Don't let it get away!
Keep track of the stocks that matter to you.
Help yourself with the Fool's FREE and easy new watchlist service today.
The tech blogs are buzzing with reports of Amazon.com's (Nasdaq: AMZN ) plans to build an Android App store. While Amazon has not confirmed or provided details about its plans, Amazon should build an Android App store, and Google (Nasdaq: GOOG ) should welcome its arrival.
What's in it for Amazon?
No doubt Amazon would take a generous revenue cut on the paid apps sold in its Android store. But just as important, having an app store helps defend Amazon's position as the online go-to for media -- books, music, movies, video games, and more. Currently, 52% of Amazon's revenues are generated by such media. Like book publishers, movie studios, and video-game makers, Amazon must prepare for a future when physical media -- DVDs, boxed software, and printed books -- become a rarity. The company's Kindle e-reader and Kindle apps help the company's position with books, but aren't enough.
What's in it for Google?
Google's Android has been a success in the wireless operating system market. How many products can you think of whose U.S. market share reached nearly 20% in barely two years? But, I would argue that Android's growth has come primarily from wide distribution -- Verizon, T-Mobile, Sprint (NYSE: S ) , and AT&T (NYSE: T ) -- and product proliferation -- HTC, Motorola (NYSE: MOT ) , and Samsung phones, while Apple's (Nasdaq: AAPL ) growth comes from consumers clamoring for the products. Google needs more consumers to actively prefer and form lines for Android, especially in the U.S. when Verizon (NYSE: VZ ) , still the No. 1 U.S. wireless carrier, offers the iPhone alongside Android products.
Apple's App Store is one of the biggest selling points for the company's iPhone and iPad products. Sure, the number of apps available for Android is growing rapidly, but a simple comparison of the quantity of Android apps to iPhone apps fails to capture the effortlessness of finding and buying the perfect app on Apple's store. An Amazon app store could help close that experience and accessibility gap, because the company's DNA is online stores. Google would lose some apps revenue that it might otherwise capture, but a successful Amazon Android store helps Google achieve its end goal of being the dominant mobile operating system and search provider.
An Apple eater?
I don't think a successful Amazon Android store would eat Apple's lunch, but Apple should take notice. An Amazon Android store has the potential to close a big competitive gap that exists now between Apple and Google.