Amazon’s Android Appstore (Tries) To Take Care of Business

So – the fabled Amazon Android Appstore (not App Store! That’s an App-le trademark!) is here. And almost as expected – these guys get the big things right, but the small things…

First thing you’ll notice -The Amazonian design. Besides the obvious branding elements, It is a much more effective design than Google’s. It is meant to generate sales. As soon as you open the store, you’re faced with credible alternatives – stuff you may well want to download, cause everyone else does. The screen space is used efficiently, and navigation is simple and easy. Very little innovation over, say iTunes, but also no clear disadvantages. The desktop web store is similar in approach, and not very far from the Amazon website that is so effective with retail shoppers in general.

The main attraction is a featured, “bonus” download, updated every day (i.e. a product that is usually not free being given away for free). Amazon takes care of business. To make an app store a business, you need paying customers. This requires people to have a payment method. That’s a hassle. That requires an incentive – give them something for free. But force them to connect a payment method to get the free stuff. Makes perfect sense. And gets me Angry Birds Rio for free. It also keeps me coming back every day for something else. Yes, it costs Amazon something. But probably not a lot. You see app developers have a great incentive to be providing these downloads for virtually (or literally) free – that day you were featured and provided as a free app, is going to put you very high in the Top Downloads chart – which will get you paid customers the following weeks (note the Top Downloads in the screenshot – yesterday’s free download, and today’s…). So even if Amazon pays virtually (or literally) nothing – it’s still a great deal. Everyone wins.

Caveat emptor – this also needs to work. The Appstore requires you to set up one-click mobile purchasing to get the download (as it should). However – no matter how many different ways I tried to do it, and despite the fact that all my info is shown, and my account shows mobile one-click purchasing activated (even when I connect on my desktop through a browser) – it still asks me again and again to “please add a payment mehod in your 1-click settings”. Now I am a loyal Amazon customer – Prime, Amazon Store Card and all that. My guess is that Amazon is not accepting its own store card on its own Appstore. Otherwise I don’t see how such a blatant bug could have slipped their people.

So – as expected, these people mean business, and know how to do it. They’ll have to cross a few t’s and dot a few i’s before they do, however.

Post MWC: Android’s Tour-de-force. Is that the shape of things to come?

Over the last week I’ve had several discussions with colleagues about MWC 2011. The general gist of things was “wow, how far Android has gone”. And indeed, Android’s presence at the conference was impressive, to say the least. The usual Android suspects were there, of course – HTC, Motorola, Samsung and others. But what was even more impressive was the vast number of unknown Android manufacturers, mainly Chinese, who’ve flocked to the free platform en-masse. Known names like ZTE and Huawei were to be expected, but upstarts like Malata (who seems to make impressive Android tablets, incidentally) were there by the dozen. And of course – given Nokia’s and Apple’s absence, and RIM’s limited presence, it sometimes seemed like Android is the only game in town.

Malata Android Tablet

The Nokia / Microsoft news just fanned the fire. Essentially while it is a feather in Windows Phone’s cap (not necessarily a beautiful peacock feather, incidentally), it means that Nokia will be out of the smartphone game for a long time. And to judge by the employees’ reaction – could be long indeed.

The general conclusion I heard drawn, then is simple – Android is taking over the market, Android will define the shape of things to come, Android is where to take your mobile start-up / corporate mobile app first cause that’s where all the users will be. Right?

Sorry, it’s not that simple. Contrary to what some people think, Android to phones is not going to be Windows to PCs. At least not in the next 2-3 years. There are many reasons, but I think the most important one lies in the personal relationship between consumers and their phones. Unlike PCs (at the time), phones are a means for personal expression both explicitly (as in what you put on them / use them for) and implicitly (as in making sure your peers know what you have – just like cars). Most smartphone users associate their phone selection and habits with their identity. And with identity, a “one size fit all” strategy doesn’t work, fortunately. So as long as there are technologically credible alternatives with a well differentiated product (e.g iPhone, BlackBerry), they will draw significant audiences.

Furthermore, the wider Android spreads as a mid-market solution, the less appealing will it be to some of these people who seek to distance themselves from “the middle”. Think the Mac cult of the ’90s and early ’00s but at a wholly different level. After all – these devices are used in the open. People see what you use, so better pick the “right” one.

So clearly – the fragmentation in the smartphone space is going to continue. Each platform’s market segment will be different demographically and psycho-graphically,  and these compositions will continue evolving. I expect we’ll keep seeing Android pandering mostly to the mid-market (with of course a meaningful number of power-users and high-end customers too). iPhone will generally remain a high-end phenomenon. BlackBerry may well lose its hold on the enterprise, but acquire new audiences amongst the young and price-conscious (free messaging). And when Nokia eventually rolls out Windows Phone handsets, it is quite possible that their considerable distribution clout in European and Emerging markets will make this a meaningful platform for those audiences.

I believe a very similar phenomenon will be seen in tablets. While Android tablets are improving, the good ones are still not meaningfully cheaper than the iPad. Apple only needs some minor improvements with the anticipated iPad 2 in order to stay in the lead. Only when significantly cheaper tablets (probably running Android 3.0) will come to the market can the balance be upset. And what will we have then? A similar market structure with iPad as the premium product and Android tablets as cheaper, “good enough” devices for mid-market consumers.

Where does this leave the Android makers? With the proliferation of Chinese manufacturers with great pricing power, we will see the PC-wars re-enacted. Margins will drop to low single digits for most manufacturers, probably leading to consolidation and elimination of key brands.

So essentially – nothing earth-shattering really came out of MWC. We will see even more Androids, Symbian and MeeGo are dead (duh!) but little change to the fabric of the market as we’ve known it in 2010.

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