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Amazon Launches the Appstore Developer Portal

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Amazon has announced the launch of the Appstore Developer Portal preparing the way for the upcoming Appstore for Android. The model used is different than Google’s Marketplace both regarding the review process and setting up the application price.

Amazon intends to enter the application market by adding a new category, called Appstore, to its online web store. When it launches, the Appstore will contain Android applications, but applications built for other platforms may be added in the future. For the beginning, Amazon has launched the Appstore Developer Portal, a website used by developers to upload their apps to be sold on Amazon.

The Amazon Appstore comes on the heels of Google’s Android Marketplace in an attempt to get a share  in the growing mobile application market, and they come with a selling model that is more similar to Apple’s App Store. Google allows anyone to set up an account, to load and to start selling applications. They do not check the application first, to see if the content is appropriate or not, or if the application is of good or poor quality. They do take an application off the shelves if it is found trespassing some policies, such as containing sexually explicit material, hate speech, gambling, etc.. Like Apple, Amazon will review the applications first, then allow them to be published upon approval. This will introduce a delay in the process of selling an app, and Amazon says it will be up to a week. The procedure will also have an impact on updating applications, especially when it comes to bug fixes, because they will have to go through the same process again. Amazon claims that the application review is meant to create a good experience using the app and to make sure it does not attempt to impair the device:

Our goal is for Amazon Appstore customers to have a good experience with every app they buy from the Appstore. As a result, we will be testing the apps you submit prior to making them available in our store to verify that each app works as outlined in your product description, does not impair the functionality of the mobile device or put customer data at risk once installed, and complies with the terms of the Distribution Agreement and our Content Guidelines. For clarity, our intent is not to be prescriptive in terms of what constitutes good app design. Amazon is a big believer in innovation in general, and we hope to feature many creative and innovative apps in the Appstore.

Amazon wrote a short list of content guidelines for developers writing apps for their Appstore, a total of six paragraphs prohibiting the following type of content: Offensive Content, Pornography, Illegal Activity, Intellectual Property Infringement, Privacy/Publicity Infringement, and Copyright Policy. The guidelines seem pretty simple and straightforward, but they give Amazon some discretion because they “reserve the right to determine the appropriateness of all apps and to accept or reject any app at our discretion”, according to the Offensive Content guideline.

But the greatest difference compared to Google and Apple’s stores is the fact that Amazon uses a variable purchase price: "For each sale of an app, we will pay you a royalty equal to the greater of (i) 70 percent of the purchase price or (ii) 20 percent of the list price." TechCrunch found out a bit more detail on how this works, but it is not all clear:

Amazon retains full control over how it wants to price your application. The setup is a bit confusing: upon submitting your application, you can set a ‘List Price’, which is the price you’d normally sell it at. Amazon will use a variety of market factors to determine what price it wants to use, and you get a 70% cut of the proceeds of each sale (which is the industry standard). In the event that Amazon steeply discounts your application, or offers it for free, you’re guaranteed to get 20% of the List Price.

It seems that Amazon will employ a mechanism similar to that used to set book prices, where sellers set an initial list price which later fluctuates over time, discounts are offered to attract buyers, all in an attempt to maximize profits. For developers, Amazon’s most attractive selling point, beside reaching tens of millions of customers, is its methods for tracking what customers are interested in, offering them products that are likely to be bought.

Amazon will accept apps built for Android 1.6 and later, and apps which are already sold through other channels such as AndSpot, AppBrain, GetJar, MobiHand, SlideME, and, of course, Google Android Marketplace. Developers will pay a fee of $99/year, but the first year will be free. The store will open for US in the beginning, and later will be rolled out for the rest of the world. The date when the Appstore will be launched is not known yet, the Amazon application store being expected sometime this summer.

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