For Some Developers, Amazon Appstore Now Brings In More Money

In the latest monthly report from app analytics firm Distimo, the company delved into the revenue generating possibilites for apps sold through both Google’s Android Market and the Amazon Appstore. Looking at the top 110 apps available in both marketplaces, Distimo found some surprising data: 42 of those top apps made more money on Amazon’s store than in the more widely available Android Market.

That the Android Market has its challenges when it comes to paid applications, is widely known. In fact, just the other day a friend was telling me how when she went to buy her first new smartphone, the Verizon rep was pushing Android devices because they “have more free apps” than the iPhone. Great story, right developers? Now the Android Market’s inability to make you money is a selling point for Android phones. Excellent news.

So maybe it’s not so surprising that Amazon’s Appstore is beginning to prove itself as a better revenue generating platform for some mobile application developers than the official Android Market. After all, Amazon’s store is a “curated” collection of apps. The apps are tested, reviewed and made sure to be malware-free and stable before being listed on Amazon’s store. (Hmm. Does that process sound familiar?)

Still, the Amazon Appstore is only a small piece of the overall revenue pie for now, delivering just 28% of the top 110 apps’ revenue. But then again, Amazon’s Appstore is barely a year old, and is rapidly gaining strength. For example, the total number of downloads generated by the top 100 apps in the Amazon Appstore increased 14-fold in December 2011, compared with just 2 months earlier, Distimo found.

Today, Amazon hosts 28,826 mobile applications, compared with about fourteen times more apps on the Google Android Market. (It’s now pushing 400K+). Half of all Amazon’s apps are also available on the Google Android Market. But the Amazon market is catching up in terms of size. In December and January, the number of new apps in the Android Market was only 5x the number new apps in the Amazon Appstore, as compared with 22x in September 2011.

The Amazon Appstore is also more likely to favor paid applications than the Android Market, as 65% of all its apps are paid apps, a figure that has remained stable for the past 7 months. Meanwhile, Google’s Android Market sees 32% of all apps as paid apps, and that figure has dropped from 38% during the same time frame.

In addition, the average price for the top 100 paid applications is 40% lower on the Amazon Appstore ($2.89) than on the Android Market ($3.47) for the top 100 paid apps. That’s because Amazon, not developers, controls the apps’ prices. That means some of the discounted top apps could be bringing down the average, of course.

This pricing strategy appears, at least in some cases, to be working in developers’ favor. Users think they can find cheap apps on Android’s store, and aren’t disappointed. But while there, they download other apps, too.

Download volumes on Amazon’s store during November (when the Kindle Fire launched) quadrupled from the previous month. In December, downloads increased even further to more than 14 times October’s volume, then stabilized once again in January. During this time, 42 of the top 110 revenue-generating apps made more money on Amazon’s store than on the Android Market. It’s not a majority, obviously, and information about what types of apps, or what these apps may have shared in common, are details that are unfortunately lacking in Distimo’s analysis.

But this is the real gem in Distimo’s data: for some developers, Amazon’s Appstore is working. It’s too soon to call the success a fluke or a trend, especially with the Kindle Fire’s new(ish) arrival on the scene. But if Amazon is helping some developers make more money, it’s probably not due to a single, easily pinpointed reason. It’s more likely to be a combination of all factors: app curation, discounts, catalog size, promotions, user interface, brand recognition, price setting, and more.