobile search in the future. App sales are going to be tiny compared to mobile search revenue (especially if Google believes that the web will win out in the long run). Yes, Amazon would love to sell more digital content — apps included. The gross margins would be awesome for a retailer, so it’s clearly enticing for them. But most of the transaction volume flowing through tablets is not going to be in apps. It’s going to be in traditional e-commerce. As I said in the post, the apps will be an awesome secondary revenue source for them. But what they really want are all of the e-commerce transactions for electronics, movies, ebooks, clothing, jewelry, and everything else that Amazon sells. Put it this way -- getting you to buy 1 item of jewelry through Amazon.com will be more profit than they'll get from all of the apps you buy over the life of the Fire.

deleted 15y ago

[deleted]

zmmmmm 15y ago

I think Amazon embracing Android is great for Google in every respect. Primarily because as long as the underlying platform doesn't branch too far away, every dev who makes something for the Amazon app store is almost certainly going to also make it for the Android Market. That means a huge boost to the interest in making tablet friendly apps for Android and a huge boost to the potential return from making an Android port (or an Android exclusive app) for a developer. But also it is great for Google because it validates all their arguments about Android being an "open" operating system and will keep allegations of things like anti-trust and other potential criticisms of Google's role significantly muted.