How Amazon App Store Stacks Up Against the Competition

Amazon App Store is relatively unknown to developers, compared to both Google Play and Apple's App Store. But, the platform has the potential to be highly lucrative for developers, which could make it more popular in the future, potentially generating considerable revenue for Amazon.

Jun 18, 2014 at 10:30AM

Amazon (NASDAQ:AMZN) has announced that the number of apps in its app store nearly tripled last year to 240,000. Amazon's app store is still relatively unknown, compared to top app stores by companies such as Apple (NASDAQ:AAPL), Google (NASDAQ:GOOG) (NASDAQ:GOOGL)Microsoft (NASDAQ:MSFT), and BlackBerry.

Perhaps it's not a coincidence that Amazon has released these figures just before the launch of its new smartphone on June 18. With the new phone, Amazon's all-encompassing ecosystem will be more complete, and the smartphone might play a crucial role in popularizing its app store.

The importance of app revenue
App revenue can be a surprisingly lucrative revenue source for large app stores. Apple made a whopping $10 billion from app downloads in fiscal 2013, nearly 6% of its overall revenue. Google Play, on the other hand, made half as much, or 9% of its total revenue, despite accounting for almost 75% of total app downloads.

But, the most important metric here is how much developers on each of these platforms earn, on average. The higher the income potential of a specific platform, the more developers will gravitate toward it and, consequently, increase revenue for the app store.

Vision Mobile reported that iOS is the most lucrative mobile development platform, with an average revenue per app per month that's five times the Google Play average.

Mobile OS

Median Revenue Per App Per Month

iOS

$500-$1000

Android

$101-$200

Windows Phone

$1-$50

Windows 8

$1-$50

BlackBerry 10

$51-$100

HTML 5 Mobile

$201-$350

Source: VisionMobile

Apple has 1.25 million apps in its app store, and about 235,000 developers. Google, on the other hand, has 800,000 apps and 150,000 developers. Meanwhile, Microsoft revealed that it has 160,000 apps and 45,000 developers.

Amazon App Store

Source: Author's calculations

The average Google Play app enjoys 50% more downloads than the average app on Apple's App Store, but Apple's App Store gets the lion's share of revenue per download.

Amazon App Store

Source: Author's calculations

Real impact on a developer's wallet
You can get a good sense of the amount of revenue an average developer makes on any of the three platforms by multiplying the average revenue per download by the number of downloads per app on each platform. Here's how it works out:

Amazon App Store

Source: Author's calculations

What About Amazon App Store?
According to Developer Economics, very few developers publish their work on only one app store; most prefer using a cross-platform approach. Very often, developers publish their works on less well-known platforms such as Amazon App Store after their apps have already gained traction on larger stores such as Apple App Store and Google Play. This can give a skewed impression of the real potential of smaller app stores.

App Store Popularity

Platform

Percentage of Developers Using It

Google Play

65%

Apple App Store

56%

Windows Phone Store

26%

BlackBerry World

20%

Amazon App Store

16%

Source: Developer Economics

Considering apps that are only published on a single platform, Amazon App Store gives the best returns for developers.

App Store Popularity

App Store

Revenue Per App Per Month

Google Play

$3,300

Apple App Store

$6,500

Windows Phone Store

$300

BlackBerry World

$500

Amazon App Store

$9,800

Source: Developer Economics

How much does Amazon App Store make?
Distimo, a private company that provides developer-specific information for mobile developers, revealed last year that Google Play was roughly 10 times larger than Amazon App Store. The company, however, pointed out that this disparity was caused by the unusually large number of free apps on Google Play, compared to those on Amazon's App Store. Considering only the number of paid apps, Google Play is only twice as large as Amazon's App Store.

However, this does not suggest that developers of free apps do not make money. A study done last year showed that 96% of top-grossing apps on Google Play were free apps, compared to 77% of iPhone apps and 69% of iPad apps.

But, keeping the focus on paid apps, Google Play made about $5 billion in fiscal 2013. Considering the ratio of paid apps on Google Play vs. Amazon's App Store (2:1), it's fair to say that Amazon's App Store generated revenue in the neighborhood of $2.5 billion last year.

The number of apps on Amazon's App Store grew almost 300% last year. If this figure grows by just 100% every year through 2018, the store will have about 3.84 million apps by 2018, and could grow revenue by 6-8 times the current value.

Conclusion
Amazon's App Store is still relatively unknown to mobile developers. The platform is, however, surprisingly lucrative and should have no problem continuing to grow at the same blistering pace it did last year.

Are you ready for this $14.4 trillion revolution?
Have you ever dreamed of traveling back in time and telling your younger self to invest in Apple? Or to load up on Amazon.com at its IPO, and then just keep holding? We haven't mastered time travel, but there is a way to get out ahead of the next big thing. The secret is to find a small-cap "pure-play" and then watch as the industry -- and your company -- enjoy those same explosive returns. Our team of equity analysts has identified one stock that's ready for stunning profits with the growth of a $14.4 TRILLION industry. You can't travel back in time, but you can set up your future. Click here for the whole story in our eye-opening report.

Joseph Gacinga has no position in any stocks mentioned. The Motley Fool recommends Amazon.com, Apple, and Google (C shares). The Motley Fool owns shares of Amazon.com, Apple, Google (C shares), and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich" rated The Motley Fool as the #1 place online to get smarter about investing.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of fool.com.

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to www.fool.com/beginners, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. It's also featured on several dozen radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at www.fool.com/podcasts.

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.


Compare Brokers