Amazon is rapidly evolving into a digital content business, an aspect of the company that is highlighted by the success of the Amazon Kindle and its recent transition in to the MP3 download market.
Mobile apps play a big part in the digital content world and Amazon is looking to capitalise on this by launching an Android app store.
This has caused some controversy, as a today’s post on Econsultancy revealed;
Although developers submitting their apps to the store will be able to set a suggested retail price for the apps, it will be Amazon that ultimately decides the price of the software.
Technologizer‘s Ed Oswald explains:
Developers would still get to say what they’d like to sell their application for, an MSRP if you will. But Amazon does not guarantee that’s what its customers will pay. Instead, the retailer may choose to sell the app at a discount — just like Amazon does for other items on its site — or even give it away for free.The developer would receive 70% of the selling price, or 20% of the MSRP, whichever is greater.
So for example if a developer wants $5 for his or her app, but Amazon sells it for $3, the developer gets $2.10. If Amazon decides it wants to charge nothing for it for whatever reason, the commission drops to $1
Oswald calls this a “raw deal for Android developers“.
But is it?
On one hand it could have serious consequences for developers, who may be forced to match Amazon’s price for the apps on other platforms should the company decide to sell them for a lower amount.
But on the other hand, pricing products, including mobile apps is a very difficult process. The right product at the wrong price can be just as unsuccessful as the wrong product at the wrong price.
Amazon, of course, has some expertise in the area of pricing – and probably more so than the average developer. So in theory, through intelligent pricing should help attract more sales.
Still, despite the size of Amazon’s brand and its huge success, there’s no guarantee that it will become a successful player in the mobile app space.
However, Amazon does have two big things going for it with its app store. Android has a lot of momentum at the moment, and Google’s Android Marketplace has left developers with a lot to be desired commerce-wise.
