Amazon has targeted the mobile application space with the creation of its own Amazon Marketplace, has locked in some exclusive deals with Android application developers to move profits out of Google and into Amazon, and it now might be creating its own tablet device that will squarely point users directly back to Amazon.
Amazon is clearly signaling its intentions that might as well be considered a nuclear first strike, so how will it respond? To win a fight, you have to first admit you are in one. Google has a limited opportunity to successfully apply some high-impact tactics to take control of the fight. They could, for instance, court the developers by dropping the market fees dramatically, creating a better QA filter on the Market, doing a much better and more transparent job of promotion for top-quality applications, etc., in other words, addressing all of the concerns that developers have.
They could make the Marketplace the most lucrative place for developers to deploy to, making those developers who made exclusive deals with Amazon wish they had never signed on the dotted line. That would be a painful experience for, perhaps, but I suspect not as painful as a later-stage fight.
Market platforms
If, on the other hand, it dismisses the threat and simply sits back and watches, then all things being equal, developers will deploy to any market platforms without prejudice, and that means Amazon will probably win or at least tie, which is about the same. You might think that would be highly tuned into this, but there are hundreds of cases where the giant sits back and yawns while Jack raids the place. So while it seems unlikely, there are precedents for Amazon to win vs. the owner of the platform.
Hearts and Minds, Amazon has something that the Market doesn’t. Namely, a few hundred million users that love its single point of contact, trusted, high-quality brand. Amazon’s users (just not the Kindle owners ) can be cross-promoted, and more importantly, these people are used to paying for things, vs. just getting them for free.
Total Customers
Savvy developers will quickly figure out which market pays more and try and move their user base to that market. Developers care about market penetration or profits, depending on their own strategies. Which means that they prioritize by a few simple metrics: Total Customers, which market sells Downloads of my product? Which market has the better profit-sharing deal? Air Time: Are my applications getting a fair shot in front of users
Symbiotic relationship
While consumers make the final decisions, both of these companies should take a page from Microsoft’s success and realize that Developers and Customers are in a symbiotic relationship; without one, the other is useless. You have to keep both sides of the pipe happy to make that lucrative brokerage grow.
If I had to guess, I would say that they will be slow to respond because they won’t take this as seriously as they should, which will give Amazon some time to make this all happen. Once finally realizes it’s in a real fight, it will start swinging wildly, and Amazon will be ready and take things up a notch. Apple, of course, will sit back and reap the rewards if that happens.
Marketplace initiative
Market Wars, Map Wars, Device Wars, Social Wars, it almost feels like. In Part 3, I will give an overview of the new Android Marketplace initiative that addresses a few of the key shortcomings of the current market
